Udaipuria Commercial Pvt. Ltd., , Kolkata V. ITO, Ward - 6(4), Kolkata , Kolkata

ITA 135/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0153 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 25-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Rule 8D
• Section: 143(3); 14A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.135/KOL/2019 ( / ASSESSMENT YEAR: 2014-15) UDAIPURIA COMMERCIAL PVT. LTD. EASTERN BUILDING, 19, R.N. MUKHERJEE ROAD, ROOM NO. 211, 2 ND FLOOR, KOLKATA VS. ITO, WARD-6(4), KOLKATA ./ ./PAN/GIR NO.: AAACU 3162 E (APPELLANT) .. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 31/12/2019 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE , PE RTAINING TO ASSESSMENT YEAR 2014-15, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLKATA IN APPEAL NO. 10011/CIT(A)-2/20 17-18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/ 12/2016. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE UDAIPURIA COMMERCIAL PVT. LTD. ITA NO.135/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THE EX-PARTE ORDER U/S 250 OF THE I.TAX ACT, 196 1 IS BAD IN LAW AS THERE WAS NO FAILURE ON THE PART OF THE APPELLANT TO MAK E DUE COMPLIANCE & DISCLOSURES TO THE LD. CIT(A). 2. THE LD. ASSESSING OFFICER ERRED IN DISALLOWING R S. 35,053/- U/S 14A OF ACT ON ERRONEOUS APPLICATION OF RULE 8D OF INCOME TAX R ULES WITHOUT CONTESTING OUR CALCULATION MADE OF RS. 5,708/-. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DELETE, SUBSTITUTE ANY OF THE GROUNDS AND/OR TAKE ADDITIONAL GROUND/S BEFORE OR AT ANY TIME OF HEARING OF THIS APPEAL. 4. AT THE OUTSET ITSELF WE NOTE THAT THE ASSESSEE S UO-MOTO MADE THE DISALLOWANCE UNDER RULE 8D(2)(III) READ WITH SECTION 14A OF THE ACT TO THE TUNE OF RS. 5,708/-. THE ASSESSING OFFICER VIDE HIS ASSESSMENT ORDER DAT ED 27.12.2016 COMPUTED THE DISALLOWANCE UNDER RULE 8D(2)(III) AT RS. 40,761/-. THEREFORE, THE BALANCE AMOUNT OF RS. 35,035/- (RS. 40,761/- - RS. 5,708) HAS BEEN ADDED BY THE ASSESSING OFFICER. 5. ON APPEAL THE LD. CIT(A) CONFIRMED THE ORDER PAS SED BY THE ASSESSING OFFICER. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD LD. D.R FOR THE REVENUE AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ISSUE RAISED BY THE ASSESS EE IN ITS GROUNDS OF APPEAL IS NO LONGER RES INTEGRA . WE NOTE THAT THE CO-ORDINATE BENCH OF ITAT KOLKAT A IN THE CASE OF REI AGRO LTD. VS. DCIT REPORTED IN 144 ITD 141 (KOL-TRIB) HAS HELD THAT IT IS ONLY THE INVESTMENT WHICH YIELDS DIVIDEND DUR ING THE PREVIOUS YEAR THAT HAS TO BE CONSIDERED WHILE ADOPTING THE AVERAGE VALUE OF I NVESTMENT FOR THE PURPOSE OF RULE 8D(2)(II) AND RULE 8D(2)(III) OF THE INCOME TA X RULES. THE AFORESAID VIEW OF THE TRIBUNAL HAS SINCE BEEN CONFIRMED AS CORRECT BY THE HONBLE CALCUTTA HIGH COURT IN GA NO. 3581 OF 2013 IN THE APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN UDAIPURIA COMMERCIAL PVT. LTD. ITA NO.135/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 THE CASE OF REI AGRO LTD (SUPRA). WE NOTE THAT THE ASSESSING OFFICER HAS CONSIDERED 0.5% OF AVERAGE INVESTMENT FOR MAKING TH E DISALLOWANCE UNDER RULE 8D(2)(III) OF THE RULES WHICH IN OUR OPINION IS NOT CORRECT. THEREFORE, IN THE LIGHT OF THE ABOVE NOTED JUDICIAL PRECEDENT WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE UNDER RULE 8D(2)(III) ONLY TAKING INTO ACCOUNT DIVIDEND BEARING SECURITIES. THEREFORE, THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 31.12 .2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 31/12/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. UDAIPURIA COMMERCIAL PVT. LTD. 2. ITO, WARD-6(4), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES