PCIT v. Caraf Builders and Constructions Pvt. Ltd.

414 ITR 122High Court2019#1635 most cited

What is PCIT v. Caraf Builders and Constructions Pvt. Ltd. authority for?

Disallowance under Section 14A cannot exceed the actual exempt income earned, and only investments that have yielded or are capable of yielding exempt income are considered for Rule 8D computation. The Assessing Officer must record objective satisfaction before rejecting the assessee's disallowance and applying Rule 8D, a principle also applicable to Section 115JB.

69

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2019 to 2026.

Also referred to as

PCIT v. Caraf Builders · 414 ITR 122 · Section 14A disallowance · Rule 8D · objective satisfaction · exempt income limit · investments not yielding exempt income · Section 115JB · book profit · Minimum Alternate Tax

Sections most often in play

Section 1961Section 14ASection 1962Section 143(3)Section 8DSection 115JBSection 250Section 37(1)
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Issues it is cited on

section 14a(3)section 36(i)(iii)section 36(i)(va)section 36(l)(iii)section 36(l)(va)section 36(l)section 14a(1)r&d expenditurestatutory duessection 270a(9)mat creditsection 14a(2)

Judgments citing PCIT v. Caraf Builders and Constructions Pvt. Ltd.

M/S. Kei Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result, Ground No.3

ITA 528/DEL/2016[2012-13]Status: DisposedITAT Delhi03 Dec 2020AY 2012-13

Bench: Shri Bhavnesh Saini, J.M. & Shri Anil Chaturvedi, A.M.

For Appellant: Shri Satyan Sethi, AdvocateFor Respondent: Ms. Parul Singh, Sr. D.R

…hi. Learned Counsel for the Assessee in support of the above ground relied upon Judgments of the Hon’ble Delhi High Court in the case of ACB India Ltd., vs., ACIT [2015] 374 ITR 108 (Del.) and Pr. CIT vs., M/s. Caraf Builders & Constructions (P.) Ltd., [2019] 414 ITR 122 (Del.). 24.2. The Ld. D.R. also submitted that the issue is covered in favour of the assessee by the above decisions. 25. We have considered the rival submissions of both the parties. It is an admitted fact that in assessment year under appeal assessee has received dividend income of Rs.2,37,896/-. In the case of Joint Investments Pvt. Ltd., vs…

ACIT, New Delhi vs. M/S. K.E.I. Industries Ltd., New Delhi

In the result, Ground No.3

ITA 1433/DEL/2014[2009-10]Status: DisposedITAT Delhi03 Dec 2020AY 2009-10

Bench: Shri Bhavnesh Saini, J.M. & Shri Anil Chaturvedi, A.M.

For Appellant: Shri Satyan Sethi, AdvocateFor Respondent: Ms. Parul Singh, Sr. D.R

…hi. Learned Counsel for the Assessee in support of the above ground relied upon Judgments of the Hon’ble Delhi High Court in the case of ACB India Ltd., vs., ACIT [2015] 374 ITR 108 (Del.) and Pr. CIT vs., M/s. Caraf Builders & Constructions (P.) Ltd., [2019] 414 ITR 122 (Del.). 24.2. The Ld. D.R. also submitted that the issue is covered in favour of the assessee by the above decisions. 25. We have considered the rival submissions of both the parties. It is an admitted fact that in assessment year under appeal assessee has received dividend income of Rs.2,37,896/-. In the case of Joint Investments Pvt. Ltd., vs…

DCIT, New Delhi vs. M/S. Sindhu Trade Links Ltd., New Delhi

The appeals are partly allowed for statistical purpose

ITA 2652/DEL/2014[2008-09]Status: DisposedITAT Delhi11 Sept 2020AY 2008-09

Bench: Shri R. K. Panda & Ms Suchitra Kamblesindhu Trade Links Ltd. Vs Addl. Cit(A) 129, Transport Centre, New Range-8 Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Dcit Vs Sindhu Trade Links Ltd. Central Circle-21 129, Transport Centre, New New Delhi Rohtak Road (Appellant) Punjabi Bagh New Delhi Aaacs0447A (Respondent) Vs Sindhu Trade Links Ltd. Dcit 129, Transport Centre, New Circle-8(1) Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Appellant By Sh. Salil Kapoor, Adv Respondent By Sh. Saras Kumar, Sr. Dr Date Of Hearing 16.07.2020 Date Of Pronouncement 11.09.2020 Orders Dated 21/2/2014 For Assessment Year 2008-09 & 2009-10 Respectively Passed By Cit(A)’S-Xi, New Delhi.

