TMI Blog2019 (11) TMI 1717X X X X Extracts X X X X X X X X Extracts X X X X ..... er considering relevant facts has rightly deleted additions made by the AO towards disallowances of deduction claimed u/s 80IA - No reasons to interfere in the order of the Ld. CIT(A) and hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject ground taken by the revenue. Addition u/s 14A - disallowance of expenditure incurred in relation to exempt income - HELD THAT:- We find that the Ld. DR for the revenue did not dispute the fact that there is no exempt income earned for the year under consideration. When there is no exempt income, the question of disallowance of expenditure incurred in relation to said exempt income does not arise. This legal proposition is supported by the decision of Hon ble Bombay High Court in the case of CIT vs M/s. Ballarpur Industries [ 2016 (10) TMI 1039 - BOMBAY HIGH COURT] where it was categorically held that provision of section 14A would not apply, in case, there is no exempt income was received or receivable during the relevant previous year - Decided in favour of assessee. Re-computation of book profit u/s 115JB in respect of disallowance of expenditure incurred in relation to exempt income u/s 14A - HELD THAT:- We fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.02.2014 that Rule 8D read with section 14A of the Income tax Act, 1961 provides for disallowance of the expenditure even where taxpayer in a particular year has not earned any exempt income. iii. Whether on the facts and circumstances of the case and I Law the Ld. CIT(A) erred in not confirming the disallowance made u/s 14A r.w.s. 8D to Boo Profit as per clause (f) to Explanation 1 u/s 115JB of the Income Tax Act, 1961 overlooking the judgment of Hon ble Delhi High Court in the case of CIT (Central Circle-II) Vs. Goetz (India) Ltd in ITA No.1179+/2010, dated 09.12.2013 1. The appellant prays that the order of the Ld. CIT(A) be set aside and the order of the AO be restored. 2. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary. 3. Brief facts of the case are that the assesse company is engaged in the business of developing and operating mechanized modern ports. It also provides project management and consultancy services to its subsidiaries for developing port facilities for which it receives consultancy income. The assessee has filed its return of income for AY 2013-14 on 29/11/2013, declaring total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made towards expenditure incurred in relation to exempt income. The Ld. CIT(A) after considering relevant submissions of the assessee and also by relied upon various judicial precedents, including in the decision of ITAT, Chennai Bench, in the case of ACIT vs Precot Meridian Limited (2014) 148 ITD 229 deleted additions made by the AO towards disallowances of deduction claimed u/s 80IA of the I.T. Act, 1961 by holding that a plain reading of section 80AC makes it clear that from the AY 2006-07 on wards deduction claimed u/s 80IA shall not be allowed, unless the assessee furnished a return on or before the due date specified under sub section (1) of section 139, but nowhere in the section, it was provided that unless, the assessee makes a claim in its return filed u/s 139(1), the said claim is allowable. We, further observed that when, assessee filed original return within due date specified u/s 139(1) and subsequently files a revision return under the provision of section 139(5) to rectify any omission or any wrong statement made in the return filed u/s 139(1), the same can take the character of original return and hence, the assessee entitled for additional deduction claimed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the same time section 139(5) provides for filing a revised return, when the assessee discovers any omission or any wrong statement made in the return already filed under sub-section (1) of Section 139 or return filed under sub-section(1) of section 142. This revised return can be filed at any time before expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier . 10. In the case of the assessee, it had filed a revised return on 30/03/2010 which is before expiry of one year from the relevant assessment year and therefore the return filed is a valid return as per the provisions section 139(5), as the original return was filed under section 139111 within due date prescribed. Ln fact the assessee complied with the provisions of section 80AC of the Act by filing its original return on 29/09/2008 which is within the due date specified under section 139(1) of the Act. In view of our above observations, the submission of the Departmental Representative that since the assessee had not made any claim in its original return filed under section 139(1), no deduction is allowable under section 80IA of the Act, in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income u/s. 139(1) within the time limits and hence it was held that the requirement of law i e. section 80AC rw s. 139{1) 139(1B) was not satisfied. 