Adani Properties Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1), Ahmedabad

CO 47/AHD/2014

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2430 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Assessee Lawyers: P M MEHTA
• Keywords: Audit objection; Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2455/AHD/2013 & CO NO.47/AHD/2014 / ASSESSMENT YEAR : 2009-10 ITO, WARD 1 (1), AHMEDABAD VS M/S. ADANI PROPERTIES PVT LTD 8 TH FLOOR, SHIKHAR, NR. MITHAKHALI SIX ROAD, NAVRANGPURA, AHMEDABAD PAN: AABCA 3182 H / (APPELLANT) / (RESPONDENT) & CROSS-OBJECTOR REVENUE BY : SHRI VIMAL I. MEHTA, SR DR ASSESSEE BY : SHRI P.M. MEHTA, AR / DATE OF HEARING : 21/11/2016 / DATE OF PRONOUNCEMENT: 21/11/2016 / O R D E R THIS APPEAL BY THE REVENUE AND THE CROSS-OBJECTION THEREOF FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME- TAX (APPEALS)-VI, AHMEDABAD DATED 27.08.2013 FOR AY 2009-10. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL:- 1) THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE DISALLOWANCE U/S 14A R.W.S. 8D TO THE EXTENT OF RS.15,69 LACS DESPIT E THE FACT THAT THE ASSESSEE HAD MADE FRESH INVESTMENT OF RS.84.19 CROR ES DURING THE YEAR IN PARTNERSHIP FIRMS AND HAD EARNED 3/4 TH OF REVENUES IN THE FORM OF EXEMPT INCOME U/S 10(2A). THE AO HAD NOT TREATED ANY EXPE NDITURE AS DIRECTLY RELATED TO EARNING EXEMPT INCOME UNDER RULE 8D(2)(I ), BUT ONLY PARTLY DISALLOWED THE SAME UNDER RULE 8D(2)(II)(III). 2) THE CIT(A) HAS OVERLOOKED THE FACT THAT THE ASSESSE E HAD NOT MAINTAINED SEPARATE ACCOUNTS FOR EXEMPT INCOME EARNED FROM PAR TNERSHIP FIRMS (RS.2.21 CRORES) AND TAXABLE INCOME EARNED FROM REN T (RS.78.06 LACS). THE AO HAD RECORDED CLEAR FINDINGS REGARDING APPLICABIL ITY OF SECTION 14A TO THE FACTS OF THE CASE WHICH IS IN LINE WITH THE PRO VISIONS OF SECTION 14A(2)/(3). 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT HE IS NOT PRESSING THE CROSS-OBJECTION; HENCE THE CROSS-OBJEC TION FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. ITA NO. 2455/AHD/2013 & CO NO.47/AHD/2014 ITO VS. ADANI PROPERTIES PVT LTD AY : 2009-10 2 4. WITH RESPECT TO REVENUES PRESENT APPEAL, THE LD . AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE SAME NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO.21 O F 2015 DATED 10.12.2015. HE HAS ALSO SUBMITTED THAT IN THE PRESENT CASE THE TAX EFFECT IS RS.4,85,120/- WHICH IS BELOW THE PRESCRIBED LIMIT OF RS.10 LACS A ND HE HAS PLACED ON RECORD THE WORKING FOR THE SAME. THE LD. DEPARTMEN TAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN TH E LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 5. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. I FIND THAT PRIMA-FACIE THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN V IEW OF CBDT CIRCULAR NO. 21/2015 IN F.NO.279/MISC. 142/2007-ITJ (PT) DATED 1 0TH DECEMBER 2015, VIDE WHICH IT HAS BEEN PROVIDED THAT IF THE TAX EFF ECT BY VIRTUE OF THE COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER IS BEL OW RS. 10 LACS, THEN THAT ORDER WOULD NOT BE CHALLENGED BEFORE THE TRIBU NAL IN FURTHER APPEAL. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTIONS WILL N OT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUASHED BY IMPUGNED ORDER O R ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS, ETC. I FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX IS LESS THAN RS.10 LACS. THEREFORE, THE PRESENT APPEAL IS NOT MAINTAINABLE AND HENCE DISMIS SED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS-OBJECTION OF THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 21 ST NOVEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 21/11/2016 *BIJU T., SR. PS ITA NO. 2455/AHD/2013 & CO NO.47/AHD/2014 ITO VS. ADANI PROPERTIES PVT LTD AY : 2009-10 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD