M/S CHANDIGARH DISTILLERS & BOTTLERS PVT. LTD.,CHANDIGARH vs. DCIT, LUDHIANA

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ITA 778/CHANDI/2017Status: DisposedITAT Chandigarh20 June 2018AY 2012-133 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A is attracted if the assessee has not earned any income that does not form part of the total income. Therefore, the disallowance made by the lower authorities was ordered to be deleted.

What were the facts?

The assessee appealed against the disallowance made under Section 14A of the Income Tax Act for assessment years 2012-13 and 2013-14. The core of the appeal was that the assessee had not earned any tax-exempt income during these periods.

What were the issues?

Whether disallowance under Section 14A is warranted when the assessee has not earned any tax-exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, DIVISION BENCH ‘A’, CHANDIGARH

Before: SHRI SANJAY GARG & MS.ANNAPURNA GUPTA

For Appellant: Shri Sudhir Sehgal, Adv
Hearing: 19.03.2018Pronounced: 20.06.2018

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘A’, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA Nos.778 & 779/Chd/2017 (Assessment Year : 2012-13 & 2013-14)

M/s Chandigarh Distillers Vs. The D.C.I.T., Bottlers Pvt. Ltd. Central Circle II, SCO 140-141, Ludhiana. Sector 34-A, Chandigarh, PAN No. AABCC3752B (Appellant) (Respondent)

Appellant by : Shri Sudhir Sehgal, Adv. Respondent by : Smt.Chanderkanta, Addl.CIT Date of hearing :19.03.2018 Date of Pronouncement :20.06.2018

ORDER Per Sanjay Garg, Judicial Member :

The captioned appeals have been preferred by the

same sassessee against the separate orders of the

Commissioner of Income Tax (Appeals)-5, Ludhiana

[hereinafter referred to as ‘CIT(Appeals)] dated 6.2.2017,

passed u/s 250(6 of the Income Tax Act, 1961 (in short ‘the

Act’) in Appeal Nos.49/IT/CIT(A)-5/Ldh/2015-16 &

399/IT/CIT(A)-5/Ldh/2015-16 relating to assessment year

2012-13 and 2013-14 respectively.

2.

Since identical issues have been raised in both the

appeals, the same were heard together and are being

disposed off by this consolidated order.

2 ITA No.778 779/Chd/2017 AYs: 2012-13 & 2013-14

3.

The only issue involved in this appeal is relating to the

disallowance made u/s 14A of the Income-tax Act, 1961 (in

short 'the Act') read with Rule 8D(2)(ii) of the I.T. Act.

4.

At the outset, Ld. Counsel for the assessee has invited

our attention to the impugned orders of the CIT(A) and

pointed out that for the impugned assessment years there

was no tax exempt income earned by the assessee. The Ld.

counsel has further submitted that the issue is now

squarely covered by the numerous decisions of the various

High Courts including that of the Jurisdictional High Court

of Punjab and Haryana in the case of CIT, Faridabad Vs.

Lakhani Marketing Inc.’, 226 Taxman 45 (P&H) and in the

case of ‘CIT Vs. Winsome Textiles’ (2009) 319 ITR 204 (P&H),

Hon'ble Delhi High Court in the case of ‘Cheminvest Ltd Vs.

ITO’ (2015) 378 ITR 33 (Delhi) and of the Hon'ble Gujarat

High Court in the case of ‘Corrtech Energy P. Ltd. (2014) 45

Taxman.com 116’ and further of the Hon'ble Allahabad High

Court in the case of ‘CIT Vs. M/s Shivam Motors (P) Ltd’

(2014) 272 CTR (All) 277 and various other case laws. In all

the above referred to case laws, the Hon'ble High Courts have

been unanimous to hold that no disallowance is attracted u/s

14A of the Act in case the assessee has not earned any income

not forming part of the total income.

5.

In view of the above legal proposition, no disallowance

u/s 14A is warranted in this case and hence, the disallowance

made by the lower authorities is hereby ordered to be deleted.

3 ITA No.778 779/Chd/2017 AYs: 2012-13 & 2013-14

6.

In the result both the appeals of the assessee are hereby

allowed.

Order pronounced in the open court on 20.06.2018

Sd/- Sd/- (ANNAPURNA GUPTA (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 20th June, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR Assistant Registrar, ITAT, Chandigarh

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