6.3.6 Thus The facts of the case in the present case are identical to the facts of the case before the Hon'ble Tribunals as discussed above. Therefore the appellant is eligible for deduction u/s 80IA of the Act. The Hon'ble Supreme Court in The case of Anchor Pressings (P) Ltd vs CIT (1986) 161 ITR 159 has held that if on the basis of material placed on the record, the assessee s entitled to claim any deduction but forget to make his claim in the return or in the course of assessment proceedings then assessee is entitled to make such claim by moving application under section 154 for rectification since non-grating of deduction/exemption would amount to mistake apparent from record. 5. Insofar as, disallowance of expenditure incurred in relation to exempt income u/s 14A, the Ld. CIT(A) by following the decision of Hon ble Delhi High Court, in the case of Joint investment Private Limited vs CIT (215) 372 ITR 694 held that disallowance contemplated u/s 14A cannot shallow entire exempt income earned for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(5) of the I.T. Act, 1961. 8. The Ld. AR for the assesse, on the other hand, strongly supporting order of the Ld. CIT(A) submitted that the issue is squarely covered in favour of the assessee by the decision of ITAT in number of case, where the law has been explained in light of provision of section 80AC and held that as per the provision of section 80AC filing of return within due date specified u/s 139(1) is mandatory, but there is no stipulation as to claiming deduction in the return of income, as long as, the claim is within due date specified under sub section (5) of section 139, then the assessee is entitled for deduction u/s 80IA of the I.T. Act, 1961. The Ld. CIT(A) after considering relevant facts has rightly deleted additions made by the AO towards disallowances of deduction claimed u/s 80IA and his order should be upheld. 9. We have heard both the parties, perused the material available on record and gone through orders of the authorities below along with case laws cited by both parties. We find that the Ld. CIT(A) has recorded categorical finding, in light of provision of section 80AC and held that nowhere, in the section, it was provided that unless, the assesee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, the assessee fulfills the conditions prescribed u/s 80AC of the Act, in order to be eligible for deduction u/s 80IA of the I.T. Act, 1961. The Ld. CIT(A) after considering relevant facts has rightly deleted additions made by the AO towards disallowances of deduction claimed u/s 80IAof the I.T. Act 1961. We do not see any reasons to interfere in the order of the Ld. CIT(A) and hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject ground taken by the revenue. 10. The next issue that came up of our consideration from ground No.2 of revenue appeal is disallowance of expenditure incurred in relation to exempt income. We find that the Ld. CIT(A) has recorded categorical findings, in light of the decision of Hon ble Delhi High Court in the case of Joint Investment Pvt. Ltd. vs CIT (2015) 372 ITR 694 and held that disallowance contemplated u/s 14A cannot exceed the amount of exempt income and further, it was held in the case of CIT vs Holcim India Pvt. Ltd. (2014) 90 CCH 81 that there can be no disallowance u/s 14A in the absence of any exempt income. We find that the Ld. DR for the revenue did not dispute the fact that there is no exempt income earned for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reject ground taken by the revenue. 12. In the result, appeal filed by the revenue is dismissed. ITA No.3708/Mum/2018 13. The revenue has raised the following grounds of appeal. i. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in deleting the addition made under Rule 8D(2) of the Income Tax Rules 1962 holding that no exempt income has been earned, without appreciating the fact that CBDT after analyzing section 14A vis- -vis Rule 8D has clarified in circular no.5/2014 dated 11.02.2014 that Rule 8D read with section 14A of the Income tax Act, 1961 provides for disallowance of the expenditure even where taxpayer in a particular year has not earned any exempt income. ii. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not confirming the disallowance made u/s 14A r.w.r. 8D to Book Profit as per clause (f) to Explanation 1 u/s 115JB of the Income Tax Act 1961 overlooking the judgment of Hon ble Delhi High Court in the case of CIT (Central Circle-II) vs. Goetz (India) Ltd in ITA No.1179/2010 dated 09.12.2013. 1. The appellant prays that the order of the Ld. CIT(A) b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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