DCIT, CHENNAI V. Harita Seating Systems Limited, CHENNAI

ITA 1336/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8216 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . !' , # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1336/MDS/2016 & '& /ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -2 (2), ROOM NO.512, 5 TH FLOOR, WANAPARTHY BLOCK, 121, M.G.ROAD, CHENNAI 600 034. V. M/S.HARITA SEATING SYSTEMS LIMITED, JAYALAKSHMI ESTATES, NO.29 (OLD NO.8), HADDOWS ROAD, CHENNAI 600 006. PAN: AAACH 2492 N ( () /APPELLANT) ( *+() /RESPONDENT) () , - /APPELLANT BY : SHRI. SHIVA SRINIVAS, JCIT *+(),- /RESPONDENT BY : SHRI. SAROJ KUMAR PARIDA, ADVOCA TE ,.# /DATE OF HEARING : 29.09.2016 /0' ,.# /DATE OF PRONOUNCEMENT : 28.10.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF CIT(A) -6, CHENNAI DATED 03.03.2016 AND PERTAINS TO ASSESS MENT YEAR 2011-12. 2 I.T.A. NO.1336/MDS/2016 2. SHRI SHIVA SRINIVAS, THE LEARNED REPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE INCOME TAX ACT. REFERRING TO THE ASSESSMENT ORDER, THE LEARNED DEPA RTMENT REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE FOR EARNING THE EXEMPTED INCOME BY APPL YING THE PROVISIONS OF RULE 8D (2) OF INCOME TAX RULES. HOWEVER, THE CI T(A) ALLOWED THE CLAIM OF THE ASSESSEE PARTLY BY RESTRICTING THE DIS ALLOWANCE TO RS.1,05,715/- AS AGAINST THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER TO THE EXTENT OF RS.2,69,77,912/-. THE CIT(A) WITHO UT DISCLOSING THE FACTS OF THE CASE HAS SIMPLY PLACE RELIANCE ON THE DECISI ON OF THIS BENCH OF THE TRIBUNAL. IT IS NOT KNOWN IN WHICH COMPANY THE ASSE SSEE INVESTED AND HOW SUCH INVESTMENT WOULD BE CONSIDERED AS INVESTME NT IN THE SUBSIDIARY COMPANIES. UNLESS SUCH DETAILS ARE BROUG HT ON RECORD, THE DEPARTMENT REPRESENTATIVE SUBMITTED THAT THE DECISI ON OF THIS BENCH OF THIS TRIBUNAL CANNOT BE APPLIED. 3. ON THE CONTRARY, SHRI SAROJ KUMAR PARIDA, THE LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE MADE INVES TMENT IN THE SUBSIDIARY COMPANIES. THEREFORE, THE CIT(A) BY PLAC ING HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL IN ACIT VS. M.BASKARAN I N ITA 3 I.T.A. NO.1336/MDS/2016 NO.1717/MDS/2013 AND EIH ASSOCIATED HOTELS LIMITED VS. DCIT IN ITA NO.1503/1624/MDS/2012, PARTLY ALLOWED THE CLAIM OF THE ASSESSEE BY RESTRICTING THE DISALLOWANCE TO RS.1,05,715/-. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE A LSO CAREFULLY GONE THROUGH THE ORDER OF THIS TRIBUNAL IN M.BASKARAN (SUPRA) AND EIH ASSOCIATED HOTELS LIMITED (SUPRA). 5. THE ASSESSEE APPEARS TO HAVE CLAIMED BEFORE THE CIT(A) THAT THE INVESTMENT WAS MADE IN SUBSIDIARY COMPANIES. THE DE TAIL OF THE COMPANIES IN WHICH INVESTMENT WAS SAID TO BE MADE I S NOT AVAILABLE ON RECORD. THE SHARE HOLDING PARTICIPATION OF THE COMP ANIES IN WHICH INVESTMENT WAS MADE ALSO WAS NOT AVAILABLE ON RECOR D. UNLESS AND UNTIL, THE SHARE HOLDING PATTERN OF THE COMPANY IN WHICH I NVESTMENT WAS SAID TO BE MADE IS MADE AVAILABLE BY THE ASSESSEE, IT CA NNOT BE CONSTRUED THAT SUCH COMPANIES ARE SUBSIDIARY COMPANIES OF THE ASSESSEE. THE DECISION OF THIS BENCH OF THE TRIBUNAL HAS TO BE AP PLIED BY BRINGING ON ALL FACTS ON RECORD. SINCE THE CIT(A) HAS NOT BROUGHT O N RECORD ALL THE FACTS AND CIRCUMSTANCES INCLUDING THE SHARE HOLDING PATTE RN OF THE SO CALLED SISTER CONCERN, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. H ENCE, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK 4 I.T.A. NO.1336/MDS/2016 TO THE FILE OF THE AO. THE AO SHALL RE-EXAMINE THE MATTER AND BRING ON RECORD THE DETAILS OF THE COMPANIES IN WHICH THE IN VESTMENT WAS MADE BY THE ASSESSEE AND THE SHARE HOLDING PATTERN OF SU CH COMPANIES AND THE AO SHALL ALSO DISCUSS IN THE ORDER HOW SUCH COM PANIES ARE SUBSIDIARY COMPANIES TO THE ASSESSEE. THEREAFTER, THE AO SHALL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING REASONAB LE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( . . !' ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) # /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE 28 TH OCTOBER, 2016. SP. , *.!2 32'. /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. 4. ( )/CIT(A) 4. 4. /CIT, 5. 25 *. /DR 6. & 6 /GF.