DCIT, CC-I, Ludhiana V. M/s Vardhman Industries Ltd., New Delhi

ITA 1179/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6549 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: KANIKA GUPTA; SSH ASHWANI KUMAR ADITYA KUMAR
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1179/CHD/2017 ASSESSMENT YEAR: 2012-13 THE DCIT, VS. M/S VARDHMAN INDUSTRIES LTD., CENTRAL CIRCLE-I, 2 ND FLOOR JEEVANDEEP BUILDING, LUDHIANA PARLIAMENT STREET, NEW DELHI PAN NO. AAACV3229R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : S/SH. ASHWANI KUMAR. ADITYA KUMAR & MS. KANIKA GUPTA DATE OF HEARING : 05.12.2017 DATE OF PRONOUNCEMENT : 12.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)] -5, LUDHIANA DATED 01.05.2017. 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CI T(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 2 (IN SHORT I.T. RULES) ON ACCOUNT OF EXPENSES RELA TABLE TO EARNING OF TAX EXEMPT INCOME. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL INGOTS, GP SHEET S / COILS, GC SHEETS, CCL SHEETS AND GENERATION OF POWER. THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE CERTAIN INVESTMENTS THE INCOME RELATING TO WHICH WA S EXEMPT FROM TAXATION AS PER THE PROVISIONS OF THE INCOME TAX ACT. HOWEV ER, THE ASSESSEE HAD NOT OFFERED ANY DISALLOWANCE OF EXPENDITURE IN THIS RESPECT. THE ASSESSING OFFICER, HOWEVER, APPLIED RULE 8D OF THE I.T. RULES AND COMPUTED THE DISALLOWANCE U/S 14A OF THE ACT AT RS. 32,17,309/-. BEING AGGRIEVED BY THE ABOVE DISALLOWANCE, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) DELETED THE ADDITION WHILE RELYING UP ON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE OWN CAS E OF THE ASSESSEE FOR ASSESSMENT YEAR 2007-08. BEFORE US, THE LD. AR HAS RELIED UPON THE VARIOUS DECISIONS OF THE HON'BLE HIGH COURT INCLUDI NG THAT OF THE JURISDICTIONAL HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF CIT VS. WINSOME TEXTILES (2009) 319 ITR 204 (P&H) AND HON' BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD VS. ITO (2015 ) 378 ITR 33 (DELHI) AND OF THE HON'BLE GUJARAT HIGH COURT IN THE CAS E OF CORRTECH ENERGY P. LTD. (2014) 45 TAXMAN.COM 116 AND FURTHER OF THE H ON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. M/S SHIVAM MOTO RS (P) LTD (2014) 272 CTR (ALL) 277 AND VARIOUS OTHER CASE LAWS. IN ALL THE ABOVE REFERRED 3 TO CASE LAWS, THE HON'BLE HIGH COURTS HAVE BEEN UNA NIMOUS TO HOLD THAT NO DISALLOWANCE IS ATTRACTED U/S 14A IN CASE THE ASSE SSEE HAS NOT EARNED ANY INCOME NOT FORMING PART OF THE TOTAL INCOME. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THE AP PEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS HERE BY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.12.2017. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12.12.2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR