Case Number: ITA 1455/DEL/2019
Appellant: Holtec Consulting Pvt. Ltd., New Delhi
Respondent: Addl. CIT, Special Range-4, New Delhi
Assessment Year: 2015-16
Case Filed On: 2019-02-21
Order Type: Final Tribunal Order
Date of Order: 2022-11-16
Pronounced On: 2022-11-16
The present appeal has been preferred by Holtec Consulting Pvt. Ltd. (hereinafter referred to as the Assessee) against the order dated 16.11.2018 of Ld. CIT(A)-35, New Delhi, arising out of an appeal against the assessment order dated 24.12.2017 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the AO, Addl. CIT, Special Range-4, New Delhi (hereinafter referred to as the Ld. AO).
The assessee, Holtec Consulting Pvt. Ltd., is a company engaged in the business of providing multi-disciplinary engineering and management consulting services. For the Assessment Year 2015-16, the company filed its income tax return on 30th November 2015, declaring a total income of Rs. 27,52,74,780/-. The tax payable on this income, including interest, amounted to Rs. 9,36,71,906/-. Against this liability, the appellant claimed taxes withheld at source amounting to Rs. 3,68,19,390/-, advance tax paid of Rs. 5,30,00,000/-, and self-assessment tax paid of Rs. 38,58,221/-, leading to a claimed refund of Rs. 5,710/-.
During the scrutiny assessment, the Ld. AO assessed the income at Rs. 30,14,41,610/- after making the following disallowances:
As a result, the total income was assessed at Rs. 30,14,41,606/- and a demand of Rs. 1,27,40,620/- was raised.
The Ld. CIT(A) sustained the disallowance under Section 14A. The assessee then raised the following grounds of appeal:
The tribunal, considering similar facts in the assessee’s own case for AY 2014-15 (ITA No. 5891/Del/2018), found that the disallowance under Section 14A read with Rule 8D(2)(iii) should be restricted to investments yielding exempt income. The tribunal referred to its earlier orders for AY 2009-10, AY 2010-11, and AY 2011-12, where it held that:
The correct amount of disallowance, as submitted by the assessee, was calculated as follows:
Particulars | Details | Balance as on 31.03.2007 | Balance as on 31.03.2008 | Average |
---|---|---|---|---|
Total Investments (A) | 2,13,66,97,410 | 2,37,96,31,180 | 2,25,81,64,295 | |
Investment yielding no income (B) | 28,20,03,690 | 25,81,00,102 | 23,11,67,748 | |
Investment yielding exempt income (C = A – B) | 1,85,46,93,720 | 2,12,15,31,078 | 1,98,81,12,399 | |
Disallowance under Rule 8D(iii) (D = C * 0.5%) | 99,40,562 | |||
Less: Already disallowed by appellant (E) | 87,868 | |||
Net Disallowance under Rule 8D(iii) (F = D – E) | 98,52,694 |
The tribunal, following the rules of propriety and its own decisions in similar cases, allowed the appeal for statistical purposes. The Ld. AO was directed to decide the issue afresh in light of the tribunal’s decisions in the assessee’s own cases for earlier assessment years.
Order pronounced in the open court on 16/11/2022 by Anil Chaturvedi, Accountant Member, and Anubhav Sharma, Judicial Member.
Holtec Consulting Pvt. Ltd. vs Addl. CIT, Special Range-4: Appeal on Disallowance of Expenses
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