ACIT, CIRCLE- 11(1), NEW DELHI vs. HERO WIND ENERGY (P) LTD., NEW DELHI

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ITA 7721/DEL/2019Status: DisposedITAT Delhi07 June 2023AY 2016-172 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) correctly deleted the addition by following the Delhi High Court judgment in Joint Investment Pvt. Ltd. vs CIT. The disallowance under Section 14A cannot exceed the exempt income, and the assessee's suo motu disallowance was reasonable.

What were the facts?

The Assessing Officer made a disallowance under Section 14A read with Rule 8D, which was deleted by the CIT(A). The assessee had suo motu disallowed the entire amount of exempt income.

What were the issues?

Whether the disallowance under Section 14A read with Rule 8D can exceed the amount of exempt income earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: B: NEW DELHI

Before: SHRI CHANDRA MOHAN GARG & M.BALAGANESH

Hearing: 27.04.2023Pronounced: 07.06.2023

ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of CIT(A)-4 New Delhi dated 15.07.2019 for AY 2016-17.

2.

The ld. Senior DR supporting the action of the Assessing Officer submitted that the Assessing Officer was correct and justified in making disallowance and adding the same to the income of the assessee under section 14A of the I.T Act 1961 (for short the ‘ Act’) r.w.r 8D of the I.T Rules 1962 which was deleted by the ld. CIT(A) without any basis therefore impugned first appellate order may kindly be set aside by restoring that of the Assessing Officer.

3.

Replying to the above, the ld. counsel of assessee drew our attention towards relevant paras 6 to 6.4 of first appellate order and submitted that the ld. CIT(A) was quite correct and justified in deleting the addition by following the judgment of Hon’ble Jurisdictional High Court of Delhi in the case of Joint Investment Pvt. Ltd. vs CIT reported as 372 ITR 694 (Del.).

4.

On careful consideration of above submission, first of all, from relevant part of first appellate order we note that the ld. CIT(A) noted that the appellant has suo motto disallowed the entire amount of exempt income of Rs. 5,08,788/- and thus, the assessee has not claimed any exempt income in the return of income. Thereafter, the ld. CIT(A) by referring to the judgment of Hon’ble jurisdictional High Court of Delhi in the case of Joint Investment Pvt. Ltd. vs CIT(supra) held that the disallowance u/s. 14A r.w.r 8D of the Rules cannot exceed to the exempt income and hence suo motto disallowance made by the assessee is reasonable and justified and no further disallowance is required to be made. We are unable to see any valid reason to interfere with the findings recorded by the ld. CIT(A) while deleting the addition and hence we uphold the same. Accordingly grounds of revenue are dismissed.

5.

In the result, the appeal of revenue is dismissed.

Order pronounced in the open court on 07.06.2023.

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