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of <h1>Tribunal dismisses Revenue appeals on disallowance under Income Tax Act for AY 2012-13 and 2013-14.</h1> <h3>The ACIT Morbi Circle, Morbi Versus M/s. Spectrum Johnson Tiles Pvt. Ltd.</h3> The ACIT Morbi Circle, Morbi Versus M/s. Spectrum Johnson Tiles Pvt. Ltd. - TMI Issues:- Disallowance under section 14A of the Income Tax Act for AY 2012-13- Disallowance under section 14A of the Income Tax Act for AY 2013-14- Disallowance of employee's contribution towards provident fund under section 36(1)(va) for AY 2012-13Issue 1: Disallowance under section 14A of the Income Tax Act for AY 2012-13:The Revenue appealed against the CIT(A)'s order deleting the disallowance of Rs. 17,66,181 made under section 14A. The AO had disallowed the amount based on the investment in a subsidiary company capable of yielding dividend income, even though no dividend income was earned during the year. The CIT(A) ruled in favor of the assessee, stating that section 14A does not apply when there is no exempt income and no claim of exemption has been made. The Tribunal concurred with the CIT(A), emphasizing that Rule 8D is a computational provision and does not override the main provisions of the Act. As there was no exempt income received or receivable during the relevant financial year, the disallowance made by the AO was deemed unsustainable, leading to the dismissal of the Revenue's appeal.Issue 2: Disallowance under section 14A of the Income Tax Act for AY 2013-14:The Revenue's appeal for AY 2013-14 mirrored the issues raised for AY 2012-13, challenging the deletion of a disallowance of Rs. 13,83,476 under section 14A. The Tribunal dismissed the appeal for AY 2013-14 on the same grounds as AY 2012-13, as the facts and issues were identical, thus upholding the CIT(A)'s decision.Issue 3: Disallowance of employee's contribution towards provident fund under section 36(1)(va) for AY 2012-13:The assessee filed a Cross Objection against the disallowance of Rs. 76,500 made by the AO towards employee's contribution to provident fund, which was upheld by the CIT(A). The Tribunal declined to interfere with the CIT(A)'s decision due to the absence of particulars regarding delayed payment, leading to the dismissal of both the Revenue's appeals and the Assessee's Cross Objection.In conclusion, the Tribunal upheld the CIT(A)'s decisions in all aspects, dismissing the Revenue's appeals and the Assessee's Cross Objection for the relevant assessment years.
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