Case Number: ITA 5921/DEL/2019
Appellant: Addl. CIT, Special Range-3, New Delhi
Respondent: DCM Ltd., New Delhi
Assessment Year: 2016-17
Order Type: Final Tribunal Order
Date of Order: 2022-08-25
Pronounced On: 2022-08-25
Case Filed On: 2019-07-08
This appeal was filed by the Revenue against the order dated 25.04.2019 passed by the CIT(A)-34, New Delhi, for the assessment year 2016-17. The case was heard before the Delhi Bench ‘B’ of the Income Tax Appellate Tribunal (ITAT).
The hearing was conducted on 22.08.2022, with Shri V. P. Gupta and Shri Anunav Kumar representing the assessee, and Shri R. S. Yadav, Sr. D.R., representing the Revenue. The issues in this appeal covered various grounds, many of which had been addressed in previous assessment years.
The Tribunal observed that this issue had been addressed in the assessee’s favor in previous assessment years, particularly in A.Y. 2015-16. The CIT(A) had deleted the disallowance of Rs. 22,32,000/- made by the Assessing Officer (AO) on account of notional interest on interest-free advance given to DCM Employee Trust. The Tribunal upheld the CIT(A)’s decision, noting that the similar issue was decided in favor of the assessee in ITA No. 8137/Del/2018 for A.Y. 2015-16.
The Tribunal noted that this issue had been decided in favor of the assessee in earlier years. The CIT(A) had deleted the disallowance of Rs. 1,75,92,000/- made by the AO under Section 14A read with Rule 8D, as there was no exempt income during the year. The Tribunal upheld the CIT(A)’s decision, following the Delhi High Court’s decision in the case of Joint Investment Pvt. Ltd., which held that no disallowance under Section 14A can be made if no exempt income is earned during the relevant assessment year.
The Tribunal addressed the issue of adjustment in book profit on account of disallowance under Section 14A read with Rule 8D. The Tribunal noted that this issue had been consistently decided in favor of the assessee in earlier years, including A.Y. 2014-15 and A.Y. 2015-16. The Tribunal upheld the CIT(A)’s decision to delete the adjustment, reiterating that no disallowance is called for when there is no exempt income.
The Tribunal dismissed the appeal of the Revenue and upheld the decisions of the CIT(A) on all grounds.
Order: The appeal of the Revenue is dismissed.
Pronounced on: 25th August 2022
Accountant Member: Shamim Yahya
Judicial Member: Yogesh Kumar U.S.
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT ‘B’ Bench, Delhi
6. Guard File
Assistant Registrar, ITAT, Delhi
Addl. CIT vs DCM Ltd – Disallowance of Interest and Book Profit Adjustment
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