2021 (10) TMI 1198 - AT - Income Tax

Assessment u/s 153A - HELD THAT - The impugned addition made in Section 143(3) r.w.s. 153A assessment is not liable to be sustained since not based on any incriminating material and the same had already been made in Section 143(3) assessment. We therefore accept the assessee's grievance herein. Addition u/s 14A r.w.r 8D - HELD THAT - As decided in own case 2021 (9) TMI 124 - ITAT HYDERABAD the very disallowance stood accepted on the ground that it had not derived any exempt income. We therefore adopt the very precise reason herein as well to delete the impugned disallowance in light of case law Chettinad Logistics Pvt. Ltd. 2017 (4) TMI 298 - MADRAS HIGH COURT , Corrtech Energy Pvt. Ltd. 2014 (3) TMI 856 - GUJARAT HIGH COURT and Cheminvest Ltd. 2015 (9) TMI 238 - DELHI HIGH COURT - Decided in favour of assessee.

Summary

Issues:
Appeals against CIT(A)'s orders involving Section 14A r.w. Rule 8D disallowance in A.Y. 2012-13 and A.Y. 2014-15.

Analysis:

Issue 1: Disallowance under Section 14A r.w. Rule 8D in A.Y. 2012-13:
The assessee challenged the disallowance of ?6,82,685/- in A.Y. 2012-13. The ITAT noted that the Assessing Officer had already made the disallowance in the regular assessment for A.Y. 2012-13, rendering the subsequent addition in the Section 143(3) r.w.s. 153A assessment as a double addition. The CIT(A) had not addressed this issue on merits. The ITAT held that the impugned addition was not sustainable as it was not based on any new incriminating material and had already been considered in the Section 143(3) assessment. Consequently, the assessee's appeal for A.Y. 2012-13 (ITA No. 438/Hyd/2020) was allowed.

Issue 2: Disallowance under Section 14A r.w. Rule 8D in A.Y. 2014-15:
In the appeals for A.Y. 2014-15, the ITAT referred to a previous decision where a similar disallowance was deleted as no exempt income was derived. Citing case law, the ITAT deleted the disallowance of ?9,61,911/- each in both appeals for A.Y. 2014-15 (ITA Nos. 439 & 440/Hyd/2020). The ITAT followed the precedent and accepted the assessee's appeals for A.Y. 2014-15.

Issue 3: Applicability of Section 115JB MAT provision(s):
The judgment also mentioned the applicability of Section 115JB Minimum Alternate Tax (MAT) provision(s) concerning the impugned disallowance. However, the specific details or implications of this provision were not elaborated upon in the judgment.

In conclusion, all three appeals by the assessee were allowed based on the above analysis, with the ITAT directing a copy of the order to be placed in the respective case files. The judgment was pronounced in open court on 22nd October 2021.