Principal Commissioner Ofincome Tax-1, Kolkata v. M/S. Asian Hotels East Ltd

OD-28 ITAT/174/2022IA No.GA/2/2022 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction [Income Tax]ORIGINAL SIDE PRINCIPAL COMMISSIONER OFINCOME TAX-1, KOLKATA -Versus- M/S. ASIAN HOTELS EAST LTD. Appearance:Mr. Soumen Bhattacharyya, Adv....for the appellant. Mr. J. P. Khaitan, Sr. Adv.Mr. Pratyush Jhunjhunwala, Adv.Mr. Mrigank Kejriwal, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 20[th] December, 2022. The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the ‘Act’ forbrevity) is directed against the order dated 10[th] June, 2020passed by the Income Tax Appellate Tribunal, “C” Bench, Kolkata(the Tribunal) in ITA No.114/Kol/2019 for the assessment year2012-13. The revenue has raised the following substantialquestions of law for consideration: (i)Whether the assessee was entitled to getdeduction under Section 35DD of the said Actor not ?deduction under Section 35DD of the said Actor not ?(ii)Whether the assessee was entitled to getdeduction in respect of the expenditureincurred by the assessee in relation to theincome which does not form part of the totalincome in terms of the Section 14A along withRule 8D of the said Act or not ?deduction in respect of the expenditureincurred by the assessee in relation to theincome which does not form part of the totalincome in terms of the Section 14A along withRule 8D of the said Act or not ? We have heard Mr. Soumen Bhattacharyya, learnedstanding counsel appearing for the appellant/revenue and Mr. J.P. Khaitan, learned senior counsel assisted by Mr. PratyushJhunjhnwala and Mr. Mrigank Kejriwal, learned Advocates for therespondent/assessee. So far as the first substantial question of law isconcerned, namely, with regard to the deduction under Section35DD, the learned Tribunal noted that for the assessment years2010-11 and 2011-12, the assessing officer himself had allowedthe deduction and this was taken note of apart from the factthat the deduction under Section 35DD is a continuing one andwhen the deduction was allowed in the earlier two assessmentyears, in absence of any fresh material, the Department couldnot have taken a different stand. Thus, we find that on facts,the learned tribunal had granted relief and no substantialquestion of law arises for consideration in this regard. So far as the second question is concerned, theCommissioner of Income Tax (Appeals) had directed the assessingofficer to restrict the disallowance under Rule 8D(2)(iii) byconsidering only those investments which have yielded tax-freeincome during the year. The learned Tribunal took note of thedecision of a co-ordinate Bench of the Tribunal in REI AgroLimited vs. DCIT in ITAT/1331/Kol/2011 which was affirmed bythis Court in ITAT/220/2013. Thus, we find that the legal position has been rightlynoted by the learned after considering the factual position.Therefore, the second question suggested by the revenue alsodoes not fall for consideration. Hence, the appeal filed by the revenue (ITAT/174/2022)fails and is dismissed. Consequently, the connected application for stay (IANo.GA/2/2022) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)