M/s. Janta Travels (P) Ltd., New Delhi V. ITO, New Delhi

CO 234/DEL/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4106 (ITAT-DELHI)
• Duration Of Justice: 11 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 12-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ABHIJIT ROY
• Keywords: Tax effect; Rule 8D
• Section: 14A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER ITA NO.:- 113/DEL/2015 ASSESSMENT YEAR: 2010-11 ITO WARD-13(2) NEW DELHI. VS. JANTA TRAVELS (P) LTD. H-8-9, CONNAUGHT PLACE NEW DELHI PAN AAACJ0206E (APPELLANT) (RESPONDENT) CO NO.:- 234/DEL/2015 ASSESSMENT YEAR: 2010-11 JANTA TRAVELS (P) LTD. H-8-9 CONNAUGHT CIRCUS NEW DELHI 110 001. PAN AAACJ0206E VS. ITO WARD-13(2), ROOM NO. 324, C.R. BUILDING, NEW DELHI. (APPELLANT) (RESPONDENT) D EPARTMENT BY : SHRI SANDEEP KUMAR MISHRA, SR. DR ASSESSEE BY : SHRI ABHIJIT ROY, FCA DATE OF HEARING 12 /07/2016 DATE OF PRONOUNCEMENT 14 /07/2016 ITA NO. 113/DEL/2015 & CO NO. 234/DEL-2015 2 O R D E R THIS IS AN APPEAL FILED BY THE REVENUE. ADMITTEDL Y THE TAX EFFECT IN THIS APPEAL BY THE REVENUE IS LESS THAN RS.10 LA KHS. 1.1. IN TERMS OF CBDT CIRCULAR NO.21/2015 DATED 10 TH DECEMBER,2015, F.NO. 279/MISC./142/2007-ITJ(PT.) READ WITH S.268 A OF THE INCOME TAX ACT 1961, THIS APPEAL BY THE REVENUE SHOULD HAVE BE EN WITHDRAWN OR SHOULD NOT HAVE BEEN PRESSED BY THE REVENUE. 2. IN VIEW OF THE ABOVE THIS APPEAL BY THE REVENUE IS DISMISSED IN LIMINE. CO NO. 234/DEL/15 3. NOW COMING TO THE CO FILED BY THE ASSESEE IS CONCER NED I NOTED THAT THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANCE U/S 49 RULE 8D OUT OF THE DISALLOWANCE AMOUNTING TO RS. 78,628/- OUT OF T HE DISALLOWANCE MADE BY THE AO AT RS. 19,35,470/-. I NOTED THAT THE SAID DISALLOWANCE HAS BEEN SUSTAINED BY THE LD. CIT(A) BY TAKING THE HALF PERCENTAGE OF THE AVERAGE VALUE OF THE INVESTMENT AMOUNTING TO RS . 1,05,59,783/-. LD. DR BEFORE ME VEHEMENTLY CONTENDED THAT IN VIEW OF T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MAXOPP INV ESTMENT LTD. VS. CIT (2012) 247 CTR (DELHI) 162 AND THAT OF MUMBAI BENCH IN THE CASE OF RAINY INVESTMENT PVT. LTD. VS. ACIT ITA NO. 5491/ MUM/2011 AND THE ITA NO. 113/DEL/2015 & CO NO. 234/DEL-2015 3 SAID DECISIONS OF THIS TRIBUNAL AS WELL AS THE CHEN NAI BENCH OF THE TRIBUNAL THE SHARE APPLICATION MONEY CAN NOT BE REG ARDED AS AN INVESTMENT IN SHARES OR AN ASSET YIELDING TAX FREE INCOME AND NEITHER IT IS CAPABLE OF YIELDING ANY TAX FREE INCOME. THEREFO RE IT CANNOT BE TREATED AS PART OF THE TOTAL ASSETS FOR COMPUTING D ISALLOWANCE U/S 14A . I NOTED FROM THE ORDER OF THE LD. CIT(A) PAGE 7 THA T THE CIT(A) WHILE COMPUTING THE AVERAGE VALUE OF THE INVESTMENT AT RS . 1,05,59,783/- UNDER RULE 8D UNDER CLAUSE B HAS ALREADY REDUCED OU T OF THE TOTAL INVESTMENT OF RS. 24,10,08,238/- SHARE APPLICATION MONEY AMOUNTING TO RS. 23,02,33,300/-. IN VIEW OF THIS FACTS THE GROUN D TAKEN BY THE ASSESSEE DOES NOT HAVE ANY LEG TO STAND. I THEREFO RE DISMISS THE GROUND TAKEN BY THE ASSESSEE. 4. IN THE RESULT THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/07/2016 . SD/- (P.K. BANSAL) ACCOUNTANT MEMBER DATED: 14/07/2016 *VEENA * COPY FORWARDED TO ITA NO. 113/DEL/2015 & CO NO. 234/DEL-2015 4 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI