IN INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER (ITA No. 75/Chd/2016 (Assessment Year : 2011-12) M/s Orbit Resorts(P) Ltd., Vs. Addl.CIT, 256, Sector 9C, Range-I, Chandigarh. Chandigarh. PAN: AAACO4024H (Appellant) (Respondent Appellant by : Shri Vineet Krishan Respondent by : Shri Ravi Sarangal, CIT DR Date of hearing : 15.09.2016 Date of Pronouncement : 16.09.2016 ORDER PER DIVA SINGH, J.M. : present appeal has been filed by assessee assailing correctness of order dated 22.12.2015 pertaining to 2011-12 assessment year of learned Commissioner of Income Tax (Appeals)-1, Chandigarh on grounds of wrongly sustaining disallowance made by Assessing Officer under section 14A of Income Tax Act, 1961. 2. relevant facts of case are that in scrutiny assessment Assessing Officer required assessee to explain why disallowance under section 14A should not be made in view of fact that assessee had made investments in equity shares amounting to Rs.21.60 crores odd. assessee in reply on facts submitted that no interest bearing loan has been used for investment in funds. Various 2 decisions were relied upon. However, not convinced with explanation Assessing Officer proceeded to make disallowance under challenge. 3. In appeal before first appellate authority, submissions made before Assessing Officer were reiterated. On facts it was argued that assessee had sufficient own funds available as share capital of Rs.10.60 crores and Reserve and Surplus of Rs.765.79 crores. Further, no interest bearing loans it was pleaded had been used for investment. Reliance was placed upon CIT Vs. Hero Cycles, 323 ITR 518 (P&H); CIT Vs. Taikisha Engineering India Ltd. and CIT Vs. M/s Walfort Share & Stock Brokers (P) Limited, 326 ITR 1(SC). It was also submitted that no income has been earned from investment in year under consideration. Not convinced with explanation offered disallowance made was confirmed. As result thereof assessee is in appeal before I.T.A.T. 4. Both parties have been heard who reiterated their respective stands. learned CIT DR was required to address factual position consistently claimed that no exempt income has been earned by assessee in year under consideration. said claim it is found has not been disputed by Revenue. Considering decision of Hon'ble Delhi High Court in Cheminvest Ltd. Vs. CIT, 378 ITR 33 (Del) learned CIT DR was required to address issue. No contrary decision was 3 cited by Revenue. Nor any distinction on facts was argued. We find that Delhi High Court in aforesaid decision had held that : ".... expression 'does not form part of total income' in section 14A of envisages that there should be actual receipt of income, which is not includible in total income, during relevant previous year for purpose of disallowing any expenditure incurred in relation to said income. In other words, section 14A will not apply if no exempt income is received or receivable during relevant previous year." (emphasis provided) 4.1. We further find that Jurisdictional High Court in CIT Vs. Kapsons Associates, 381 ITR 204 (P&H) relying on order and judgment dated July 16, 2015 in I. T. A. No. 413 of 2014, Gurdas Garg v. CIT (Appeals) [2016] 6 ITR-OL 101 (P&H) also has held as under : "It is little difficult to understand these observations. It has not been denied that interest-free funds were available. Nor has it been denied that interest-free advances were made by appellant. In fact, latter has been accepted by Assessing Officer. contention that appellant has not established that it was interest-free funds that were actually advanced as interest-free advances is without substance. Money has no identity. So long it is established that interest-free advances are made by assessee who has adequate free reserves, it is sufficient to establish that amounts advanced interest-free cannot be added to assessee's income. It was not contended that interest-free advances exceeded interest-free funds available with appellant. Nor was it established that particular advance received was in turn advanced by assessee interest-free." 4.2 For sake of completeness we find that learned A.R. in facts of present case has placed reliance upon orders of Coordinate Benches in case of Wind World Wind Farms (India) Ltd. Vs. DCIT in ITA No.2712/Mum/2014 dated 8.2.2016 and Swami Automobiles Pvt. Ltd. Vs. JCIT in ITA No.74/Chd/2015 dated 10.2.2016 to canvass that issue is covered in its favour. In absence of any distinction on facts and 4 law, respectfully following decisions of Hon'ble Courts and orders of Co-ordinate Benches addition made by way of disallowance is deleted. said order was pronounced on date of hearing in presence of parties itself. 5. In result, appeal of assessee is allowed. Order pronounced in open court. Sd/- Sd/- (OM PRAKASH KANT) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 16 t h September, 2016 *Rati* Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar, ITAT, Chandigarh M/s Orbit Resorts (P) Ltd. v. Addl.CIT, Range-I, Chandigarh