Dcit Corporate Circle 1 1 Chennai v. Agile Electric Sub Assembly Pvt Ltd Chennai

In The Income Tax Appellate Tribunal A Bench Chennai Before Shri N R S Ganesan Judicial Member And Shri A Mohan Alankamony Accountant Member Ita No 1840 Mds 2017 C O No 138 Mds 2017 Assessment Year 2012 13 The Deputy Commissioner Of Income Tax Corporate Circle 1 1 Chennai 600 034 V M S Agile Electric Sub Assembly Pvt Ltd A 33 A 34 A 36 Phase I Mepz Sez Tambaram Chennai 600 045 Pan Aabci 3929 Cj Appellant Respondent Cross Objector Appellant By Shri Ar V Sreenivasan Jcit Respondent By Sh T Banusekar Ca 0 1 Date Of Hearing 21 12 2017 2 1 Date Of Pronouncement 28 12 2017 O R D E R Per N R S Ganesan Judicial Member This Appeal Of The Revenue Is Directed Against T He Order Of The Principal Commissioner Of Income Tax Appeals 1 Chennai Dated 23 05 2017 And Pertains To Assessment Year 20 12 13 The Assessee Has Filed A Cross Objection Against The Ve Ry Same Order Of 2 I T A No 1840 Mds 17 C O No 138 Mds 17 The Pr Cit Appeals Since Common Issue Arises Fo R Consideration In Both The Appeal And The Cross Objection We Hear D The Same Together And Disposing Of The Same By This Common O Rder 2 Shri Ar V Sreenivasan The Ld Departmental Representative Submitted That The Assessing Office R Disallowed The Expenditure Incurred By The Assessee For Earning Ex Empted Income By Applying Rule 8 D 2 Of The Income Tax Rules 196 2 However The Pr Cit Appeals Found That The Assessee Has No T Earned Any Income Therefore According To The Ld D R Ther E Cannot Be Any Disallowance Under Section 14 A Of The Income Tax Ac T 1961 In Short The Act According To The Ld D R Rule 8 D 2 Very Clearly Says That Irrespective Of The Fact Whether Assessee Has Earned Any Exempted Income Or Not The Expenditure Incurred Fo R Earning Exempted Income Has To Be Disallowed According To The Ld D R Rule 8 D 2 Provides Method For Disallowance In Case The Assessing Officer Is Not Satisfied With The Computation Made By The Assessee Therefore The Pr Cit Appeals Is Not Justified In Deleting The Disallowance Made By The Assessing Officer 3 On The Contrary Sh T Banusekar The Ld Repre Sentative For The Assessee Submitted That The Pr Cit Appeals B Y Placing 3 I T A No 1840 Mds 17 C O No 138 Mds 17 Reliance On The Judgment Of Madras High Court In Re Dington India Ltd V Addl Cit 2017 Tmi 318 Found That When Th Ere Was No Dividend Income There Cannot Be Any Disallowance U Nder Section 14 A Of The Act In This Case According To The Ld Representative The Assessee Has Not Earned Any Income Therefore The Pr Cit Appeals Has Rightly Followed The Judgment Of M Adras High Court 4 We Have Considered The Rival Submissions On Eith Er Side And Perused The Relevant Material Available On Record It Is Not The Case Of The Revenue That The Assessee Has Earned Any Exe Mpted Income When The Assessee Has Not Earned Exempted Income This Tribunal Is Of The Considered Opinion That There Ca Nnot Be Any Disallowance Of Expenditure In View Of The Judgment Of Madras High Court In Redington India Ltd Supra Therefore We Are Unable To Accept The Contention Of The Ld Departmental Repre Sentative The Pr Cit Appeals Has Rightly Followed The Judgment Of Madras High Court In Redington India Ltd Supra Therefore This Tribunal Do Not Find Any Reason To Interfere With The Order Of The Lower Authority And Accordingly The Same Is Confirmed 4 I T A No 1840 Mds 17 C O No 138 Mds 17 5 Since The Issue Of Disallowance Under Section 14 A Of The Act Raised By The Revenue In The Appeal Stands Dismisse D The Cross Objection Filed By The Assessee Also Stands Dismiss Ed As Infructuous 6 In The Result The Appeal Of The Revenue As Well As The Cross Objection Of The Assessee Stand Dismissed Order Pronounced On 28 Th December 2017 At Chennai Sd Sd A Mohan Alankamony N R S Ganesan Accountant Member Judicial Member Chennai 4 Dated The 28 Th December 2017 Kri 156 76 1 Copy To 1 Appellant 2 Respondent 3 Principal Cit A 1 Chennai 4 Principal Cit Chennai 1 Chennai 5 68 1 Dr 6 9 Gf