Global Exim private Ltd., Kolkata V. I.T.O.,Ward-6(2), Kolkata

ITA 126/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5169 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-06-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 25-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAN JAY MUKHERJEE CIT LD
• Keywords: Earning of tax free income; Assessment record; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH , KOLKATA BEFORE SHRI A.T, VARKEY , JM & DR. A .L. SAINI, AM ITA N O . 126 / KOL /201 9 ( ASSESSMENT YEAR : 20 14 - 15 ) M/S. GLOBAL EXIM PVT. LIMITED PAN: A ADCG0037H VS. I.T.O., WARD 6(2), , KOLKATA ( / APPELLANT) .. ( / RESPONDENT) APPELLANT BY : NONE REVENUE BY : SHRI SAN JAY MUKHERJEE, ADDL. CIT, LD. SR.DR DATE OF HEARING : 1 1 / 0 6 /201 9 DATE OF PRONOUNCEMENT: 23 /0 8 /2019 / O R D E R PER DR. A. L. SAINI, AM : THE CAP TIONED APPEAL FILED BY THE ASSESSEE , PERTAINING TO ASSESSMENT YEAR 20 14 - 15 , IS DIRECTED AGAINST THE ORDER DATED 16 - 10 - 2018 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) , 1 8 , KOLKATA , WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE AS SESSING OFFICER U/S 14 3 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 01.12.2016 . 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.3,02,307/ - MADE BY THE LD. AO U/S. 14A READ WITH RULE 8D OF INCOME TAX RULES. 2. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE AMOUNTING TO RS.3,02,307/ - INVOKING THE PROVISIONS OF SECTION 14A WITHOUT EVALUATING THE SAME ON MERIT. 3. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN UPHOLDING APPLICATION OF SECTION 14A READ WITH RULE 8D WITHOUT ANY NOTE OF DISSATISFACTION IN THIS REGARD. ITA NO. 126 / KOL/2019 M/S. GLOBAL EXIM PVT. LTD. 2 4. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE APPELLANT HAS NOT BEEN GIVEN REASONABLE OPPORTUNITIES OF BEING HEARD. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, ADDUCE OR AMEND ANY GROUND(S) ON OR BEFORE THE DATE OF HEARING O F THE APPEAL. 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE ( LD.DR) WAS PRESENT FOR THE APPELLANT REVENUE. IN THE ABSENCE OF ANY APPEARANCE OF THE ASSESSEE, THE APPEAL IS BEING DISPOSED OF EX PARTE QUA THE ASSESSE AFTER HEARING THE LD. DR FOR THE REVENUE ON MERITS IN TERMS OF RULE 24 OF ITAT RULES, 1963. 4. AT THE OUTSET ITSELF THE LEARNED DEPARTMENTAL REPRESENTATIVE ( LD.DR) SUBMIT TED BEFORE US THAT BASED ON THE ASSESSMENT RECORDS AND ASSESSMENT ORDER FRAMED BY THE AO IF THERE IS NO EXEMPT INCOME, THERE SHOULD NOT BE ANY DISALLOWANCE U/S. 14A/R.W.R 8D OF THE I.T RULES, 1962. THE LD. DR FOR THE REVENUE POINTED OUT THAT IT IS A SETTL ED POSITION OF LAW THAT IF THERE IS NO EXEMPT INCOME, THEN NO DISALLOWANCE SHOULD BE MADE U/S. 14A/R.W.R 8D OF THE I.T RULES, 1962. 5. AFTER HEARING THE LD. DR FOR THE REVENUE, WE NOTE THAT THE ISSUE INVOLVED IN THIS ASSESSEES APPEAL IS NO LONGER RES INT EGRA . THE ASSESSEE HAS NOT EARNED DIVIDEND INCOME DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THERE SHOULD NOT BE ANY DISALLOWANCE . FOR THIS, W E RELY ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HOLI CHEM PVT. LTD IN ITA NO. 486 OF 2014, WHEREIN IT WAS HELD THAT IN THE ABSENCE OF ANY TAX FREE INCOME CORRESPONDING EXPENDITURE COULD NOT BE DISALLOWED U/S. 14A/R.W.R 8D OF THE RULES . WE ALSO NO T E THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S. CHEM INVESTMENT LTD IN ITA NO. 7 41 OF 2014, ORDER DATED 2/9/205, WHEREIN IT WAS HELD THAT SECTION 14A WILL NOT APPLY IF ITA NO. 126 / KOL/2019 M/S. GLOBAL EXIM PVT. LTD. 3 EXEMPT INCOME IS NOT RECEIVED BY THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION . THEREFORE IN VIEW OF ABOVE, DISALLOWANCE U/S. 14A/R.W.R 8D OF THE RULES IS NOT SUSTAINABLE . HENCE, WE ALLOW THE ASSESSEES APPEAL. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOU NCED IN THE OPEN COURT ON THIS 23 /0 8 /201 9 SD/ - ( A.T. VARKEY ) SD/ - ( A. L. SAINI ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER /KOLKATA ; DATED: 23 / 0 8 /201 9 *PP , S R. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - M/S. GLOBAL EXIM PRIVATE LIMITED, 1 KYD STREET, 16 PALACE COURT, KOLKATA - 1, W.B. 2. / THE RESPONDENT. - INCOME TAX OFFICER, WARD - 6(2), P - 7 CHOWINGHEE SQUARE, 6 TH FL., KOLKATA - 69,W.B . 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA