Simpson& General Finance Co. Ltd., CHENNAI V. DCIT Corporate Circle 6(2), CHENNAI

ITA 1226/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1527 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , , , , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.1226/CHNY/2019 ( / ASSESSMENT YEAR: 2012-13) M/S. SIMPSON & GENERAL FINANCE CO LTD., NO.861/862, ANNA SALAI, CHENNAI 600 002. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), CHENNAI PAN: AABCS 1868A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 28.11.2019 /DATE OF PRONOUNCEMENT : 12.12.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 15, CHENNAI DATED 30.01.2019 AND PERTAINS TO THE ASSESSMENT YEA R 2012-13. 2. SHRI SAROJ KUMAR PARIDA, THE LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS ADDITION OF 2 I.T.A. NO. 1226/CHNY/2019 RS.1,32,252/- TOWARDS PRINCIPAL PORTION OF THE LEAS E RENT. ACCORDING TO THE LD.COUNSEL, IN THE RETURN OF INCOME THE ASSE SSEE HAS OFFERED INTEREST PORTION ONLY FOR TAXATION, THE PRINCIPAL P ORTION OF THE LEASE RENT WAS NOT OFFERED. THEREFORE THE ASSESSING OFFICER M ADE AN ADDITION TO THE EXTENT OF RS.1,32,252/-. ON APPEAL BY THE A SSESSEE, THE CIT(A) HAS CONFIRMED THE ORDER OF THE ASSESSING OFF ICER. THE LD.COUNSEL FOR THE ASSESSEE VERY FAIRLY SUBMITTED T HAT FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08, AN IDENTICAL I SSUE CAME BEFORE THIS TRIBUNAL. THIS TRIBUNAL CONFIRMED THE SIMILAR ORDER OF THE ASSESSING OFFICER AND ON FURTHER APPEAL BEFORE THE HIGH COURT, THE HIGH COURT ALSO CONFIRMED THE ORDER OF THE ASSESSIN G OFFICER. 2.1 WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPART MENTAL REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS OFFERED ONLY INTEREST PORTION FOR TAXATION, THE PRI NCIPAL PORTION OF THE LEASE RENT WAS NOT OFFERED FOR TAXATION FOR THE ASS ESSMENT YEARS 2002-03 TO 2007-08. AN ADDITION WAS MADE BY THE ASS ESSING OFFICER WHICH TRAVELLED UP TO MADRAS HIGH COURT. THE MADRAS HIGH COURT CONFIRMED THE IDENTICAL ORDER OF THIS TRIBUNAL CONF IRMING THE IDENTICAL ADDITION. CONSIDERING THE ORDER OF THE HIGH COURT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2002-03 TO 2007-0 8, WE DO NOT 3 I.T.A. NO. 1226/CHNY/2019 FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY THE ORDER OF THE CIT(A) IS CONFIRMED. 3. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF EXPENDITURE TO THE EXTENT OF RS.4,08,617/- FOR EARN ING THE EXEMPT INCOME. 3.1 THE LD.COUSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS DISCLOSED RS.7.44 LAKHS AS EXEMPTED INCOME EARN ED ON THE INVESTMENT. HOWEVER THE ASSESSING OFFICER DISALLOW ED RS.4.08 LAKHS. ACCORDING TO THE LD. AR, THE INVESTMENT WHIC H HAS NOT YIELDED EXEMPTED INCOME SHOULD NOT BE DISALLOWED FOR COMPUT ING THE AVERAGE VALUE OF INVESTMENT UNDER RULE 8D(2)(III). ON A QUERY FROM THE BENCH, THE LD. COUNSEL FOR THE ASSESSEE CLARIFI ED THAT HE MAY NOT BE ABLE TO IDENTIFY THE INVESTMENT WHICH DOES NOT Y IELDED ANY EXEMPTED INCOME. 3.2 WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPART MENTAL REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS EARNED RS.7.44 LAKHS AS DIVIDEND INCOME, WHICH IS A DMITTEDLY EXEMPTED FROM TAXATION. FOR COMPUTING THE DISALLOW ANCE U/S.14A 4 I.T.A. NO. 1226/CHNY/2019 R.W.R. 8D(2)(III), APART FROM THE DIRECT EXPENDITUR E THE EXPENDITURE RELATING TO INVESTMENT WHICH HAS YIELDED ANY EXEMPT ED INCOME HAS TO BE CONSIDERED. IN THIS CASE, THE ASSESSEE COULD NOT IDENTIFY THE INVESTMENT WHICH HAS NOT YIELDED ANY EXEMPTED INCOM E. MOREOVER THE EXEMPTED INCOME EARNED BY THE ASSESSEE IS ABOUT RS.7.44 LAKHS. HOWEVER, THE ASSESSING OFFICER DISALLOWED O NLY RS.4.08 LAKHS. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY RE ASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES. ACCORDIN GLY THE SAME IS CONFIRMED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 12 TH DECEMBER, 2019 AT CHENNAI. SD/- SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER (... ) (N.R.S. GANESAN) / JUDICIAL MEMBER /CHENNAI, /DATED, THE 12 TH DECEMBER, 2019. RSR %& '& /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. &+, - /DR 6. ,. /GF