Nandlal J. Agarwal, Ahmedabad V. The Dy.CIT, Circle -1, Ahmedabad

ITA 1032/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9709 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 143(3); 14A

Judgement Text

I.T.A. NO.: 1032/AHD/2011 ASSESSMENT YEAR:2002-03 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND KUL BHARAT JM] I.T.A. NO.: 1032/AHD/2011 ASSESSMENT YEAR: 2002-03 S HRI NANDLAL J. AGARWAL 2 ND FLOOR, SARTHIK AVENUE, NR. FUN REPUBLIC, SATELLITE CROSS ROAD, AHMEDABAD. ....................APPELLANT PAN AASPA 4932B VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, AHMEDABAD . .RESPONDENT APPEARANCES BY: DHIREN SHAH..... FOR THE APPELLANT P.L. KUREEL ...... F OR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 13.7.2015 DATE OF PRONOUNCING THE ORDER: JULY 17, 2015 O R D E R PER PRAMOD KUMAR, AM: BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED INT O QUESTION CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 17 TH FEBRUARY, 2011, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 254 OF TH E INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2002-03, ON THE FOLLOWING G ROUNDS :- 1. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON F ACTS IN DISMISSING THE APPEAL. HE OUGHT TO HAVE ALLOWED THE APPEAL FULLY I N ACCORDANCE WITH THE GROUNDS OF APPEAL RAISED BY THE APPELLANT BEFOR E HIM. 1. DISALLOWANCE U/S 14A R.W. RULE 8D RS.7,02,596/ - I.T.A. NO.: 1032/AHD/2011 ASSESSMENT YEAR:2002-03 PAGE 2 OF 3 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.7,02,596/- MADE BY THE AO U/S 14 A R.W. RULE 8D WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND MATERIALS BROUGHT ON RECORD BY THE APPELLANT. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN FAIL ING TO CONSIDER THE FACT THAT PROVISIONS OF SECTION 14A R.W. RULE 8D IS NOT APPLICABLE RETROSPECTIVELY IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT & ANR 234 CTR (BOM) 1 (2010). 3. THE LD. CIT(A) HAS FAILED TO CONSIDER THE CASE L AWS RELIED UPON BY THE APPELLANT. THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND, AL TER OR MODIFY ANY OF THE GROUNDS STATED HEREINABOVE EITHER BEFORE OR AT THE TIME OF HEARING. 2. BRIEFLY STATED, RELEVANT MATERIAL FACTS OF THE C ASE ARE LIKE THIS. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED RS.9,69,642/- U/S 14A WHEN THE MATTER TR AVELLED IN APPEAL BEFORE A CO-ORDINATE BENCH OF THIS TRIBUNAL, THE MATTER WA S REMITTED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE THE DISA LLOWANCE UNDER SECTION 14A READ WITH RULE 8D AND FOR THAT PURPOSE, ADJUDIC ATE DE NOVO. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER DISALLOWED RS.9 ,02,596/-. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHE R APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 4. AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY POIN TS OUT AND IN THE LIGHT OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT VS. CORRTECH ENERGY (P) LTD. (272 CTR 262), THE DISALLO WANCE UNDER SECTION 14A CANNOT BE MADE WHEN NO INCOME IS CLAIMED TO BE EXEM PT IN THAT PARTICULAR YEAR. THAT PRECISELY IS THE UNDISPUTED SITUATION BE FORE US. IN THE PRESENT YEAR, THE ASSESSEE DOES NOT HAVE ANY INCOME FROM THE RELA TED INVESTMENTS. IN THIS I.T.A. NO.: 1032/AHD/2011 ASSESSMENT YEAR:2002-03 PAGE 3 OF 3 VIEW OF THE MATTER, THE DISALLOWANCE UNDER SECTION 14A MUST BE HELD TO BE UNSUSTAINABLE IN LAW. AS FOR THE QUESTION WHETHER T HIS PLEA CAN BE TAKEN UP IN THE SECOND ROUND OF PROCEEDINGS, WE FIND THAT IT IS A PURELY LEGAL AND FUNDAMENTAL ISSUE WHICH CAN BE TAKEN UP BEFORE US E VEN AT THIS STAGE. WE FIND SUPPORT FROM HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF NTPC VS. CIT [229 ITR 383 (SC)] AND HONBLE BOMBAY HIGH COUR T IN THE CASE OF INVENTORS INDUSTRIAL CORP. LTD. VS. CIT (191 ITR 54 8). WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE. 5. IN THE RESULT, APPEAL IS ALLOWED IN THE ABOVE TE RMS. PRONOUNCED IN THE OPEN COURT TODAY ON 17 TH DAY OF JULY, 2015. SD/- SF/- KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (AC COUNTANT MEMBER) AHMEDABAD, THE 17 TH DAY OF JULY, 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPON DENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD