GANGOTRI SALES PVT. LTD.,KOLKATA vs. ITO, WARD - 6(4), KOLKATA, KOLKATA

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ITA 2348/KOL/2017Status: DisposedITAT Kolkata14 March 2018AY 2011-122 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A can be made in a year where the assessee has not earned any exempt income. The appeal was allowed following the Delhi High Court's decision in Cheminvest Pvt. Ltd.

What were the facts?

The assessee's appeal was against an order confirming a disallowance under Section 14A. The core of the dispute was whether such disallowance is permissible when the assessee has no dividend income.

What were the issues?

Whether disallowance under Section 14A is applicable when the assessee has no dividend income.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy]

order : March 14th, 2018 O R D E R Per J. Sudhakar Reddy :- This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 25/09/2017.

2.

The only issue that has to be adjudicated is whether the disallowance u/s 14A, can be made when the assessee has no dividend income.

3.

Heard rival contentions. We find that the Hon’ble Delhi High Court in the case of Cheminvest Pvt. Ltd. vs CIT (2009) 317 ITR 86, while dealing with an identical issue held as follows:- “No disallowance u/s 14A can be made in a year in which no exempt income has been earned or received by the assessee. S. 14A also does not apply to shares bought for strategic purposes”

4.

Respectfully following the same, we delete the addition made by the Assessing Officer and confirmed by the ld. CIT(A) u/s 14A of the Act and allow this appeal of the assessee.

5.

In the result, appeal of the assessee is allowed. Kolkata, the 14th day of March, 2018 Sd/- [J. Sudhakar Reddy] Accountant Member Dated :14.03.2018 {SC SPS}

1.

Assessment Year: 2011-12 Gangotri Sales Pvt. Ltd Copy of the order forwarded to: 1. Gangotri Sales Pvt. Ltd 5/1, Clive Row 2nd Floor Room No. 54 Kolkata – 700 001 2. Income Tax Officer Ward-6(4), Kolkata Aayakar Bhawan Kolkata – 700 069 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.

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