Savorit Limited, CHENNAI V. ACIT Corporate Circle 6(1), CHENNAI

CO 71/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9557 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR IRS
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Earning of tax free income; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.1211/CHNY/2019 & C.O.NO.71/CHNY/2019 (IN ITA NO.1211/CHNY/2019) ! ' / ASSESSMENT YEAR : 2010-2011 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1) CHENNAI. VS. M/S. SAVORIT LIMITED, NEW NO.31, 1 ST FLOOR, LAZARUS CHURCH ROAD, (ABOVE ANDHRA BANK) R.A. PURAM, CHENNAI 600 028. [PAN AAACS 9903R] ( / APPELLANT) (RESPONDENT/ CROSS OBJECTOR) DEPARTMENT BY : SHRI. R. CLEMENT RAMESH KUMAR, IRS, ADDL. CIT ASSESSEE BY : MS. S. SRINIRANJANI, ADVOCATE # $ % & /DATE OF HEARING : 08-08-2019 '('! % & /DATE OF PRONOUNCEMENT : 23-09-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AND THE CR OSS OBJECTION (CO) FILED BY THE ASSESSEE-COMPANY DIRECT ED AGAINST THE ITA NO.1211/19 & CO 71/19 :- 2 -: ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-15, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 29.0 1.2019 FOR THE ASSESSMENT YEAR (AY) 2010-2011. 2. T HE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY M/S. SAVORIT LIMITED IS A COM PANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING MAIDA, SUJ I, ATTA, BRAN, VERMICELLI, MACARONI, SPAGATTI, NOODLES ETC., THE R ETURN OF INCOME FOR THE AY 2010-11 WAS FILED ON 26.09.2010 DISCLOSING T OTAL INCOME OF RS. 81,26,374/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER DATED 31.01.2013 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL INCOME OF RS.1,05,30,743/-. SUBSEQUENTLY, THE ASSESSING OFFICER NOTED THAT ASSESSEE MADE INVESTMENT IN SHAR ES AND THEREFORE PROVISIONS OF SECTION 14A OF THE ACT ARE APPLICABLE AND ACCORDINGLY ASSESSEE WAS ISSUED NOTICE U/S.148 OF THE ACT ON 29 .03.2017. IN RESPONSE TO NOTICE, ASSESSEE VIDE LETTER DATED 17 .04.2017 REQUESTED THAT THE ORIGINAL RETURN OF INCOME FILED BE TREATE D AS RETURN IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. AGAI NST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DEP UTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1), CHENNAI VIDE ITA NO.1211/19 & CO 71/19 :- 3 -: ORDER DATED 07.07.2017 BY MAKING ADDITION OF G1,27, 02,727/- U/S.14A OF THE ACT. 3. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) AND CONTENDED THAT I.E. ASSESSMENT PROCEEDINGS ARE NOT VALID IN LAW IN THE ABSENCE OF ANY REASONS TO DISBE LIEVE THAT INCOME HAD ESCAPED ASSESSMENT. IT IS FURTHER CONTENDED TH AT NO EXPENDITURE WAS INCURRED TO EARN DIVIDEND INCOME AND THEREFORE PROVISIONS OF SECTION 14A OF THE ACT HAVE NO APPLICATION. THE L D. CIT(A) WHILE UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS, HELD THAT PROVISIONS OF SECTION 14A OF THE ACT CANNOT BE APPL IED TO THE FACTS OF THE PRESENT CASE IN THE ABSENCE OF ANY EXEMPT INCOM E, PLACING RELIANCE ON THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF REDINGTON INDIA LTD VS. ADDL. CIT, 392 ITR 633 AND CIT VS. CHETTINAD LOGISTICS P. LTD, 248 TAXMAN 55. 4. BEING AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), REVENUE IS IN APPEAL BEFORE US IN ITA NO.1211/CHNY/2019 AND ASSESSEE COMPANY HAD FILED CROSS OBJECTION CHALLENGING THE CORRECTNESS OF THE FINDINGS OF THE LD. CIT(A) ON THE VALIDITY OF THE REOPENING. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. NOW THE LAW IS SETTLED TO THE EXTENT THAT IN THE ABSENCE OF ITA NO.1211/19 & CO 71/19 :- 4 -: ANY EXEMPT INCOME RESORT TO PROVISIONS OF SECTION 1 4A OF THE ACT CANNOT BE MADE, RELIANCE IN THIS REGARD CAN BE PLA CED ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASES OF REDINGTON INDIA LTD (SUPRA) AND CHETTINAD LOGISTIC S P. LTD (SUPRA) AND HON'BLE SUPREME COURT HAD ALSO DISMISSED THE SLPS F ILED AGAINST THESE TWO DECISIONS. THE DECISION OF THE LD. CIT(A) IS I N CONSONANCE WITH THE RATIO OF THE DECISIONS LAID DOWN BY HONBLE J URISDICTIONAL HIGH COURT IN THE CASES OF REDINGTON INDIA LTD (SUPRA) AND CHETTINAD LOGISTICS P. LTD (SUPRA). THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). HENC E, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. NOW, WE TAKE UP C.O.NO.71/CHNY/2019 FILED BY THE ASSESSEE. 7. THE ASSESSEE HAD CHALLENGED THE FINDINGS OF THE LD. CIT(A) ON THE VALIDITY OF THE REOPENING OF THE APPEAL. AD MITTEDLY, THE ASSESSING OFFICER HAD NOT EXAMINED THE APPLICABILIT Y OF PROVISIONS OF SECTION 14A OF THE ACT IN RESPECT OF INVESTMENT MA DE BY IT IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND THEREFORE IT CA NNOT BE SAID THAT ASSESSING OFFICER HAD FORMED AN OPINION IN THE ORIG INAL ASSESSMENT PROCEEDINGS AND THEREFORE IT CANNOT BE SAID BE THAT REASSESSMENT PROCEEDINGS ARE PROMOTED BY CHANGE OF OPINION. THER EFORE, WE UPHOLD ITA NO.1211/19 & CO 71/19 :- 5 -: THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, THE CR OSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL AND CROSS OBJECTION FILE D BY THE REVENUE AND ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 23RD DAY OF SEPTEMBER, 2019, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER )$ / CHENNAI * / DATED: 23RD SEPTEMBER, 2019. KV +, %,- &./,0/'& / COPY TO: , 1 . 1 / APPELLANT 3. , # 2&,34 / CIT(A) 5. /56 ,- & 7 / DR 2. -8 1 / RESPONDENT 4. , # 2& / CIT 6. 69,:$ / GF