Section 14ASection 2(22)Section 69

…total investments. The Ld. AR relied upon the following decisions: a. ACB India Ltd. vs. ACIT (2015) 374 ITR 108 (Del. HC) b. ACIT vs. Vireet Investment (P.) Ltd. (2017) 58 ITR (T) 313 (Del. Tri.)(SB) c. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 414 ITR 122 (Del.) d. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 112 taxamann.com 322 (SC) Furthermore, the Assessing Officer as well as the CIT(A) have failed to appreciate that the assessee had sufficient interest free fund to make the investment and therefore, no disallowance u/s 14A could have been made. The Ld. AR relied upon the following…

M/S. Sindhu Trade Links Ltd., New Delhi vs. DCIT, New Delhi

The appeals are partly allowed for statistical purpose

ITA 2429/DEL/2014[2009-10]Status: DisposedITAT Delhi11 Sept 2020AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamblesindhu Trade Links Ltd. Vs Addl. Cit(A) 129, Transport Centre, New Range-8 Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Dcit Vs Sindhu Trade Links Ltd. Central Circle-21 129, Transport Centre, New New Delhi Rohtak Road (Appellant) Punjabi Bagh New Delhi Aaacs0447A (Respondent) Vs Sindhu Trade Links Ltd. Dcit 129, Transport Centre, New Circle-8(1) Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Appellant By Sh. Salil Kapoor, Adv Respondent By Sh. Saras Kumar, Sr. Dr Date Of Hearing 16.07.2020 Date Of Pronouncement 11.09.2020 Orders Dated 21/2/2014 For Assessment Year 2008-09 & 2009-10 Respectively Passed By Cit(A)’S-Xi, New Delhi.

Section 14ASection 2(22)Section 69

…total investments. The Ld. AR relied upon the following decisions: a. ACB India Ltd. vs. ACIT (2015) 374 ITR 108 (Del. HC) b. ACIT vs. Vireet Investment (P.) Ltd. (2017) 58 ITR (T) 313 (Del. Tri.)(SB) c. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 414 ITR 122 (Del.) d. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 112 taxamann.com 322 (SC) Furthermore, the Assessing Officer as well as the CIT(A) have failed to appreciate that the assessee had sufficient interest free fund to make the investment and therefore, no disallowance u/s 14A could have been made. The Ld. AR relied upon the following…

M/S. Sindhu Trade Links Ltd., New Delhi vs. Addl.CIT, New Delhi

The appeals are partly allowed for statistical purpose

ITA 2428/DEL/2014[2008-09]Status: DisposedITAT Delhi11 Sept 2020AY 2008-09

Bench: Shri R. K. Panda & Ms Suchitra Kamblesindhu Trade Links Ltd. Vs Addl. Cit(A) 129, Transport Centre, New Range-8 Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Dcit Vs Sindhu Trade Links Ltd. Central Circle-21 129, Transport Centre, New New Delhi Rohtak Road (Appellant) Punjabi Bagh New Delhi Aaacs0447A (Respondent) Vs Sindhu Trade Links Ltd. Dcit 129, Transport Centre, New Circle-8(1) Rohtak Road New Delhi Punjabi Bagh New Delhi (Respondent) Aaacs0447A (Appellant) Appellant By Sh. Salil Kapoor, Adv Respondent By Sh. Saras Kumar, Sr. Dr Date Of Hearing 16.07.2020 Date Of Pronouncement 11.09.2020 Orders Dated 21/2/2014 For Assessment Year 2008-09 & 2009-10 Respectively Passed By Cit(A)’S-Xi, New Delhi.

Section 14ASection 2(22)Section 69

…total investments. The Ld. AR relied upon the following decisions: a. ACB India Ltd. vs. ACIT (2015) 374 ITR 108 (Del. HC) b. ACIT vs. Vireet Investment (P.) Ltd. (2017) 58 ITR (T) 313 (Del. Tri.)(SB) c. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 414 ITR 122 (Del.) d. PCIT vs. Caraf Builders & Construction (P.) Ltd. (2019) 112 taxamann.com 322 (SC) Furthermore, the Assessing Officer as well as the CIT(A) have failed to appreciate that the assessee had sufficient interest free fund to make the investment and therefore, no disallowance u/s 14A could have been made. The Ld. AR relied upon the following…

DCIT Cen Cir 7(3), Mumbai vs. Roselab Finance Ltd, Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 6341/MUM/2018[2012-13]Status: DisposedITAT Mumbai22 Jan 2020AY 2012-13

Bench: Shri Saktijit Dey & Shri Rajesh Kumar

For Appellant: Smt. Jothilakshmi NayakFor Respondent: Shri Yogesh A. Thar
Section 14A

