Rajnish Garg, Ludhiana V. DCIT, C-VI, Ludhiana

ITA 1399/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6597 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1399/CHD/2018 / ASSESSMENT YEAR : 2012-13 SH. RAJNISH GARG, 525-B, AGGAR NAGAR, LUDHIANA VS. THE DCIT, CIRCLE VI, LUDHIANA ./PAN NO: ADFPG2620N / APPELLANT /RESPONDENT ! /ASSESSEE BY : NONE ' ! / REVENUE BY : SH. MANJIT SINGH, SR. DR # $ % /DATE OF HEARING : 27.02.2019 &'() % / DATE OF PRONOUNCEMENT : 27.02.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.08.2018 OF THE COMMISSIONER OF INCOM E TAX(APPEALS)-3, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSE E DESPITE NOTICE. SINCE A SMALL ISSUE OF DISALLOWANCE OF EXPENDITURE INCURRED IN RELATION TO THE EARNING OF EXEMPT INCOME UNDER THE PROVISIONS O F SECTION 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IS INVOL VED, HENCE, WE PROCEED TO DECIDE THE ISSUE AFTER HEARING THE LD. DR. 3. THE LD. DR HAS INVITED OUR ATTENTION TO THE IMPU GNED ORDER OF THE ASSESSING OFFICER TO SUBMIT THAT THE ASSESSEE DURI NG THE YEAR HAD MADE INVESTMENT IN SHARES AND MUTUAL FUNDS AMOUNTING TO RS. 3,24,79,868/-, ITA NO. 1399-CHD-2018- SH. RAJNISH GARG, LUDHIANA 2 WHEREUPON, THE ASSESSEE EARNED DIVIDEND INCOME OF RS. 2,34,919/-. THAT THOUGH THE ASSESSEE SUO MOTU DISALLOWED A SUM OF R S. 1,01,546/- UNDER THE PROVISIONS OF SECTION 14A OF THE ACT, HOWEVER, THE ASSESSEE COULD NOT JUSTIFY IT BY GIVING THE DETAILS OF THE SAME TO TH E ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE, CALCULATED THE DISALL OWANCE U/S 14A OF THE ACT READ WITH RULE 8D (2)(III) OF THE INCOME TAX RU LES AT 2,28,070/-. THE ATTENTION OF THE TRIBUNAL WAS INVITED TO THE IMPUG NED ORDER OF THE CIT(A) THAT THE LD. CIT(A) HAS ALSO HELD THAT THE ASSESSI NG OFFICER HAS COMPUTED THE DISALLOWANCE AS PER THE PROVISIONS OF LAW. HOWE VER, A PERUSAL OF THE ORDER OF THE CIT(A) FURTHER REVEALS THAT THE ASSES SEE HAS ALSO FURNISHED THE DETAILS REGARDING SUO MOTU CALCULATION OF DISALLO WANCE AT RS. 1,01,546/-. A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER AS WELL AS OF THE CIT(A) REVEALS THAT NO FAULT HAS BEEN POINTED OUT IN THE WORKING OF THE SUO MOTU DISALLOWANCE MADE BY THE ASSESSEE. 4. CONSIDERING THE AMOUNT OF DIVIDEND INCOME OF RS. 2.34 LACS AND SUO MOTU DISALLOWANCE MADE BY THE ASSESSEE OF THE EXPEN DITURE FOR EARNING OF THE AFORESAID INCOME AT 1,01,546/- AND ALSO CONSID ERING THE FACT THAT THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTIO N REGARDING THE WORKING OF THE SUO MOTU DISALLOWANCE MADE BY THE ASSESSING OFFICER AND ALSO FURTHER CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT USED ANY INTEREST BEARING FUNDS TO MAKE THE INVESTMENT, IN MY VIEW, NO FURTHER DISALLOWANCE IS CALLED FOR IN THIS CASE EXCEPT THAT HAS BEEN SUO MOTU OFFERED BY THE ASSESSEE. I, THEREFORE, DELETE THE ADDITION MADE B Y THE LOWER AUTHORITIES TO THE EXTENT OF DISALLOWANCE OFFERED BY THE ASSESSEE HIMSELF. ITA NO. 1399-CHD-2018- SH. RAJNISH GARG, LUDHIANA 3 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS, THERE FORE, TREATED AS ALLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 27.02.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR