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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI G.D. AGRAWAL & SHRI CHANDRA MOHAN GARG
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal filed by the assessee is directed against the order of the CIT(A)-XVII, Delhi, dated 18/11/2013 for AY 2009-10.
The assessee has raised the following ground of appeal:
“That the ld. CIT(A) is unjustified in upholding the disallowance of Rs. 39,76,994/- on account of expenses allocated towards earning the exempt income u/s 14A whereas the expenditure in those investments are yielding taxable income and section 14A is not attracted to such investments.”
At the time of hearing, at the very outset, it was conveyed to us that the issue raised in this appeal stands covered in favour of the assessee by the Tribunal order dated 30.01.2014 passed in assessee’s own case for Assessment year 2008-09 in wherein the Tribunal set aside the orders of the lower authorities and allowed the ground raised by the assessee on this ground, copy of which is enclosed. The ld. counsel for the department fairly admitted that the issue is covered in favour of the assessee. But he relied on the findings of the authorities below given in this regard.
We have heard the rival submissions and have also gone through the Tribunal order in assessee’s own case [supra] and have also carefully treaded through the appellate order.
5. We find that against the order passed by the AO and the ld. CIT(A), the assessee was in appeal and the Tribunal has allowed the appeal of the assessee by holding as under:
“ We have heard both the sides on the issue. After hearing both the sides and also considering the facts of the case, we find that investment made in four joint venture companies, namely, Chiron Panece a Vaccines (P) Ltd., Cambridge Biostability Ltd., Panheber Biotec (P) Lt d. (Panera Biotec (P) Ltd.) and Shivalik Solid Waste Management Ltd. Were with the intention to expend the business of the assessee out of the commercial expediency and not with the intention of exempted income. The earning of exempted income by way of dividend income is only incidental of expanding its business. From making this investment, the assessee is able to enhance its sale substantially. In view of this factual position, we find that the CIT (A) was not justified in sustaining the addition of Rs. 30,15,375/- which was over and above the computation made by the assessee for disallowance at Rs1.45 crores as per Rule 8D. Accordingly, we set aside the orders of the lower authorities on this ground.”
4. Admittedly, the facts of the year under consideration are identical to the facts of the A.Y 2008-09 as discussed in Tribunal order [supra]. On the other hand, for the year under consideration, the suo motto disallowance trade by the assessee is much more i.e. Rs. 5.21 crores against Rs. 1.45 crores of last year. Therefore, in our opinion, the decision of the ITAT in the preceding A.Y 2008-09 is squarely applicable to A.Y 2009-10 and thus the sole ground of the assessee is allowed.
In the result, the appeal of the assessee stands allowed.
The order is pronounced in the open court on 10.06.2016.