…6) (SC). ITA Nos. 6341/Mum/2018 Roselab Finance Ltd., Mumbai. 2. PCIT Vs. HSBC Invest Direct (Ind) Ltd., (ITA No. 1672 of 2016). 3. M/s. Nirved Traders Pvt. Ltd., Vs. DCIT (ITA No. 149 of 2017) (Bom HC) 4. PCIT Vs. Caraf Builders & Constructions (P.) Ltd., (414 ITR 122) (Del HC). 5. Maharashtra Agro Industries Development Corp. Ltd., Vs. ACIT (ITA No. 6566/Mum/2013) 6. Aditya Medisales Ltd., Vs. DCIT (176 ITD 783) (Ahm T) 6. We have considered rival submissions and perused the material on record. We have also carefully examined the decisions cited before us. As regards contention of learned Departmental Represe…

ITO- 11(3)(4), Mumbai vs. Yash Vikram Infrastructure Pvt. Ltd., Mumbai

In the result, appeal filed by the revenue for assessment year 2013-

ITA 3133/MUM/2018[2013-14]Status: DisposedITAT Mumbai30 Dec 2019AY 2013-14

Bench: Shri Shamim Yahya (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2013-14 The I.T.O.-11 (3)(4), M/S Yash Vikram Room No. 429, Aayakar Bhavan, Infrastructure Private Limited, 4Th Floor, M.K. Marg, 662/8 Kanyakumari, Mumbai - 400020 Vs. Sir S.V. Marg, Andheri (East), Mumbai - 400059 Pan: Aaacy2465N (Appellant) (Respondent) Revenue By : Bharti Singh (Dr) Assessee By : None Date Of Hearing: 16/12/2019 Date Of Pronouncement: 30/12/2019

For Appellant: NoneFor Respondent: Bharti Singh (DR)
Section 14Section 143Section 14A

…Punjab and Haryana High Court in the case of Pr. CIT vs. M/s Empire Package Pvt. Ltd (supra) and the decisions of the coordinate Benches of the Tribunal. Recently, in the case of Pr. Commissioner of Income Tax -2 vs. Caraf Builders and Constructions Pvt. Ltd. 414 ITR 122 (Delhi), the Hon’ble Delhi High Court has held that upper disallowance u/s 14A read with Rule 8D cannot exceed exempt income of the relevant year. Since, the findings of the Ld. CIT (A) are based on the ratio laid down by the Hon’ble Delhi High Court and the Punjab & Haryana High Court, and the decisions of the Mumbai Tribunal referred above, we…

M/S. Sahara India Mass Communication Ltd., Gurgaon vs. DCIT, New Delhi

In the result, appeal of the assessee is accordingly allowed

ITA 4526/DEL/2011[2008-09]Status: DisposedITAT Delhi18 Dec 2019AY 2008-09

Bench: Shri R.K. Panda & Shri K.Narasimha Charyassessment Year: 2008-09

Section 10Section 14Section 14A

…s is applicable from assessment year 2008-09. 4. While challenging the impugned order only argument advanced before us is that in view of the decision of the Hon’ble jurisdictional High Court in the case of PCIT vs. CarafBuilders &Constructions (P) Ltd (2019) 414 ITR 122 (Delhi), the learned Assessing Officer committed an error in taking the total value of investment and not the investment that had yielded exempt income for computing the disallowance under section rule 8D (2) (ii) of the Rules. 5. Ld. DR placed reliance on the orders of the authorities below. 6. We have gone through the orders of the authoritie…

Dinesh Jayantilal Jain, Mumbai vs. ITO 21(1)(3), Mumbai

In the result, appeal of the assessee is allowed in part

ITA 6701/MUM/2018[2013-14]Status: DisposedITAT Mumbai12 Dec 2019AY 2013-14

Bench: Shri R.C.Sharma, Am & Shri Vikas Awasthy, Jm Dinesh Jayantilal Jain, Vs. I.T.O.-21(1)(3), 208/209, Jodia Mansion, Mumbai. Ganpatrao Kadam Marg, Mumbai. Pan/Gir No.Aabpj 4702 F (Appellant) .. (Respondent)

Section 143(3)Section 14A

…f the Act cannot exceed the exempt income. The Hon’ble Punjab & Haryana High Court in the case of PCIT Vs State Bank of Patiala (2017) 393 ITR 476 (P&H) and the Hon’ble Delhi High Court in the case of PCIT Vs Caraf Builders & Constructions (P) Ltd. (2019) 414 ITR 122 (Del) have held that the disallowance U/s 14A of the Act cannot exceed the exempt 3 Dinesh Jayantilal Jain Vs ITO income. The ld AR also placed on record various judicial pronouncements of the ITAT to the same effect. We had deliberated on the various judicial pronouncements following the proposition laid down therein, we direct the A.O. to…