ACIT, Circle-7(1), Hyd, Hyderabad V. Seven Hills Co-Operative Urban Bank Ltd, Hyderabad, Hyderabad

ITA 1410/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6128 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 20-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Keywords: Tax effect
• Section: 14A

Judgement Text

1 ITA.NO.1410/HYD/2016 M/S. SEVEN HILLS COOPERATIVE URBAN BANK LTD., HYDERABAD IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.1410/HYD/2016 ASSESSMENT YEAR 2012-2013 THE ACIT, CIRCLE-7(1) HYDERABAD. VS. M/S. SEVEN HILLS CO.OPERATIVE URBAN BANK LTD., HYDERABAD012. PAN AAAAS4904Q (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A. SITARAMA RAO FOR ASSESSEE : -NONE- DATE OF HEARING : 18.01.2017 DATE OF PRONOUNCEMENT : 28.02.2017 ORDER PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER PASSED BY CIT(A)-3, HYDERABAD AND IT PERTAINS TO THE A. Y. 2012-2013. THE ONLY GROUND URGED BY THE REVENUE READS AS UNDER : 2. THE LD. CIT(A) ERRED IN DELETING DISALLOWANCE OF R S.24,13,200 OUT OF TOTAL DISALLOWANCE OF RS.26,51,451 MADE BY INVOK ING THE PROVISIONS OF SECTION 14A R.W.R.8D DISREGARDING THE FACTS OF THE CASE. 2. IT MAY BE NOTICED THAT THE A.O, BY INVOKING THE PROVI SIONS OF SECTION 14A OF THE I.T. ACT, MADE AN ADDITION OF RS.26 ,51,451 OUT OF WHICH THE LD. CIT(A) SET ASIDE THE DISALLOWANCE OF RS .24,13,200 AND THE TAX THEREON WORKED-OUT TO LESS THAN RS.10 LAKHS. ACCORD ING TO THE LD. D.R, AN APPEAL IS MAINTAINABLE THOUGH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT PRESCRIBED IN CBDT CIRCULAR NO.21/2015 DATED 10 TH 2 ITA.NO.1410/HYD/2016 M/S. SEVEN HILLS COOPERATIVE URBAN BANK LTD., HYDERABAD DECEMBER, 2015, IF IT FALLS UNDER THE EXCEPTIONAL CLAU SES. ACCORDING TO HIM, THE BOARD CIRCULAR HAS BEEN IMPLIEDLY HELD TO B E ILLEGAL OR ULTRAVIRES BY WAY OF PARTIALLY ALLOWING THE APPEAL AND THEREFORE, THE APPEAL IS MAINTAINABLE. HOWEVER, AS COULD BE NOTICED FROM THE ORDER PASSED BY THE CIT(A), THE DELETION OF ADDITION IS BASED UPON THE FACT THAT THE A.O. HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT INTEREST BEARING FUNDS WERE UTILISED FOR THE PURPOSE OF MAKING INVESTMENTS. IN OTHERWORDS, THE CONCLUSION OF THE LD. CIT(A) WAS THAT O WN FUNDS WERE UTILISED FOR THE PURPOSE OF INVESTMENT AND THEREFORE, NO DISALLOWANCE CAN BE MADE UNDER SECOND LIMB OF RULE-8D. 3. NO MATERIAL WAS PLACED BEFORE US BY THE REVENUE TO CONTRADICT THE FINDINGS OF THE LD. CIT(A). UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE GROUNDS URGED BEFORE THE T RIBUNAL BY THE REVENUE ON BOTH THE COUNTS I.E., TAX EFFECT IS LESS THA N THE PRESCRIBED LIMIT SPECIFIED BY THE CBDT CIRCULAR AND ON FACTS, NO MATERIAL WAS PLACED TO CONTRADICT THE FINDINGS OF THE LD. CIT(A). ORDER PRONOUNCED IN THE OPEN COURT ON 28.02 .2017. SD/- SD/- (S. RIFAUR RAHMAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 28 TH FEBRUARY, 2017 VBP/- COPY TO 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1) , 8 TH FLOOR, ROOM NO.812, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 2. M/S. SEVEN HILLS COOPERATIVE URBAN BANK LTD., 15-9 -372/13, MAHABOOBGUNJ, SIDDIAMBER BAZAR, HYDERABAD 500 012 . 3. CIT(A)-3, HYDERABAD. 4. PR. CIT-3, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE.