Dcit New Delhi v. M S Manpower Group Services India Pvt Ltd Formerly Known As Manpower Services India Pvt Ltd New Delhi

In The Income Tax Appellate Tribunal Delhi Bench G New Delhi Before Sh N K Saini Am And Smt Beena A Pillai Jm Ita No 2312 Del 2016 Asstt Year 2012 13 Dcit Circle 16 1 New Delhi Vs M S Manpo Wer Group Services India Pvt Ltd Formerly Known As Manpower Services India Pvt Ltd 371 Aggarwal Millennium Tower Ii Netaji Subhash Place Pitampura New Delhi 110034 Appellant Respondent Pan No A A Bcm 6914 F As Sessee By None Revenue By Sh Kaushlendra Tiwari Sr Dr Date Of Hearing 26 12 201 7 Date Of Pronounce Ment 28 12 201 7 Order Per N K Saini Am This Is An Appeal By The Depart Ment Against The Order Dated 2 5 02 2016 Of Ld Cit A 19 New Delhi 2 Nobody Was Present On Behalf Of The Assessee We Therefore Proceeded The Ex Parte Order Qua The Assessee And The Appeal Has Been Decided After Considering The Submissions Of The Ld D R 3 Following Grounds Have Been Raised In This Appeal 1 Whether On The Facts And Circumstances Of The Case In Law The Ld Cit A Justified In Deleting Ita No 2312 De L 201 6 Manpower Group Services India Pvt Ltd 2 The Addition Of Rs 42 66 721 Made By Ao U S 14 A Of The Income Tax Act 1961 Act Read With R Ule 8 D Of The Income Tax Rules 1962 Rules 2 Whether On Facts And Circumstances Of The Case And In Law The Cit A Is Justified In Not Upholding Disallowance Of Rs 42 66 721 Made By The Ao U S 14 A Of The Act Without Considering Legislative Intend O F Introducing Section 14 A By The Finance Act 2001 As Clarified By The Cbdt Circular No 5 2014 Dated 10 02 2014 3 Whether On Facts And On Circumstances Of The Case And In Law The Cit A Is Justified In Not Upholding Disallowance Of Rs 1 34 19 838 Ma De By The Ao U S 14 A Of The Act Without Considering A Legal Principle That Allowability Of Expenditure Under The Act Is Not Conditional Upon The Earning Of The Income As Upheld By Honble Supreme Court In Case Of Cit Vs Rajendra Prasad Moody 1978 115 It R 519 4 That The Order Of The Ld Cit A Is Erroneous And Is Not Tenable On Facts And In Law 5 That The Grounds Of Appeal Are Without Prejudiced To Each Other 6 That The Appellant Craves Leave To Add Alter Amend Or Forgo Any Ground S Of Appeal Either Before Or At The Time Of Hearing Of The Appeal 4 From The Above Grounds It Is Gathered That Only Grievance Of The Department Relates To The Deletion Of Ita No 2312 De L 201 6 Manpower Group Services India Pvt Ltd 3 Addition Made By The Ao U S 14 A Of The Income Tax Act 1961 Hereinafter Referred To As The Act R W Rule 8 D Of The Income Tax Rules 1962 5 Facts Of The Case In Brief Are That The Assessee Was Engaged In The Business Of Providing Temporary Staffing Solutions Personnel Recruitment And Placement Services Executive Search Consulting And Rela Ted Services The Assessee E Filed The Return Of Income Claiming Gross Losses Of Rs 41 62 938 On 28 11 2012 Later On The Case Was Selected For Scrutiny The Ao During The Course Of Assessment Proceedings Noticed That The Assessee Had Invested Rs 60 15 00 000 In Shares Securities And The Income Earned From These Investments Will Not Form The Part Of Total Income Under The Act Thus As Per The Provisions Of Section 14 A Of The Act Disallowance Was Required To Be Made As Per Rule 8 D Of The Income Tax Rules 1962 However The Assessee Had Not Made Any Disallowance The Ao Disallowed A Sum Of Rs 42 66 721 6 Being Aggrieved The Assessee Carried The Matter To The Ld Cit A And Submitted That The Investment Of Rs 60 15 00 000 Was Being Carried For Ward And Had Not Shown In The Books Of Account And That The Assessee Had Not Ita No 2312 De L 201 6 Manpower Group Services India Pvt Ltd 4 Received Any Dividend Nor Claimed Any Amount Received By The Assessee Company As Dividend It Was Further Stated That The Similar Addition Made In The Previous Year Has Been Decid Ed In Favour Of The Assessee By The Ld Cit A Vide Order Dated 21 05 2015 7 The Ld Cit A After Considering The Submissions Of The Assessee Deleted The Addition By Following The Judgment Of The Hon Ble Jurisdictional High Court In The Case Of Chemin Vest Ltd Vs Cit Iv 2015 378 Itr 33 Del 8 Now The Department Is In Appeal 9 We Have Considered The Submissions Of The Ld Dr And The Material On Record In The Present Case T He Contention Of The Assessee That No Exempt Income Was Received Durin G The Year Under Consideration Has Not Rebutted On A Similar Issue The Hon Ble Jurisdictional High Court In The Case Of Cheminvest Ltd Vs Cit Iv Held As Under The Expression Does Not Form Part Of The Total Income In Section 14 A Of The Income Tax Act 1961 Envisages That There Should Be An Actual Receipt Of Income Which Is Not Includible In The Total Income During The Relevant Pre Vious Year For The Purpose Of Disallowing Any Expenditure Incurred In Relation To The Income In Other Words Ita No 2312 De L 201 6 Manpower Group Services India Pvt Ltd 5 Section 14 A Will Not Apply If No Exempt Income Is Received Or Receivable During The Relevant Previous Year 10 We Therefore By Keeping In View The Ratio Laid Down In The Aforesaid Referred To Case Do Not See Any Merit In The Appeal Of The Department And Are Of The Confirmed View That The Ld Cit A Was Fully Justified In Deleting The Disallowance Made By The Ao U S 14 A Of The Act R W R 8 D Of The Income Tax Rules 1962 Since No Exempt Income Was Claimed By The Assessee 11 In The Result The Appeal Of The Department Is Dismissed Order Pronounced In The Court On 28 12 2017 Sd Sd Beena A Pillai N K Saini Judicial Member Accountant Member Dated 28 12 2017 Subodh Copy For Warded To 1 Appellant 2 Respondent 3 Cit 4 Cit Appeals 5 Dr Itat Assistant Registrar