This article provides a detailed analysis of the case ITA 253/DEL/2019, where the appellant, Holtec Consulting India Pvt. Ltd., New Delhi, appealed against the order of the Commissioner of Income Tax (Appeals) concerning the assessment year 2010-11. The appeal was filed on 14.01.2019 and the final order was pronounced on 29.07.2022.
The appellant, Holtec Consulting India Pvt. Ltd., contested the disallowance of INR 43,00,745/- made by the Assessing Officer (AO) under Section 14A of the Income Tax Act, 1961. The disallowance was upheld by the CIT(A) in an order dated 28.10.2018, leading to the current appeal.
The main issues raised by the appellant included:
The appellant was represented by Shri Atul Ninawat, CA, while the respondent was represented by Shri Gurpreet Shah Singh, Sr.DR.
The ITAT, comprising Shri Kul Bharat, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member, heard the case on 27.07.2022. The tribunal considered the appellant’s arguments, especially the claim that disallowance under Rule 8D(2)(iii) should be based only on investments that yielded exempt income during the year. The tribunal referred to a similar decision in the appellant’s case for AY 2009-10 and directed the AO to re-compute the disallowance accordingly.
The tribunal made the following key observations:
In light of the appellant’s submission and supporting precedents, the tribunal partially allowed the appeal, directing the AO to re-compute the disallowance. The tribunal also addressed an issue regarding the assessed income being determined at a higher figure without basis and restored this matter to the AO for factual verification.
This case underscores the importance of accurate computation of disallowances under Section 14A, highlighting that only investments yielding exempt income should be considered. It reaffirms the judicial stance that mechanical disallowance without proper basis is not acceptable.
The order was pronounced in the open court on 29.07.2022 by Shri Kul Bharat, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member.
Case Number: ITA 253/DEL/2019
Appellant: Holtec Consulting India Pvt. Ltd., New Delhi
Respondent: Addl. CIT, Special Range – 4, New Delhi
Assessment Year: 2010-11
Order Type: Final Tribunal Order
Date of Order: 2022-07-29
Date of Pronouncement: 2022-07-29
This case is a significant reference for taxpayers and professionals dealing with disallowance under Section 14A, emphasizing the need for a precise and justified approach in tax assessments.
Holtec Consulting India Pvt. Ltd. vs. Addl. CIT: Analysis of ITA 253/DEL/2019
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