Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 1330 - ITAT MUMBAIRevision u/s 263 - interest income and turnover mismatch - application of provision of section 14A r.w. Rule 8D - HELD THAT:- If, you go through the points taken up by the PCIT for verification regarding interest income and turnover mismatch, the figure taken up by the PCIT is exactly one and the same. The assessee has reported interest income under the head sales turnover in its audit reports, whereas in ITR sales turnover and interest income has been shown separately. If, you add back sales turnover and interest income, then there would be no difference in turnover reported by the assessee in its audit report. This fact has been accepted by the PCIT, but he went on to direct the AO to verify the facts, in light of reconciliation filed by the assessee without pointing out, how the order passed by the AO is erroneous, in so far as, it is prejudicial to the interest of the revenue. Similarly, in respect of disallowances of interest expenditure u/s 14A, the assessee has made out a case of availability of own funds in form of capital, which is over and above, the amount of investments in shares and securities, which could yield exempt income. The assessee has also made out a case of no exempt income for the year under consideration. It is settled position of law that in case there is no exempt income earned for the year under consideration, then there would be no disallowances of expenditure incurred in relation to exempt income u/s 14A. This legal proposition is supported by number judicial precedents, including decision of Hon’ble Supreme Court in the case of CIT vs Chettinad Logistics Pvt.Ltd. [2018 (7) TMI 567 - SC ORDER] where, the Hon’ble Supreme Court has dismissed SLP filed by the revenue and upheld the findings of Hon’ble Madras High Court regarding no exempt income, no disallowances of expenditure u/s 14A of the I.T.Act, 1961. This legal proposition was further supported by the decision of Hon’ble Bombay High Court, in the case of Pr.CIT vs Ballarpur Industries Limited [2016 (10) TMI 1039 - BOMBAY HIGH COURT] where, similar view has been expressed by the High Court. Therefore, we are of the considered view that the Ld.PCIT has set aside assessment order passed by the AO without pointing out, how the assessment order passed by the AO is erroneous, in so far as, it is prejudicial to the interest of the revenue.
|