Dusters Total Solutions Services Pvt. Ltd., Bangalore V. Income Tax Officer, Bangalore

ITA 1416/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5504 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 10-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K BIJU JT BENGALURU
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ITA NO.1416/BANG/2014 ASSESSMENT YEAR : 2013-14 DUSTER TOTAL SOLUTIONS SERVICES PVT. LTD., NO.50, 4 TH FLOOR, ZATAKIA CENTER, INDIRANAGAR, BANGALORE. PAN: AACCD 5989D VS. THE INCOME TAX OFFICER, WARD 2(1)(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI M.K. BIJU, JT.CIT(DR)(ITAT-3), BENGALURU DATE OF HEARING : 18.04.2017 DATE OF PRONOUNCEMENT : 21.04.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS)- 2 DATED 15.06.2016 FOR THE ASSESSMENT YEAR 2013-14 IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) FAILED TO APPRECIATE THAT SECTION 14 A SHOULD BE APPLIED ONLY WHEN THERE IS AN EXEMPTED INCOME EARNE D OUT ITA NO. 1416/BANG/2016 PAGE 2 OF 3 OF INVESTMENT AND NOT OTHERWISE. THE APPELLANT HAD NOT EARNED EXEMPTED INCOME DURING THE AY 2013-14. 3. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT I N THE CASE OF APPELLANT, THE AMOUNT INVESTED IN THE SUBSIDIARIES WAS MET OUT OF THE ACCUMULATED RESERVES AND SURPLUS. THE RE SERVES & SURPLUS AVAILABLE WAS MORE THAN THE SHORT TERM BORROWINGS. HENCE, THERE WAS NO MONEY DIVERTED OUT OF THE BORROWED FUNDS. THE APPELLANT RELIES ON THE DEC ISION IN THE CASE OF DC IT V MICROLABS LTD, ITAT BANGALORE (62 TAXMANN.COM 60) WHERE IT HAS BEEN STA TED THAT AVAILABILITY OF PROFIT, SHARE CAPITAL AND RESE RVES & SURPLUS ARE MUCH MORE THAN THE INVESTMENTS MADE BY THE ASSESSEE WHICH COULD YIELD TAX FREE INCOME, THEN TH E DISALLOWANCE OF INTEREST EXPENSE U/S 14A IS NOT JUS TIFIED. 4. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE INVESTMENT WAS MADE BY THE APPELLANT IN ITS SUBSIDI ARIES AND WAS ON ACCOUNT OF BUSINESS STRATEGY AND NOT TO EARN EXEMPTED INCOME. HENCE, TO CARRY OUT THE SAME LINE OF BUSINESS THE INVESTMENT WAS MADE IN THE SUBSIDIARY. ACCORDINGLY, THIS INVESTMENT SHOULD NOT BE COMPARED WITH THE OTHER EXEMPTED INVESTMENT FOR DISALLOWANCE U/S 14A. 5. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS/ ARGUMENTS AT THE TIME OF HEARING. 2. THIS APPEAL WAS LISTED FOR HEARING ON 18.04.2017 , BUT NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE SERVICE OF THE NOTICE OF HEARING. AD CARD IS PLACED ON RECORD. SINCE THE AS SESSEE DID NOT APPEAR, WE HAVE NO OPTION, BUT TO HEAR THE APPEAL EX PARTE, QUA THE ASSESSEE. ACCORDINGLY, THE REVENUE WAS HEARD. 3. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE CIT( APPEALS) ON THE IMPUGNED GROUNDS AND WE FIND THAT HE HAS RIGHTLY AD JUDICATED THE ISSUES IN ITA NO. 1416/BANG/2016 PAGE 3 OF 3 DETAIL AND WE FIND NO INFIRMITY THEREIN. ACCORDING LY, WE CONFIRM THE ORDER OF CIT(APPEALS). 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF APRIL, 2017. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 21 ST APRIL, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.