THE PR. COMMISSIONER OF INCOME TAX CENTRAL-3 v. CELLCAP INVOFIN INDIA PVT. LTD - 2015-LL-1030-4

Citation	2015-LL-1030-4
Appellant Name	THE PR. COMMISSIONER OF INCOME TAX CENTRAL-3
Respondent Name	CELLCAP INVOFIN INDIA PVT. LTD.
Court	HIGH COURT OF DELHI AT NEW DELHI
Relevant Act	Income-tax
Date of Order	30/10/2015
Assessment Year	2009-10
Judgment	View Judgment
Keyword Tags	non-banking finance companies • expenditure on exempt income • penlaty for concealment of income
Bot Summary:	These two appeals by the Revenue under Section 260A of the Income Tax Act, 1961 are directed against a common order dated 17th April 2015 passed by the Income Tax Appellate Tribunal in ITA Nos. In the return of income both Assessees had shown dividend income and claimed that 1 of the expenses had been incurred as administrative and statutory expenses and should not be disallowed for the purposes of Section 14A of the Income Tax Act, 1961 read with Rule 8-D of the Income Tax Rules, 1962. The Assessing Officer formed an opinion that the Assessees had not furnished the correct particulars of income and proceeded to levy a penalty under Section 271 of the Act. The Commissioner of Income Tax CIT deleted the penalty levied by the AO and the Revenue went in appeal before the ITAT. The ground on which the ITAT ITA Nos. 819 823 of 2015 Page 2 of 3 dismissed the Revenue s appeal was that nowhere in the assessment order or in the penalty order did the AO record that the Assessees claims were false. It was noted that the Rule 8D of the Rules would come into play only when the AO records a finding that, having regard to the accounts of the Assessee, he was not satisfied with the correctness of the claims of the Assessee in respect of the expenditure in relation to income which does not form part of the total income. Having heard learned counsel for the Revenue and having considered the orders of the CIT as well as the ITAT, the Court finds that both decisions are based on the correct understanding of the legal position and that in the facts of the present case, no substantial question of law arises for determination.

$ * IN HIGH COURT OF DELHI AT NEW DELHI 12. + ITA 819/2015 PR. COMMISSIONER OF INCOME TAX CENTRAL-3 ..... Appellant Through: Mr. Rahul Chaudhary and Mr. Ruchir Bhatia, Advocates. versus CELLCAP INVOFIN INDIA PVT. LTD. ..... Respondent Through: Ms. Kavita Jha and Ms. Roopali Gupta, Advocates. AND 16. + ITA 823/2015 PR. COMMISSIONER OF INCOME TAX CENTRAL -3 ..... Appellant Through: Mr. Rahul Chaudhary and Mr. Ruchir Bhatia, Advocates. versus CELLPHONE CREDITS & CREDITS SECURITIES PVT. LTD. ..... Respondent Through: Ms. Kavita Jha and Ms. Roopali Gupta, Advocates. CORAM: JUSTICE S. MURALIDHAR JUSTICE VIBHU BAKHRU ORDER % 30.10.2015 CM No. 24906 of 2015(exemption) in ITA No. 823 of 2015 ITA Nos. 819 & 823 of 2015 Page 1 of 3 1. Exemptions allowed subject to all just exceptions. 2. application is disposed of. ITA Nos. 819 of 2015 & 823 of 2015 3. These two appeals by Revenue under Section 260A of Income Tax Act, 1961 ( Act ) are directed against common order dated 17th April 2015 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA Nos. 4364 and 4365/Del/2013 for Assessment Year ( AY ) 2009-10. 4. Both Assessees are non-banking finance companies. In return of income both Assessees had shown dividend income and claimed that 1% of expenses had been incurred as administrative and statutory expenses and, therefore, should not be disallowed for purposes of Section 14A of Income Tax Act, 1961 ( Act ) read with Rule 8-D of Income Tax Rules, 1962 ( Rules ). 5. Assessing Officer ( AO ) formed opinion that Assessees had not furnished correct particulars of income and proceeded to levy penalty under Section 271 (1) (c) of Act. Commissioner of Income Tax (Appeals) [ CIT (A) ] deleted penalty levied by AO and Revenue went in appeal before ITAT. ground on which ITAT ITA Nos. 819 & 823 of 2015 Page 2 of 3 dismissed Revenue s appeal was that nowhere in assessment order or in penalty order did AO record that Assessees claims were false. It was noted that Rule 8D of Rules would come into play only when AO records finding that, having regard to accounts of Assessee, he was not satisfied with correctness of claims of Assessee in respect of expenditure in relation to income which does not form part of total income. Reliance was placed by ITAT on decision of Supreme Court in CIT v. Reliance Petro Products Pvt. Ltd. [2010] 189 Taxman 322. 6. Having heard learned counsel for Revenue and having considered orders of CIT (A) as well as ITAT, Court finds that both decisions are based on correct understanding of legal position and that in facts of present case, no substantial question of law arises for determination. appeals are dismissed. S. MURALIDHAR, J VIBHU BAKHRU, J OCTOBER 30, 2015/dn ITA Nos. 819 & 823 of 2015 Page 3 of 3 PR. COMMISSIONER OF INCOME TAX CENTRAL-3 v. CELLCAP INVOFIN INDIA PVT. LTD

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