True Value Homes (India) Pvt Ltd., CHENNAI V. DCIT Corporate Circle 3(1), CHENNAI

CO 181/CHNY/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3920 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-04-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G BASKAR; SUSHMA HARINI
• Assessee Lawyers: MRS S VIJAYAPRABHAJCITD R
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . , ! '#$ % , BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A.NO.2404/CHNY/2017 & C.O. NO.181/CHNY/2017 ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), NEW BLOCK, 4 TH FLOOR, CHENNAI 600 034. VS. M/S.TRUE VALUE HOMES (INDIA) PVT. LTD ., TVH TRIVENI, NO.21,C.V.RAMAN ROAD, ALWARPET, CHENNAI 600 018. [PAN AAACT 7955 Q ] (APPELLANT) (RESPONDENT / CROSS OBJECTOR) / APPELLANT BY : MRS.S.VIJAYAPRABHA,JCIT,D.R /RESPONDENT BY : MS.SUSHMA HARINI, ADVOCATE & MR.G.BASKAR,ADVOCATE / DATE OF HEARING : 04 - 0 7 - 201 8 !'# / DATE OF PRONOUNCEMENT : 04 - 0 7 - 201 8 & / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER ITA NO.2404/CHNY/2017 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI IN ITA NO.178/2015-16 DATED 06.06.2017 FOR THE AY 2012-13 ITA NO.2404/CHNY/2017 CO NO.181/CHNY/2017 :- 2 -: AND C.O NO.181/CHNY/2017 IS A CROSS-OBJECTION FILED BY THE ASSESSEE IN ITA NO.2404/CHNY/2017. 2. MRS.S.VIJAYAPRABHA REPRESENTED ON BEHALF OF THE REVENUE AND MS.SUSHMA HARINI AND MR.G.BASKAR REPRESENTED ON BEH ALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY LD.D.R THAT IN THE COURSE O F ASSESSMENT, IT IS NOTICED BY LD. ASSESSING OFFICER THAT THE ASSESSEE HAD INVESTMENTS TO AN EXTENT OF ` 90.87 CRORES OF WHICH SUBSTANTIAL PORTION WAS IN TH E SUBSIDIARY OF THE ASSESSEES GROUP COMPANIES. CONSE QUENTLY, THE LD. ASSESSING OFFICER HAD BY INVOKING THE PROVISIONS OF THE SECTION 14A OF THE INCOME TAX ACT, 1961 AND APPLYING THE PROVISION S OF THE RULE-8D OF INCOME TAX RULES, 1962, MADE DISALLOWANCE TO AN EXTENT OF ` 3,52,73,743/-. IT WAS A SUBMISSION THAT LD.CIT(A) HAD RESTORED THE ISSUE TO THE FILE OF LD. ASSESSING OFFICER FOR VERI FICATION AS TO WHETHER THE ASSESSEE RECEIVED ANY EXEMPT INCOME DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2012-13. IT WAS A SUBMI SSION THAT WHETHER THERE IS EXEMPT INCOME EARNED BY THE ASSESS EE, OR NOT, THE PROVISIONS OF THE SECTION 14A OF THE ACT WAS LIABLE TO BE APPLIED. 4. IN REPLY, LD.A.R DREW OUR ATTENTION TO PAGE NO. 33 OF THE PAPER BOOK, WHICH IS THE COPY OF P&L A/C AND AT PAG E NO.34 OF PAPER ITA NO.2404/CHNY/2017 CO NO.181/CHNY/2017 :- 3 -: BOOK, WHICH IS THE COPY OF CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2012. IT WAS SUBMITTED BY LD.A.R THAT CLEARLY THERE WAS NO DIVIDEND INCOME RECEIVED BY THE ASSESSEE. LD.A.R A LSO BROUGHT TO OUR NOTICE THE NOTES TO FINANCIAL STATEMENT OF THE C OMPANY FOR THE YEAR ENDED 31.03.2012 TO STATE THAT NO DIVIDEND INCOME O R EXEMPT INCOME HAS BEEN RECEIVED BY THE ASSESSEE. IT WAS THE PRAY ER THAT IN VIEW OF THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CA SE OF M/S.REDINGTON INDIA LTD. VS. ADDL. CIT REPORTED IN 392 1TR 633(MAD.), AS THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME DURING THE YEAR OUT OF THE INVESTMENTS, NO DISALLOWANCE IS CALLED FOR. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE PROFIT AND LOSS ACCOUNT AND CASH FLOW STATEMENT OF THE ASSESSEE FOR THE YEAR ENDED 31.03.2012 OF THE ASSESSEE CLEARLY S HOWS THAT ASSESSEE HAS NOT RECEIVED ANY EXEMPT INCOME DURING THE YEAR, OUT OF THE INVESTMENTS. A PERUSAL OF THE PROVISIONS OF THE SEC TION 14A CLEARLY SHOWS THAT THE WORDS USE THEREIN ARE INCOME DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT . THE ASSESSEE HAS NOT EARNED ANY INCOME, WHICH DOES NOT FORM PART OF THE TOTAL INCOM E UNDER SECTION 14A OF THE INCOME TAX ACT, 1961. THIS BEING SO, RE SPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS H IGH COURTS DECISION IN THE CASE OF M/S.REDINGTON INDIA LTD., REFERRED T O SUPRA, THE ADDITION ITA NO.2404/CHNY/2017 CO NO.181/CHNY/2017 :- 4 -: MADE BY THE LD. ASSESSING OFFICER ON THIS ISSUE IS NOT LIABLE TO BE MADE. CONSEQUENTLY, THE APPEAL OF THE REVENUE IS DI SMISSED. 6. AS THE CROSS-OBJECTIONS ARE IN SUPPORT OF THE O RDER OF THE LD.CIT(A), AND WE HAVE ALREADY DELETED THE ADDITION MADE BY LD. ASSESSING OFFICER IN REVENUES APPEAL, THE CROSS-OB JECTIONS FILED BY THE ASSESSEE STANDS DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS- OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSI ON OF HEARING ON 04TH JULY, 2018, AT CHENNAI. SD/ - SD/ - ( $% . '(') ) ( ABRAHAM P GEORGE) ! / ACCOUNTANT MEMBER ( % ) (GEORGE MATHAN) ' ! / JUDICIAL MEMBER + / CHENNAI ,- / DATED: 04 TH JULY, 2018. K S SUNDARAM . / 01 2 1' / COPY TO: 1 . / APPELLANT 3. . . 3 () / CIT(A) 5. 156 78 / DR 2. / RESPONDENT 4. . . 3 / CIT 6. 69) : / GF