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2022 (1) TMI 239 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - CIT-A deleted the addition - HELD THAT - We find that Ld.CIT(A has followed the judgements of Hon ble Delhi High Court rendered in the case of CIT vs Holcim India Ltd. 2014 (9) TMI 434 - DELHI HIGH COURT and CIT vs Cheminvest Ltd. 2015 (9) TMI 238 - DELHI HIGH COURT . Revenue has not brought to our notice any other binding precedents by the Hon ble High Court and Hon ble Supreme Court and therefore we do not see any reason to interfere in the finding of Ld.CIT(A) the same is hereby affirmed. Thus Ground No.1 raised by the Revenue is dismissed. Addition made u/s 14A r.w.Rule 8D of the Rules while calculating MAT liabilities u/s 115JB - CIT-A deleted the addition - HELD THAT - CIT(A) has decided the issue by following the judgement of Hon ble Delhi High Court rendered in the case of CIT vs Bhushan Steel Ltd. 2015 (9) TMI 1424 - DELHI HIGH COURT . We do not see any infirmity in the finding of Ld. CIT(A) the same is hereby affirmed. Expenditure related to employees stock option cost - CIT-A deleted the addition - HELD THAT - Keeping in view clear judicial decisions of higher Courts in the appellant s case only wherein the same issue has been decided in the assessee s favour the disallowance made by the AO of expenses on account of ESOP is deleted. Disallowance in respect of late deposit of ESI/EPF contribution - HELD THAT - Issue decided in favour of assessee as relying on PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. 2018 (9) TMI 2009 - DELHI HIGH COURT and AIMIL LIMITED 2009 (12) TMI 38 - DELHI HIGH COURT - Decided against revenue.
Issues Involved:
1. Deletion of disallowance made under Section 14A read with Rule 8D. 2. Deletion of addition made under Section 14A while calculating MAT liabilities under Section 115JB. 3. Deletion of addition of expenses related to Employee Stock Option Cost. 4. Deletion of disallowance in respect of late deposit of ESI/EPF charges. Issue-wise Detailed Analysis: 1. Deletion of Disallowance under Section 14A read with Rule 8D: The Revenue challenged the deletion of disallowance made by the CIT(A) under Section 14A read with Rule 8D. The CIT(A) observed that the assessee did not earn any dividend income during the financial year and relied on the jurisdictional decision of the Delhi High Court in the case of Cheminvest Ltd. 378 ITR 33, which stated that no disallowance under Section 14A can be made in the absence of tax-free income. The CIT(A) also referenced other decisions, including those of the ITAT Delhi Bench in Sunrays Properties & Investment Co. Pvt. Ltd. vs. JCIT and Global Capital Ltd. vs. ACIT, which supported the view that no disallowance can be made if there is no exempt income. The Tribunal upheld the CIT(A)'s decision, affirming that the Revenue did not present any contrary binding precedents. 2. Deletion of Addition under Section 14A while Calculating MAT Liabilities under Section 115JB: The Revenue contested the deletion of the addition made under Section 14A while calculating MAT liabilities under Section 115JB. The CIT(A) referenced the judicial decision in PR. CIT vs. Bhushan Steel Ltd., where it was held that disallowance under Section 14A should not be added back while computing book profit under Section 115JB, as the Explanation to Section 115JB does not specifically mention Section 14A. The Tribunal affirmed the CIT(A)'s decision, noting no infirmity in the finding. 3. Deletion of Addition of Expenses Related to Employee Stock Option Cost: The Revenue disputed the deletion of the addition of expenses related to Employee Stock Option Cost. The CIT(A) noted that this issue was previously decided in favor of the assessee by the Delhi High Court for the assessment year 2008-09, where it was held that expenses on account of Employees Stock Option are allowable. The CIT(A) referenced the High Court's decision in CIT v. Lemon Tree Hotels Ltd., which supported the allowability of ESOP expenses. The Tribunal upheld the CIT(A)'s decision, following the binding precedent of the High Court. 4. Deletion of Disallowance in Respect of Late Deposit of ESI/EPF Charges: The Revenue challenged the deletion of disallowance regarding the late deposit of ESI/EPF contributions. The CIT(A) referenced the Delhi High Court's decisions in CIT vs AIMIL Ltd. and PCIT vs Pro Interactive Service (India) Pvt. Ltd., which held that if the employees' contribution is deposited before the filing of the return, it should be allowed as a deduction. The Tribunal affirmed the CIT(A)'s decision, following the judicial precedents that supported the assessee's position. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decisions on all grounds raised. The Tribunal found no reason to interfere with the CIT(A)'s findings, which were based on binding judicial precedents and consistent with the legal principles established by the Delhi High Court. The order was pronounced in the open Court on January 4, 2022.
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