ITA 720 to 722 of 2016 Phoenix Infratech India P Ltd Hyderabad IN INCOME TAX APPELLATE TRIBUNAL Hyderabad B Bench, Hyderabad Before Smt. P. Madhavi Devi, Judicial Member AND Shri B. Ramakotaiah, Accountant Member ITA No.720 to 722/Hyd/2016 (Assessment Years: 2010-11 to 2012-13) Income Tax Officer Vs M/s Phoenix Infratech India Ward 16(2) Hyderabad Private Limited Hyderabad PAN: AACCC 2322 G For Revenue: Smt. U. Minichandran, DR For Assessee: Shri P. Murali Mohan Rao Date of Hearing: 21.09.2016 Date of Pronouncement: 28.09.2016 ORDER Per Smt. P. Madhavi Devi, J.M. All these appeals are filed by Revenue for A.Ys 2010-11, 2011-12 and 2012-13 respectively. In these appeals, common ground raised by Revenue is that learned CIT (A) has erred in deleting addition made by AO on account of disallowance u/s 14A of I.T. Act. 2. Brief facts of case are that assessee company, engaged in business of infrastructure development, filed its return of income for relevant A.Ys. During assessment proceedings u/s 143(3) of Act, AO noticed that assessee has made investments in several group companies by acquiring shares and no dividend income was shown from said companies during relevant financial year. He also Page 1 of 3 ITA 720 to 722 of 2016 Phoenix Infratech India P Ltd Hyderabad observed that assessee has borrowed funds from different banks and others on which assessee paid interest and claimed same as deduction. He observed that as per provisions of section 14A of Act, when any expenditure is found to have been claimed as deduction under any of heads of income in relation to income which does not form part of total income under I.T. Act, it will fall in consideration zone of section 14A of Act for disallowance. He therefore, invoked provisions of section 14A of Act and applied provisions of Rule 8D and made disallowance u/s 14A for all A.Ys. 3. Aggrieved, assessee preferred appeals before CIT (A) who deleted same by observing that assessee has not claimed any exempt income during relevant A.Ys. CIT (A) has followed various decisions of Coordinate Benches of this Tribunal and also of Hon'ble Delhi High Court in case of M/s ACB India Ltd vs. ACIT (2015) 62 Taxmann.com 71 (Delhi) to delete disallowance made by AO. Aggrieved by relief granted by CIT (A), Revenue is in appeal before us. 4. learned DR relied upon orders of AO, while learned Counsel for assessee has relied upon decisions of Coordinate Bench of this Tribunal and also of Hon'ble Delhi High Court in case of M/s ACB India Ltd (Supra). 5. Having regard to rival contentions and material on record, we find that during relevant A.Ys, admittedly assessee has not claimed any income as exempt from tax. Page 2 of 3 ITA 720 to 722 of 2016 Phoenix Infratech India P Ltd Hyderabad provisions of section 14A would apply only where assessee claims any income as exempt from tax and expenditure in relation to such exempt income cannot be allowed u/s 14A of Act. As assessee has not claimed any income to be exempt as clearly recorded by AO in assessment orders, no disallowance u/s 14A r.w.Rule 8D can be made. This proposition has been upheld by various Benches of this Tribunal and also by Hon'ble Delhi High Court in case of Cheminvest Ltd vs. CIT in ITA No.749/2014 dated 2.9.2015 and also in case of M/s. ACB India Ltd (Cited Supra). In view of same, we do not see any reason to interfere with order of CIT (A). Revenue s appeals are accordingly dismissed. 6. In result, Revenue s appeals are dismissed. Order pronounced in Open Court on 28th September, 2016. Sd/- Sd/- (B. Ramakotaiah) (P. Madhavi Devi) Accountant Member Judicial Member Hyderabad, dated 28th September, 2016. Vinodan/sps Copy to: 1 Income Tax Officer Ward 16(2) Room No.5, Block-B, 7th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad 500004 2 M/s. Phoenix Infratech (India) Pvt. Ltd, Plot No.1335, Phoenix House, Road No.45, Jubilee Hills, Hyderabad 3 CIT (A)-4 Hyderabad 4 Pr.CIT 4 Hyderabad 5 DR, ITAT Hyderabad 6 Guard File By Order Page 3 of 3 Income-tax Officer, Ward 16(2), Hyderabad v. M/s Phoenix Infratech India Private Limited