Shrikant Shivling Dombe, Parbhani V. Income-tax Officer, Ward - Parbhani, Parbhani

ITA 1103/PUN/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6856 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P S SHINGTE
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO S.1101 & 1103 /P U N/201 8 / ASSESSMENT YEAR S : 20 13 - 14 & 2014 - 15 SHRIKANT SHIVLING DOMBE, GAVANE ROAD, PARBHANI PAN : AAJPD4189J ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, PARBHANI WARD , PARBHANI / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 1 0 - 01 - 2019 / DATE OF PRONOUNCEMENT : 28 - 0 2 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH ESE TWO APPEALS FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER S OF COMMI SSIONER OF INCOME TAX (APPEALS) - 1, AURANGABAD FOR THE RESPECTIVE ASSESSMENT YEARS. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 19 - 03 - 2018. 2 ITA NO S.1101 & 1103/PUN/2018, A.YS. 2013 - 14 & 2014 - 15 SINCE, THE ISSUE RAISED IN BOTH THE APPEALS IS IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF VIDE THIS COMMON ORDER. 2. THE SOLITARY ISSUE RAISED IN THE APPEALS IS AGAINST DISALLOWANCE MADE U/S. 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. SHRI P.S. SHINGTE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER INVOKED THE PROVISIONS OF RULE 8D WITHOUT RECORDING SATISFACTION AS PRESCRIBED UNDER SUB - SECTION (2) AND ( 3) OF SECTION 14A OF THE ACT. THE ASSESSEE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2013 - 14 RECEIVED SHARE IN PROFIT FROM PARTNERSHIP FIRM RS.29,083/ - AND DIVIDEND INCOME OF RS.2,708/ - . BOTH THE AFORESAID INCOMES ARE EXEMPT FROM TAX. SIMILARLY, IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2014 - 15 THE ASSESSEE EARNED EXEMPT INCOME OF RS.29,083/ - FROM PARTNERSHIP FIRM. ADMITTEDLY, NO SUO - MOTO DISALLOWANCE WAS MADE BY THE ASSESSEE. THE LD. AR ASSERTED THAT THE HONBLE SUPREME COURT OF INDIA IN T HE CASE OF GODREJ & BOYCE MANUFACTURING COMPANY LIMITED VS. DEPUTY COMMISSIONER OF INCOME TAX & ANR. REPORTED AS 394 ITR 449 HAS HELD THAT RECORDING OF SATISFACTION U/S. 14A(2) AND (3) IS A PRE - CONDITION BEFORE INVOKING THE PROVISIONS OF RULE 8D. 4. PER CONTRA, SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT A PERUSAL OF ASSESSMENT ORDER WOULD CLEARLY SHOWS THAT THE ASSESSING OFFICER BEFORE MAKING DISALLOWANCE U/S. 14A HAS RECORDED SATISFA CTION AND HAS THEREAFTER MADE DISALLOWANCE UNDER RULE 8D. 3 ITA NO S.1101 & 1103/PUN/2018, A.YS. 2013 - 14 & 2014 - 15 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. IT IS A WELL SETTLED LAW THAT ROAD TO RULE 8D PASSES THROUGH SECTION 14A(2) AND (3) OF THE ACT. THUS, RECORDING OF SATISFACTION AS ENVISAGED U/S. 14A(2) AND (3) IS A MANDATORY PRE - CONDITION BEFORE MAKING ANY DISALLOWANCE UNDER RULE 8D. THE LAW HAS BEEN LAID DOWN BY THE HONBLE APEX COURT IN AN UNAMBIGUOUS MANNER IN THE CASE OF GODREJ & BOYCE MANUFACTURING COMPANY LIMITED VS. DEPUTY C OMMISSIONER OF INCOME TAX & ANR. (SUPRA). 6. HOWEVER, THE MANNER OF RECORDING OF SATISFACTION HAS NOT BEEN LAID DOWN EITHER UNDER THE ACT OR THE RULES. THE MANNER OF RECORDING SATISFACTION BY THE ASSESSING OFFICER WHETHER IT CONFORMS TO THE PROVISIONS OF SECTION 14A IS A SUBJECTIVE ASSESSMENT. THE BASIC REQUIREMENT IS THAT THE ASSESSING OFFICER SHOULD EXPRESS IN HIS SATISFACTION THE REASONS FOR DISAGREEING WITH ASSESSEE QUA SUO - MOTO NON DISALLOWANCE/INSUFFICIENT DISALLOWANCE OF EXPENDITURE INCURRED TOW ARDS EARNING INCOME EXEMPT FROM TAX. IN THE PRESENT CASE, THE ASSESSING OFFICER BEFORE INVOKING THE PROVISIONS OF RULE 8D HAS ISSUED SHOW CAUSE TO THE ASSESSEE. THE ASSESSEE GAVE DETAILED REPLY CITING VARIOUS DECISIONS. THE ASSESSING OFFICER AFTER CONSI DERING THE REPLY OF ASSESSEE NEGATED THE SAME GIVING REASONS AND THEREAFTER MADE DISALLOWANCE UNDER RULE 8D. AFTER PERUSAL OF THE ASSESSMENT ORDERS FOR THE IMPUGNED ASSESSMENT YEARS, I AM SATISFIED THAT THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION AS ENVISAGED U/S. 14A(3) OF THE ACT. I DO NOT FIND ANY MERIT IN THE SUBMISSIONS AND GROUNDS RAISED BY THE ASSESSEE ASSAILING THE INVOKING OF PROVISIONS OF SECTION 14A OF THE ACT. 4 ITA NO S.1101 & 1103/PUN/2018, A.YS. 2013 - 14 & 2014 - 15 7. NO OTHER ASPECT CHALLENGING DISALLOWANCE U/S. 14A WAS RAISED BY THE LD. AR OF ASSESSEE BEFORE THE BENCH. I FIND NO MERIT IN THE GROUND RAISED IN BOTH THE ASSESSMENT YEARS. CONSEQUENTLY, THE IMPUGNED ORDERS FOR THE RESPECTIVE ASSESSMENT YEARS ARE UPHELD AND THE APPEALS OF ASSESSEE ARE DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 28 TH DAY OF FEBRUARY, 2019 . SD/ - ( / VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; / DATED : 28 TH FEBRUARY, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1, AURANGABAD 4. THE PR. COMMISSIONER OF INCOME TAX - 1, AURANGABAD 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE