TMI Blog2020 (5) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... hd/2015 - - - Dated:- 27-5-2020 - Shri Rajpal Yadav, Vice-President For the Assessee : Shri Ankit Talsania For the Revenue : Shri Lalit P.Jain, Sr.DR ORDER Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-6, Ahmedabad dated 23.2.2015 passed for the Asstt.Year 2011- 12. 2. Originally the assessee took three grounds of appeal, wherein it has challenged confirmation of disallowance of ₹ 2,97,347/- made by the AO under section 14A of the Income Tax Act, 1961 r.w rule 8D(2)(iii) of the Income Tax Rules. However, during the pendency of the appeal the assessee has raised additional grounds of appeal whereby it has pleaded that the assessee has made disallowance of ₹ 59,55,723/- under section 14A suo motto. Since there is no tax free income in the hands of the assessee, and therefore, in view of decision of Hon ble Gujarat High Court in the case of Corrtect Energy P.Ltd. dated 24.3.2014 no disallowance deserves o be made. This plea was raised by the assessee in the original grounds of appeal also, and he made reference to this decision of Hon ble Gujarat High Court. 3. With the assistance of the ld.representatives, I have gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled for this relief. The CIT(A) in the case of Greeland Infracon (supra) has allowed this plea of the assessee. The matter travelled to the Tribunal, and the Tribunal has upheld the order of the CIT(A). Shri Talsania informed me that Tax Appeal bearing no.239 of 2019 was filed before the Hon ble Gujarat High Court against this order of the Tribunal, and same stood dismissed on 9.7.2019. On the strength of this decision, he pleaded that additional grounds of appeal raised by the assessee be allowed; disallowance made by the AO on account of administrative expenses as well as disallowance worked out by the assessee suo motto for the purpose of section 14A be deleted, and the AO be directed to recompute the income of the assessee. 5. On the other hand, the ld.DR was unable to controvert the contention of the ld.counsel for the assessee. 6. At this stage, I deem it appropriate to take note of the discussion made by the Tribunal in the case of Greeland Infracon(supra) because the issue is verbatim same. The finding of the Tribunal in the case of Greeland Infracon (supra) reads as under: 6. We have carefully considered the rival submissions and perused the orders of the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 14A of the Act can be triggered only if assessee seeks to square off expenditure against the income which does not form part of total income under the Act and Section 14A of the Act cannot be invoked where no exempt income was earned in the relevant assessment years. In consonance with the judicial precedents, we do not see any infirmity in the conclusion drawn by the CIT(A) for non-applicability of Section 14A of the Act in the facts of the case. 8. We shall now turn to the second issue raised on behalf of the Revenue regarding propriety of the action of the CIT(A) in granting relief on the disallowance (suo moto made by the assessee) beyond the return of income and in the absence of any formal revised return. The CIT(A) has discussed this aspect in very great d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting relief higher than claimed in the return of income cannot be faulted in law. 7. This order has been upheld by the Hon ble High Court. It is pertinent to note that on the issue, whether suo motto disallowance made by the assessee, could be excluded from the taxable income offered by itself, by the appellate authority, on the basis of position of law changed, on account of subsequent decision of the Hon ble High Court ? It is true that return was filed by the assessee on 30.9.2011. At that point of time decision of Hon ble Gujarat High Court in the case of Corrtect Energy P.Ltd. was not in picture. It was delivered on 24.3.2014. Therefore, on the basis of position of law, the assessee might have worked out the expenses which were required to be disallowed under section 14A in spite of non-availability of tax free income. The question is, whether the assessee can be permitted to take a plea that his self-admission in the return of income be allowed to be withdrawn on the basis of subsequent decision of Hon ble jurisdictional High Court, and his income is to be recomputed ? With regard to the above proposition, the ITAT in the case of Greeland Infracon (supra) has already tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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