Principal Commissioner of Income Tax, Central-3, Delhi v. M/S Anant Overseas Pvt. Ltd

RAJIV SHAKDHER, J. (ORAL): CM Nos.24780-81/2023 in ITA 273/2023 CM Nos.24782-83/2023 in ITA 274/2023

¶1The above-captioned applications, which are four in number, concern

the delay in filing and re-filing the appeals.

¶2In CM No.24780/2023 and CM No.24781/2023 preferred in ITA No.273/2023, it is indicated that there is a delay of 10 days in filing and 35 days in re-filing the appeal respectively.

2.1 Likewise, in CM No.24782/2023 and CM No.24783/2023 preferred in ITA No.274/2023, it is averred that there is a delay of 10 days in filing and 5 days in re-filing the appeal respectively.

¶3Having regard to the period of delay involved both in filing and re-filing the appeals, we are inclined to condone the delay.

3.1 It is ordered accordingly.

¶4The above-captioned applications are, accordingly, disposed of. ITA 273/2023 ITA 274/2023

¶5These appeals concern Assessment Year (AY) 2012-13.

¶6The appellant assails the order dated 31.08.2022 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].

¶7The Tribunal via the impugned order disposed of the revenue's appeal and the assessee's cross-objections against the order of the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"] dated 29.08.2017.

¶8The record shows, that the assessee, being aggrieved by the assessment order dated 29.02.2016 had preferred the appeal with the CIT(A).

¶9A perusal of the assessment order shows, that the assessee had earned dividend income amounting to Rs.4,06,63,807/-.

9.1 This dividend income was received from Uflex Ltd. [erstwhile Flex

Industries Ltd.].

¶10According to the assessee, Uflex Ltd. is the promotee company, and

99.88% of the dividend income has been received from the said entity.

¶11The Assessing Officer (AO), according to Mr Abhishek Maratha, learned senior standing counsel, who appears on behalf of the appellant/revenue, had disallowed expenses amounting to Rs.7,75,24,213/-.

¶12The CIT(A) had set aside the disallowance.The Tribunal has deleted the disallowance amounting to Rs.3,68,60,405/- which is, in fact, the difference between the disallowed income i.e., Rs.7,75,24,213/- and the dividend income earned by the assessee i.e., Rs.4,06,63,808/-.

¶13The rationale, apparently, employed by the Tribunal, which is not disputed by Mr Maratha, is that disallowance cannot exceed the exempt income by way of dividend earned by the assessee.

¶14Mr Maratha says, that the Tribunal has remitted the matter to the CIT(A) with regard to the aspect concerning the amounts said to have been earned as dividend by the assessee.

¶15As to the principle which the Tribunal has adopted i.e., that disallowance under Section 14A cannot exceed the exempt income, we find that there is no error in the same, as there is good authority for that approach. [See:Joint Investments Pvt. Ltd. v. CIT [372 ITR 694].

¶16Insofar as the other aspects are concerned, the matter, as indicated by the Tribunal, can be examined by the CIT(A).

16.1 In case there is a variation in the quantum of dividend income said to have been earned by the assessee, appropriate orders can be passed, with regard to the disallowance that requires to be deleted.

¶17Given this position, we are not inclined to interdict the order passed by the Tribunal.

¶18The above-captioned appeals are closed in the aforesaid terms.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 12, 2023/aj

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* IN THE HIGH COURT OF DELHI AT NEW DELHI % Decision delivered on: 12.05.2023 + ITA 273/2023 &CM Nos.24780-81/2023 PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI ..... Appellant Through: Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Jr Standing Counsel. versus M/S ANANT OVERSEAS PVT LTD ..... Respondent Through: None. + ITA 274/2023 & CM Nos.24782-83/2023 PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI ..... Appellant Through: Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Jr Standing Counsel. versus M/S ANANT OVERSEAS PVT. LTD. ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE RAJIV SHAKDHER HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)]