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Income Tax Appellate Tribunal, “L”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM
आदेश / O R D E R PER R.C.SHARMA (A.M): These are the appeals filed by Revenue against the order of CIT(A)-10, Mumbai dated 30/09/2014 for the A.Y.2010-11 and 2011-12, in the matter of order passed u/s.143(3) r.w.s.144C of the IT Act. 2. At the outset, learned AR placed on record the order of the Tribunal for the A.Y. 2003-04 to 2009-10 in assessee’s own case wherein all the issues raised by the Revenue are covered in favour of the assessee. 3. We had carefully gone through the order of the Tribunal in assessee’s own case wherein issue with regard to disallowance of data processing cost u/s.40(a)(i) has been dealt by AO at page 04-14. The disallowance so made has been deleted by CIT(A) after having his observation at page 2-10. We found that the CIT(A) while deciding the issue in favour of the 7482/Mum/2014 M/s. Antwerp Diamond Bank NV assessee has relied on the orders passed by the CIT(A) in assessee’s own case for earlier years viz., Assessment years 2003-04, 2004-05, 2005-06 and 2008-09. The CIT(A) has also relied upon the decision of the Mumbai Bench of the ITAT in assessee’s own case for Assessment Year 2004-05. Further similar view has been upheld by the Mumbai Bench of the ITAT in assessee’s own case for Assessment Years 2006-07, 2007-08 and 2009-10, thus deciding the issue in assessee’s favour.
In view of the above findings of CIT(A) and relying on the decision of the Tribunal in assessee’s own case, we do not find any reason to interfere in the order of CIT(A) for deleting disallowance of data processing cost.
Next issue pertains to taxability of interest paid to Head Office. We found that the CIT(A) while deciding the issue in favour of the assessee for the year under consideration has relied on the Order passed by the Tribunal in the assessee’s own case for the Assessment Year 2003-04. Further, similar view has been upheld by the Mumbai Bench of the ITAT in assessee’s own case for Assessment Years 2004-05, 2005-06, 2006- 07, 2007-08 and 2009-10, thus deciding the issue in assessee’s favour. We do not find any infirmity in the order of CIT(A).
Next issue relates to disallowance u/s.14A for earning exempt income. We have considered rival contentions and found from record that the issue has been decided in assessee’s favour by the Mumbai ITAT, in assessee’s own case for Assessment Years 2004-05, 2005-06, 2007-08 and 2009-10. The Indian Branch has not received / earned any interest
7482/Mum/2014 M/s. Antwerp Diamond Bank NV income from its Head Office or other foreign branches and hence there can be no question of the interest expense in question being incurred to earn any exempt income and hence the same cannot be disallowed u/s.14A. The proposition that no disallowance can be made u/s.14A of the Income-tax Act,1961 in case there is no exempt income is now well settled and one can refer to the following cases wherein the said proposition has been upheld: CIT v/s. Delite Enterprises (ITA No.110 of 2009) (Bom) Cheminvest Ltd., v/s. CIT (2015) 378 ITR 33 (Delhi) ACIT vs. Lafarge India Holding (P) Ltd., (2008)-(19 SOT 121) (Mum Trib) CIT v/s.Shivam Motors Pvt. Ltd., (2015) 230 Taxman 63 (Allahabad) CIT v/s.Corrtech Energy Pvt. Ltd., (233 Taxman 130) (Gujarat) ACIT v/s. Mr.M. Baskaran (ITA No.1717/Mds/2013) CIT v/s.Lakhani Marketing Inc. (2015) 226 Taxman 45 (P & H) Huntsman International (India) P. Ltd., v/s. DCIT (2016) 66 taxmann.com 325 (Mum.Trib) 6. Contention of assessee before us was that no expenditure has been incurred or claimed by the Indian Branch in respect of interest earned by the Head Office (which is not taxable). Accordingly, it was pleaded that provisions of Section 14A are not applicable to the said case.
7482/Mum/2014 M/s. Antwerp Diamond Bank NV 7. We found substantial merit in the contention of learned AR, however, in the interest of justice, we restore the matter back to the file of the AO to find out if assessee was in receipt of any exempt income vis-à-vis interest paid to head office. If the AO found that assessee was not in receipt of any exempt income, no disallowance is to be made. Accordingly AO is directed to decide afresh after verification.
Learned DR fairly conceded that similar grounds have been taken by Revenue in the assessment year 2011-012.
We have gone through the orders of the authorities below following the reasoning given in the Assessment Year 2010-11, we do not find any infirmity in the order of CIT(A) for the A.Y 2011-012.
In the result, appeals filed by the Revenue are dismissed in terms indicated hereinabove.