Agile Electric Sub Assembly Pvt Ltd. , CHENNAI V. DCIT Corporate Circle 1(1) , CHENNAI

CO 138/CHNY/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3353 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T BANUSEKAR
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1840/MDS/2017 & C.O. NO.138/MDS/2017 ' (' / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CHENNAI - 600 034. V. M/S AGILE ELECTRIC SUB ASSEMBLY PVT. LTD., A-33, A34 & A36, PHASE-I, MEPZ-SEZ, TAMBARAM, CHENNAI - 600 045. PAN : AABCI 3929 CJ (*+/ APPELLANT) ( RESPONDENT & CROSS OBJECTOR) *+ , - / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ./*+ , - / RESPONDENT BY : SH. T. BANUSEKAR, CA 0 , 1$ / DATE OF HEARING : 21.12.2017 2!( , 1$ / DATE OF PRONOUNCEMENT : 28.12.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNAI, DATED 23.05.2017 AND PERTAINS TO ASSESSMENT YEAR 20 12-13. THE ASSESSEE HAS FILED A CROSS-OBJECTION AGAINST THE VE RY SAME ORDER OF 2 I.T.A. NO.1840/MDS/17 C.O. NO.138/MDS/17 THE PR. CIT(APPEALS). SINCE COMMON ISSUE ARISES FO R CONSIDERATION IN BOTH THE APPEAL AND THE CROSS-OBJECTION, WE HEAR D THE SAME TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2. SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R DISALLOWED THE EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING EX EMPTED INCOME BY APPLYING RULE 8D(2) OF THE INCOME-TAX RULES, 196 2. HOWEVER, THE PR. CIT(APPEALS) FOUND THAT THE ASSESSEE HAS NO T EARNED ANY INCOME. THEREFORE, ACCORDING TO THE LD. D.R., THER E CANNOT BE ANY DISALLOWANCE UNDER SECTION 14A OF THE INCOME-TAX AC T, 1961 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. D.R., RULE 8D(2) VERY CLEARLY SAYS THAT IRRESPECTIVE OF THE FACT WHETHER ASSESSEE HAS EARNED ANY EXEMPTED INCOME OR NOT, THE EXPENDITURE INCURRED FO R EARNING EXEMPTED INCOME HAS TO BE DISALLOWED. ACCORDING TO THE LD. D.R., RULE 8D(2) PROVIDES METHOD FOR DISALLOWANCE IN CASE THE ASSESSING OFFICER IS NOT SATISFIED WITH THE COMPUTATION MADE BY THE ASSESSEE, THEREFORE, THE PR.CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SH. T. BANUSEKAR, THE LD. REPRE SENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE PR. CIT(APPEALS) B Y PLACING 3 I.T.A. NO.1840/MDS/17 C.O. NO.138/MDS/17 RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN RE DINGTON (INDIA) LTD. V. ADDL. CIT (2017) TMI 318 FOUND THAT WHEN TH ERE WAS NO DIVIDEND INCOME, THERE CANNOT BE ANY DISALLOWANCE U NDER SECTION 14A OF THE ACT. IN THIS CASE, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE HAS NOT EARNED ANY INCOME, THEREFORE, THE PR. CIT(APPEALS) HAS RIGHTLY FOLLOWED THE JUDGMENT OF M ADRAS HIGH COURT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS EARNED ANY EXE MPTED INCOME. WHEN THE ASSESSEE HAS NOT EARNED EXEMPTED INCOME, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CA NNOT BE ANY DISALLOWANCE OF EXPENDITURE IN VIEW OF THE JUDGMENT OF MADRAS HIGH COURT IN REDINGTON (INDIA) LTD. (SUPRA). THEREFORE , WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD. DEPARTMENTAL REPRE SENTATIVE. THE PR. CIT(APPEALS) HAS RIGHTLY FOLLOWED THE JUDGMENT OF MADRAS HIGH COURT IN REDINGTON (INDIA) LTD. (SUPRA). THEREFORE , THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4 I.T.A. NO.1840/MDS/17 C.O. NO.138/MDS/17 5. SINCE THE ISSUE OF DISALLOWANCE UNDER SECTION 14 A OF THE ACT RAISED BY THE REVENUE IN THE APPEAL STANDS DISMISSE D, THE CROSS- OBJECTION FILED BY THE ASSESSEE ALSO STANDS DISMISS ED AS INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS- OBJECTION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED ON 28 TH DECEMBER, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 28 TH DECEMBER, 2017. KRI. , .156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. PRINCIPAL CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 68 .1 /DR 6. 9' : /GF.