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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal by the Revenue is arising out of the order of CIT(A)-8, Mumbai, in appeal No. CIT(A)-8/IT-138/14-15 dated 27-01-2016. The Assessment was framed by DCIT Circle-3(3), Mumbai for the A.Y. 2012-13 vide order dated 01-10-2014 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance made by AO on account of the claim of expenditure relatable with exempted income by invoking the provisions of Section 14A of the Act reads with Rule 8D of the Income Tax Rules 1962 (hereinafter the ‘Rules). For this Revenue has raised following three grounds: -
“1. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) is right in deleting the addition of Rs. 1,33,61,478/- made by the assessing
White Pearl Hotels & Investment Pvt. Ltd.AY:12-13 officer under section 14A read with rule 8D(2) of IT Act 1961?
Whether on the facts and in the circumstances of the case and in law, Cd. CIT(A) is right in not considering the fact that the amount of disallowance u/s 14A has to be computed as per rule 8D when the computation of the assessee was not found to be correct and as held in the order of the Hon'ble High Court in the case of M/s Godrej & Boyce Mfg. Co. Ltd."
3. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) Is right in holding that no exempt income has been earned by the assessee from the investment during the year and therefore no disallowance u/s. 14A r.w.r. 8D could be made, which is in contravention to the CBDT's circular No.5 of 2014 dated 11-02-2014 ."
At the outset, the learned Counsel for the assessee drew our attention to the assessment order Para 5.4 wherein the AO has recorded the fact that the assessee does not have any exempted income. But according to AO the assessee had made long term investment in shares etc. In view of the above learned Counsel for the assessee stated that Tribunal decision in assessee’s own case for AYs. 2009-10 and 2020-11 in and 4314/Mum/2014 vide order dated 23-11-2015 and also in ITA No. 7519/Mum/2014 for AY 2011-12 dated 24-08-16 has deleted the disallowance by following the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd. (2015) 378 ITR 33 (Del).
We find that Hon'ble Delhi High Court has clearly held that there should be actual receipt of income which is not included in the total income of the assessee during the relevant previous year relevant to AY under consideration for the purpose of disallowing any expenditure in relation to that income by invoking the provisions of Section 14A of the Act read with Rule 8D of the Rules. Respectfully, following the Tribunal’s decision assessee’s own case and White Pearl Hotels & Investment Pvt. Ltd.AY:12-13 Hon'ble Delhi High Court in the case of Cheminvest Ltd (supra), we confirm the order of CIT(A) deleting the disallowance.
In the result, the appeal of Revenue is dismissed. Order pronounced in the open court on 12-04-2017.