Assistant Commissioner of Income Tax Circle-4(1)(2), Bangalore V. M/s Maini Material Movement Pvt Ltd , Bangalore

ITA 1366/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9903 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 27-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINANDINI DAS
• Keywords: Tax effect; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO . 13 66 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4 (1) (2), BANGALORE. VS. M/S. MAINI MATERIAL MOVEMENT PVT. LTD., 131, 6 TH FLOOR, DEVATHA PLAZA, RESIDENCY ROAD, BANGALORE 560 025. PAN: AABCM8922D APPELLANT RESPONDENT APPELLANT BY : SMT. SRINANDINI DAS, ADDL. CIT (DR) RESPONDENT BY : MS. SUSAN MATHEW, CA DATE OF HEARING : 0 4 . 1 2 .2018 DATE OF PRONOUNCEMENT : 07 . 1 2 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-4, BANGALORE DATED 01.02.2018 FOR ASSES SMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE LD. CIT (A), IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IS OPPOSED TO LAW AND THE FACT AND CIRCUMSTANCES OF THE CASE. 2. ON FACTS OF THE CASE, WHETHER THE DECISION OF TH E LD CIT (A) IS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE DESPITE THE FACT THAT THE PROVISIONS TO SECTION 14A MAKES IT CLEAR THAT THE E XPENDITURE HAS TO BE WORKED OUT AS PER RULE 8D(2)(II) & 8D(2)(III). 3. ON FACTS OF THE CASE, WHETHER THE DECISION OF TH E LD CIT (A) IS RIGHT IN ALLOWING THEAPPEAL OF ASSESSEE AS THE SAME CONTR AVENES THE PROVISIONS OF SECTION 14A AND ALSO THE LD CIT (A) H AS NOT FOLLOWED THE INSTRUCTIONS LAID DOWN IN THE BOARD'S CIRCULAR NO 5 /2014 DATED 11.02.2014 WHEREIN, THE BOARD'S HAS MADE IT CLEAR T HAT THE DISALLOWANCE U/S 14A R.W.R 8D HAS TO BE MADE EVEN W HERE THE TAX PAYER IN A PARTICULAR YEAR HAS NOT EARNED ANY EXEMP TED INCOME. 4. ON FACTS OF THE CASE, WHETHER THE DECISION OF TH E LD CIT (A) IS RIGHT IN ALLOWING RELIEF TO THE ASSESSEE BY MERELY STATIN G THAT THE AO HAS NOT COUNTERED THE ARGUMENTS PUT FORTH BY THE ASSESSEE A ND THE ADDITION IS NOT ON SOUND FOOTING. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT (A) IN SO FAR AS IT RELATES ITA NO. 1366/BANG/2018 PAGE 2 OF 2 TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF TH E ASSESSING OFFICER MAY BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND / OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F THE ASSESSEE THAT THE ONLY DISPUTE AS PER VARIOUS GROUNDS RAISED BY THE REVENU E IS REGARDING DELETION OF THE DISALLOWANCE MADE BY THE AO U/S. 14A R.W.RUL E 8D OF RS.18,08,880/-. SHE SUBMITTED THAT THERE WAS ONE MORE DISALLOWANCE MADE BY THE AO BEING DISALLOWANCE OF RESEARCH EXPENSES OF RS. 75,42,066/ - AND THIS WAS ALSO DELETED BY CIT(A) BUT AS PER THE GROUNDS OF APPEAL RAISED BY REVENUE IN THE PRESENT APPEAL, THIS ISSUE HAS NOT BEEN RAISED BY R EVENUE IN ITS APPEAL AND HENCE, THE TAX EFFECT IN THE PRESENT APPEAL OF THE REVENUE IS LESS THAN RS. 20 LAKHS AND THEREFORE, AS PER RECENT CBDT INSTRUCTION S AS PER CIRCULAR NO. 3/2018 DATED 11.07.2018, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT. THE LD. DR OF REVENUE H AD NOTHING TO SAY IN REPLY. IN VIEW OF THE FACTS DISCUSSED ABOVE, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT AND HENCE, T HE SAME IS DISMISSED FOR THAT REASON. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 07 TH DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.