TMI Blog2019 (4) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. - ITA No.297/Ahd/2017 - - - Dated:- 29-3-2019 - Shri Pramod Kumar, Vice President And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri Ankit Talsania, A.R. For the Respondent : Shri Sewak, Sr. D.R. ORDER PER MS. MADHUMITA ROY - JM: The instant appeal filed by the assessee is against the order dated 28.11.2016 passed by the Commissioner of Income Tax (Appeals) 1, Ahmedabad under section 143(3) of the Income Tax Act, 1961 (in short the Act ) arising out of the order dated 29.01.2016 passed by the Dy. Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad for the Assessment Year 2013-14. 2. The assessee filed its return of income on 29.09.2013 declaring total loss of Rs.(-)32,28,046/- whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance as per provision u/s 14A Rule 8D has been worked out at ₹ 4,36,028/-. Since the appellant had suo moto disallowed an amount of ₹ 43,16,239/- in its return of income further disallowance to the tune of ₹ 44,042/- was made by the Learned AO while determining assessed income. The order passed by the Learned AO was confirmed by the Learned CIT(A). Hence, the instant appeal before us. 3. At the time of hearing of the instant appeal, the Learned Advocate appearing for the assessee submitted before us that similar addition has been deleted by the Learned CIT(A) in one of the group companies namely Greenland Infracon Pvt. Ltd. in A.Ys. 2012-13 and 2013-14 when the appellate authority fully allowed the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee since there was no admitted exempt income or dividend income earned by the assessee in the relevant assessment year granting total relief in the matter of disallowance u/s 14A of the Act including on account of suo moto disallowance made by the assessee; the relevant portion of the said order passed by the co-ordinate bench is as follows: 4. When the matter was called for hearing, the leaned AR for the assessee straightway adverted our attention to the undisputable fact recorded by the AO in para 4.1.1 of its order that the investments made by the assessee company has not given rise to any exempt income concerning the assessment year. Notwithstanding such fact, the assessee voluntarily disallowed ₹ 98.03 Lakhs against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in terms of Rule 8D of the Income Tax Rules. 6. We have carefully considered the rival submissions and perused the orders of the authorities below. The substantive question arises in the Revenue's appeal is to ascertain the correctness of the action of the CIT(A) in refusing to endorse the action of the AO for resorting to disallowance under s.14 A of the Act . Two broad issues emerges in the context of the case; (i) whether the disallowance under s.14A is maintainable where admittedly no exempt income i.e. dividend was earned by the assessee in the relevant assessment year and (ii) whether the CIT(A) was justified in going beyond the return of income and remove the disallowance which the assessee itself has made while filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. (2016) 66 taxmann.com 356 (Guj). The aforesaid judicial fiat was reiterated by the Hon'ble Delhi High Court in the case of Joint Investments Pvt. Ltd. vs. CIT reported in 372 ITR 692 (Delhi) wherein Hon'ble Delhi High Court has categorically ruled that disallowance under s.14 A of the Act cannot exceed the amount of tax exempt income. Notably, the SLP filed against the decision of Hon'ble Madras High Court in Chettinad Logistics (supra) has been dismissed by Hon'ble Supreme Court in CIT vs. Chettinad Logistics (P .) Ltd. (2018) 95 taxmann.com 250 (SC). Hence, in conformity with the judicial precedents, we find substantial merit in the conclusion drawn by the CIT(A) which essentially holds that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act are under sacrosanct obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, mis-conception or not being properly instructed, is over assessed, the authorities under the Act are required to ensure that only legitimate tax dues are collected. This is the view which flows from innumerable judgments including CIT vs. Shelly Products (2003) 261 ITR 367 ( SC), S. R. Koshti vs. CIT (2005) 276 ITR 165 ( Guj), Ester Industries vs. CIT (2009) 185 TAXMAN 266 (Delhi) and CIT vs. Pruthvi Brokers Shareholders (P.) Ltd. [2012] 349 ITR 336 (Bom). The essence of these decisions are that mere admission on the part of the assessee with respect to an addition/disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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