INCOME TAX OFFICER, MUMBAI vs. SCRIPT STORIES MEDIA PRIVATE LIMITED, MUMBAI

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ITA 2183/MUM/2024Status: DisposedITAT Mumbai24 July 2024AY 2018-19Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)1 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CIT(A) deleted the disallowance based on the fact that the assessee had not derived any exempt income in the relevant year. The Tribunal relied on the case of PCIT vs. Ballapur Industries Ltd., which held that Section 14A disallowance does not apply in the absence of any exempt income.

What were the facts?

The Revenue appealed against the CIT(A)-NFAC's order, which had deleted the disallowance made by the Assessing Officer under Section 14A read with Rule 8D. The Assessing Officer had disallowed Rs. 1,83,88,000/-.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is applicable when no exempt income is earned by the assessee in the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “G” BENCH : MUMBAI

Before: SHRI SATBEER SINGH GODARA & SHRI OMKARESHWAR CHIDARA

Hearing: 23.07.2024Pronounced: 24.07.2024

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA.No.2183/Mum./2024 Assessment Year 2018-2019 Script Stories Media The Income Tax Officer, Private Limited, Unit-1, Ward-11(2)(1), Room Enterprise Centre, Nehru No.425, Aayakar Bhavan, vs. Road, Vile Parle East, M.K. Road, Churchgate, Mumbai – 400 099 Mumbai – 400 020 Maharashtra. Maharashtra. PAN AATCS6380H (Appellant) (Respondent) For Revenue : Shri Virabhadra Mahajan, Sr. DR For Assessee : -None- Date of Hearing : 23.07.2024 Date of Pronouncement : 24.07.2024 ORDER PER SATBEER SINGH GODARA, J.M.

This assessee’s appeal, for assessment year 2018- 2019 arises against the order of the learned CIT(A)-National Faceless Appeal Centre, Delhi’s DIN & order no.ITBA/ NFAC/S/250/2023-24/1061441768(1), dated 24.02.2024,

2 ITA.No.2183/MUM./2024 in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”).

Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte.

2.

Learned DR vehemently argued during the course of hearing that the CIT(A)-NFAC’s has erred in law and on facts in reversing the assessment findings making sec.14A r.w. Rule 8D disallowance of Rs.1,83,88,000/-. A perusal of the CIT(A)-NFAC’s detailed discussion reveals in this factual backdrop that he has deleted the impugned disallowance going by the clinching fact that the assessee had not derived any exempt income in the relevant previous year.

3.

Faced with this situation, we note case law PCIT vs. Ballapur Industries Ltd., [2017] 86 taxmann.com 5 (Bom.) has settled the issue in assessee’s favour that such disallowance provision itself does not apply in absence of any exempt income. This is indeed coupled with the fact that the legislature has amended sec.14A of the Act by way of inserting Explanation by the Finance Act, 2022 w.e.f.

3 ITA.No.2183/MUM./2024 01.04.2022 than making it applicable retrospectively. We note that we are in assessment year 2018-2019 only and we accordingly see no merit in the Revenue’s instant sole substantive grievance. The same stands declined in very terms. Ordered accordingly.

4.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open Court on 24.07.2024

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