DCIT 10(1), MUMBAI vs. SUPREME REALTY P.LTD, MUMBAI

अपीलाथ� क� ओर से /By Appellant : Shri J. Saravanan, D.R. ��यथ� क� ओर से/By Respondent :Shri Anuj Kisnadwala, A.R. सुनवाई क� तार�ख/Date of Hearing : 28.06.2016 घोषणा क� तार�ख/Date of Pronouncement : 30.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-21, Mumbai, dated 12.03.2014 for A.Y. 2009-10 on following grounds:

A.Y. 09-10 [DCIT vs. Supreme Realty P. Ltd.] Page 2

“1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made by the AO of Rs.2,74,56,810/- u/s.14A r.w.s. 8 D of the IT Rules 1962 by relying on the Bombay High Court decision in the case of Delite Enterprises is erroneous as in the case, in absence of wxmpt profit the Hon'ble Bombay High Court did not answer the question on merit.

1.1 On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in considering the case of Delite Enterprises where facts of the case are different from the facts of this case as the year involved in those appeals was for years when Rule D was not on statute.

1.2 On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the Circular No.5 of 2014 issued by the CBDT wherein it is clarified that even where exempt income is not earned during the year however the investment is such where exempt income is likely to arise disallowance u/s.14A should be made."

2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to the assessee by following the decision of Hon’ble A.Y. 09-10 [DCIT vs. Supreme Realty P. Ltd.] Page 3 High Court in case of CIT vs. Delite Enterprises in ITA No.110 of 2009, wherein it has been held that no disallowance u/s.14A is permitted if there is no tax free income earned by asessee for the year under consideration. Facts of M/s. Delite Enterprises (supra) are similar to the assessee’s case because assessee has not earned any tax free income nor is exemption u/s.10(2A) of the Act claimed by assessee. Nothing contrary was brought to our knowledge on behalf of Revenue, so, facts being similar, we are not inclined to interfere with the order of CIT(A) who has decide the appeal in favour of assessee by following the ratio of M/s. Delite Enterprises (supra), same is upheld.

Pronounced in the open Court on this the 30th day of June, 2016.

Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 30/06/2016 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।