PREETHI JOHN MUTHOOT,THIRUVANATHAPURAM vs. DCIT/ CENTRAL CIRCLE, TRIVANDRUM

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ITA 904/COCH/2023Status: DisposedITAT Cochin23 October 2024AY 2020-21Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Amarjit Singh (Judicial Member)2 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 disallowance under Section 14A read with Rule 8D is not applicable when the assessee has not derived any exempt income in the relevant previous year. This issue has been settled by various judicial precedents.

What were the facts?

The assessee appealed against a disallowance made by the lower authorities under Section 14A read with Rule 8D. The disallowance was made without a categorical finding on whether the assessee derived any exempt income.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is permissible when no exempt income has been earned by the assessee.

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(4)Show list

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri Sreenivasan, CA
For Respondent: Dr. S. Pandian, CIT-DR
Hearing: 19.08.2024Pronounced: 23.10.2024

O R D E R Per Bench This assessee’s appeal for A.Y. 2020-21 arises against CIT(A)-3, Kochi’s DIN & Order No. ITBA/APLS/S/250/2023-24/1057573704(1) dated 31.10.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

Heard both parties. Case file perused.

2.

It emerges at the outset that both the learned lower authorities have made section 14A r.w. rule 8D disallowance of Rs.69,35,551/-; without even giving a categorical finding about the assessee having not derived any exempt income as per her books of account pertaining to the relevant previous year. This being the clinching admitted fact, case law in CIT v. Corrtech Energy Pvt. Ltd. [2015] 372 ITR 97 (Guj.); Cheminvest Ltd., vs. CIT [2015] 378 ITR 33 (Del.); PCIT vs. Avantha Preethi John Muthoot Realty Ltd., [2024] 164 taxmann.com 376 (Cal.) and CIT vs. Chettinad Logistics (P) Ltd., [2018] 95 taxmann.com 250 (SC), have already settled this issue in assessee’s favour and against the department that the impugned sec.14A r.w. Rule 8D disallowance does not apply when no exempt income is derived in the relevant previous year. The assessee succeeds in her sole substantive grievance in very terms.

3.

This assessee’s appeal is allowed.

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