The Alidhara Textool Engineers Pvt.Ltd., Surat V. The Addl.CIT, Circle-1, Surat

ITA 1392/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9121 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 1392/AHD/2012 (ASSESSMENT YEAR: 2009-10) ALIDHARA TEXTOOL ENGINEERS P. LTD. PLOT NO. B-168, ROAD NO. 6, UDHYOGNAGAR, UDHNA- 394210 V/S ADDL. COMMISSIONER OF INCOME TAX, RANGE-1, SURAT (APPELLANT) (RESPONDENT) PAN: AAACD8469M APPELLANT BY : NONE (WRITTEN SUBMISSIONS ) RESPONDENT BY : SHRI NARENDRA SINGH, SR. D.R . ( )/ ORDER DATE OF HEARING : 29 -03-201 6 DATE OF PRONOUNCEMENT : 30 -03-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-I, SURAT DATED 30.05.2012 PERTAINING TO A.Y. 2009-10. ITA NO. 1392 /AHD/2012 . A.Y. 2009-10 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE D ISALLOWANCE OF RS. 17,38,762/- MADE U/S. 14A OF THE ACT. 3. ASSESSEE IS ENGAGED IN THE MANUFACTURING OF TEXTILE MACHINERIES AND THEIR PARTS. RETURN FOR THE YEAR WAS SELECTED FOR S CRUTINY ASSESSMENT. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O NOTICED THAT THE ASSESSEE HAS SHOWN EXEMPT INCOME O F RS. 1,64,13,962/- BEING DIVIDEND ON MUTUAL FUND AND DIV IDEND ON EQUITY SHARES. THE A.O FOUND THAT NO EXPENDITURE IN RELATI ON TO SUCH INCOME HAS BEEN SHOWN. ASSESSEE WAS ASKED TO EXPLAIN THE S AME. THE ASSESSEE EXPLAINED THAT NO EXPENSES HAVE BEEN INCUR RED TO EARN THE EXEMPT INCOME. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O WHO PROCEEDED BY INVOKING THE PROVISIO NS OF SECTION 14A READ WITH RULE 8D AND COMPUTED THE DISALLOWANCE AT RS. 17,38,762/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. BEFORE US, A WRITTEN SUBMISSION HAS BEEN F ILED WHEREIN THE ASSESSEE HAS STATED THAT IT HAS SUO MOTU DISALLOWED PORTFOLIO MANAGEMENT FEES OF RS. 16,24,739/- AND STT CHARGES OF RS. 9,16,235/- AS EXPENSES IN RELATION TO EXEMPT INCOME . IT HAS BEEN FURTHER STATED THAT THE A.O HAS NOT CONSIDERED THE EXPENSES ALREADY DISALLOWED IN THE COMPUTATION OF INCOME. THEREFORE, THE DISALLOWANCE MADE BY THE A.O NEED TO BE DELETED. 5. PER CONTRA, THE LD. D.R. STRONGLY STATED THAT THE A CT DOES NOT PROVIDE FOR ANY PARTICULAR MANNER FOR RECORDING THE SATISFA CTION OF THE A.O FOR DISCARDING THE DISALLOWANCES MADE BY THE ASSESSEE. IT IS THE SAY OF THE LD. D.R. THAT THE DISALLOWANCE MADE BY THE A.O. DES ERVES TO BE UPHELD. ITA NO. 1392 /AHD/2012 . A.Y. 2009-10 3 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THERE IS NO REFEREN CE/MENTION OF SUO- MOTU DISALLOWANCE OF RS. 16,24,739/- AND 9,16,235/- IN THE ASSESSMENT ORDER AND ALSO IN THE ORDER OF THE FIRST APPELLATE AUTHORITY. 7. IN OUR CONSIDERED OPINION, THIS ISSUE NEEDS TO BE V ERIFIED AT THE ASSESSMENT STAGE. THEREFORE, IN THE INTEREST OF JUS TICE, WE RESTORE THIS ISSUE TO THE FILES OF THE A.O. THE A.O IS DIRECTED TO DECIDE THIS ISSUE AFRESH. AFTER CONSIDERING THE SUO MOTU DISALLOWANCE MADE BY THE ASSESSEE AND AFTER GIVING A REASONABLE AND SUFFICIE NT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 30 - 03 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD