M/S. BHUMI VINTRADE PVT. LTD.,KOLKATA vs. PR. CIT - 8, KOLKATA, KOLKATA

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ITA 1124/KOL/2017Status: DisposedITAT Kolkata14 February 2018AY 2012-133 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 quashed the order passed by the Pr. CIT under Section 263. This was based on the precedent that no disallowance under Section 14A can be made in a year where no exempt income is earned.

What were the facts?

The Pr. Commissioner of Income Tax directed the Assessing Officer to compute disallowance under Section 14A read with Rule 8D. The assessee had not earned any dividend income during the assessment year.

What were the issues?

Whether disallowance under Section 14A can be made when no exempt income is earned by the assessee. The validity of the Pr. CIT's order under Section 263 directing such disallowance.

Which sections of the Income-tax Act were involved?

Section 14A,Section 263

AI-generated summary — verify with the full judgment below

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

Before: Sri J. Sudhakar Reddy& Sri S.S. Viswanethra Ravi]

M/s. Bhumi Vintrade Pvt. Ltd…………….…..…………………………………………....Appellant Flat C-6 Krishnakunj Township Rajarhat, Narayanpur Gopalpur Kolkata – 700 136 [PAN : AADCB 6243 L] Pr. Commissioner of Income Tax-8, Kolkata……………...…….…………..…. Respondent 54/1, Rafi Ahmed Kidwai Road 1st Floor Kolkata – 700 016 Appearances by: Shri Miraj D. Shah, AR, appeared on behalf of the assessee. Shri Goulen Hangshing, CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : February 1st, 2018 Date of pronouncing the order : February 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. Pr. Commissioner of Income Tax, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 263 of the Income Tax Act, 1961 (the ‘Act’), dt. 16/03/2017.

2.

The ld. CIT(A), in this order had directed the Assessing Officer to compute the disallowance u/s 14A rw Ruled 8D of the Act. The assessee has not earned any dividend income during the year. The Hon’ble Delhi High Court in the case of Cheminvest Ltd. v. CIT, held that “No disallowance u/s 14A can be made in a year in which no exempt income has been earned or received by the assessee.”

Assessment Year: 2012-13 M/s. Bhumi Vintrade Pvt. Ltd 3. Respectfully following the same, we quash the order passed by the ld. Pr. CIT u/s 263 of the Act, as the directions issued by him are against the propostions of law laid down by the Hon’ble Delhi High Court. 4. In the result, appeal of the assessee is allowed.

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