Sartaj Hotels Apartments and Vilas Private Limited Vs. Income Tax Officer

Parties Involved

Facts Summary

The Assessee, Sartaj Hotels Apartments and Vilas Private Limited, filed a return of NIL income claiming a current year loss of Rs. 1,27,39,983/-. The assessment was completed under section 143(3) of the Income Tax Act, wherein the Assessing Officer disallowed an amount of Rs. 19,59,420/- under section 14A of the Act against the exempt interest expenses claimed by the Assessee amounting to Rs. 32,38,215/-. Aggrieved by the order of the Assessing Officer, the Assessee preferred an Appeal before the Commissioner of Income Tax (Appeals). The CIT(A) dismissed the Appeal filed by the Assessee. The Assessee then filed the present appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the addition of Rs. 19,59,420/- under section 14A of the Income Tax Act is justified.
• 2. Whether the Assessee had borrowed funds against which section 14A was invoked.
• 3. Whether the order passed by the CIT(A) was arbitrary and illegal for not giving further opportunity to the Assessee.
• 4. Whether section 14A is applicable given that no fresh investment was made in F.Y. 17-18.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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