ACIT, Chandigarh V. Sh. Surinder Kumar Singal, Chandigarh

ITA 1099/CHANDI/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0130 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S KK MITTAL
• Assessee Lawyers: B M MONGA
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 1099/CHD/2014 ASSESSMENT YEAR: 2008-09 THE ACIT, VS. SH. SURINDER KUMAR SINGAL, CIRCLE 5(1), CHANDIGARH CHANDIGARH PAN NO. ADYPS5462P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.KK .MITTAL RESPONDENT BY : SH. B.M. MONGA & SH. ROHIT KAURA DATE OF HEARING : 05.04.2016 DATE OF PRONOUNCEMENT : 05.04.2016 . ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A), CHANDIGARH DATED 24.09.2014 RELATING TO ASSESSMENT YEAR 2008-09. 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12.51.631/- MADE U/S 36(L)(III) ON THE GROUNDS THAT DISALLOWANCE U/S 36(L)(III) CAN BE MADE ONLY OUT OF NET INTEREST DEBITED TO P&L ACCOUNTS WHEREAS THE PROFIT AND 2 LOSS ACCOUNT HAS ACTUALLY BEEN DEBITED BY RS. 20,39 ,820/- ON ACCOUNT OF INTEREST EXPENDITURE. 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 12,51 R 631/- MADE U/S 36(L)(III)MADE BY THE ASSESSING OFFICER FOLLOWING THE PRINCIPLE LAID DOWN BY THE HO N'BLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF M/S ABH ISHEK INDUSTRIES P LTD, (2006) 286 ITR 1. 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 3,03,600/- MADE U/S 14A ON THE GROUND THAT INTEREST EXPENDITURE HAS SEPARATELY BEEN DISALLOWED U/S 36(L )(III) WHEREAS LD. CIT(A) HAS HIMSELF HELD THAT THERE IS POSSIBILITY OF LOANS/FUNDS BEING DIVERTED FOR INVES TMENT AND EARNING EXEMPT INCOME. 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED PARTICULARLY WHEN THE ASS ESSEE HAS NOT MAINTAINED SEPARATE ACCOUNTS IN RESPECT OF INVESTMENT IN FUNDS FROM WHICH EXEMPT INCOME HAS BE EN EARNED . 2. WE HAVE HEARD SH. S. K. MITTAL, LD. DR AND S/SH RI B.M. MONGA & ROHIT KAURA, LD COUNSELS FOR THE ASSESSEE. IT IS OBSERV ED THAT IN THIS CASE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS. 10 LAKHS. THUS, IN VIEW OF CIRCULAR NO. 21/2015 DATED 10.12.2015, F.NO. 279/MI SC.142/2007-ITJ(PT), GOVERNMENT. OF INDIA, MINISTRY OF FINANCE, DEPARTME NT OF REVENUE, CENTRAL BOARD OF DIRECT TAXES, THE INSTANT APPEAL DESERVES TO BE TREATED AS WITHDRAWN / NOT PRESSED. VIDE PARA 10 OF THE ABOVE INSTRUCTION S, THE CBDT HAS CLARIFIED THAT THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PEND ING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN ITAT. THE CBDT HAS FURTHER CLA RIFIED THAT THE PENDING APPEALS BEFORE THE TRIBUNAL BELOW THE SPECIFIED TAX LIMITS I.E. RS. 10 LAKHS MAY BE WITHDRAWN / NOT PRESSED BY THE REVENUE. IT IS A LSO OBSERVED THAT THE ISSUE 3 INVOLVED IN THIS APPEAL IS NOT COVERED BY PARA 8 (E XCEPTIONS) OF THE ABOVE INSTRUCTIONS. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS TREATED AS WITHDRAWN / NOT PRESSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2016 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 5 TH APRIL, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR