Mehar Chand Bhatia, Ludhiana V. ACIT, Ludhiana

ITA 1425/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6719 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTASR
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO . 1425/CHD/2016 ASSESSMENT YEAR : 2011-12 SHRI MEHAR CHAND BHATIA, VS. THE ACIT, 92, SURYA KIRAN COMPLEX, CIRCLE-VI, THE MALL, LUDHIANA. LUDHIANA. PAN NO. ABFPB7591M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURJEET SINGH RESPONDENT BY : SMT. CHANDER KANTA,SR.DR DATE OF HEARING : 31.08.2017 DATE OF PRONOUNCEMENT : 31.10.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 25.10.2016 OF LD.CIT (APPE ALS)-4 LUDHIANA PERTAINING TO 2011-12 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. BECAUSE THE ACTION FOR UPHOLDING THE DISALLOWANCE O F INTEREST (RS.18,24,686/-) BY INVOKING THE PROVISIONS OF SECTION 14A ARE BEING CHALLENGED ON FACTS AND LAW. 2. BECAUSE THE ACTION FOR DISALLOWANCE OF INTEREST U/S 14A IS MISAPPLICATION OF THE PRINCIPLES OF LAW AND A RESULT OF THE NON APPRE CIATION OF THE RATIO OF THE JUDGMENTS IN THE TRUE AND CORRECT SENSE. 3. THE LD. AR INVITING ATTENTION TO THE IMPUGNED ORDER SUBMIT TED THAT THE FINDINGS OF THE LD. CIT(A) IN THE FACTS OF THE PRESENT CAS E ARRIVED AT IN PARA 5.2 ARE CONTRARY TO THE SETTLED LEGAL POSITION AS C ONSIDERED BY VARIOUS HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT N AMELY CIT VS LAKHANI MARKETING INCL. (2014) 111 DTR 149 (P&H) AND DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS HOLCIM I NDIA PVT. LTD. 90 CCH 81 AND CHEMINVEST LTD.VS CIT 378 ITR 33. IN TH E FACTS OF THE PRESENT CASE, IT WAS HIS SUBMISSION THAT NO ADDITION BY WA Y OF DISALLOWANCE COULD HAVE BEEN MADE BY THE AO AS NO DIVID END INCOME HAD BEEN EARNED BY THE ASSESSEE. IT WAS HIS SUBMISSION THAT THE SAID ARGUMENT WAS ADVANCED BEFORE THE AO AND ALSO THE CIT(A ), HOWEVER, NO FINDING OF FACT HAD BEEN ARRIVED AT BY THEM. IN THE CIRCUM STANCES, IT WAS HIS PRAYER THAT EITHER THE ADDITION BE DELETED OR THE IS SUE BE RESTORED FOR VERIFICATION OF THIS LIMITED FACT. ITA 1425/CHD/2016 A.Y. 2011-12 PAGE 2 OF 2 4. THE LD. SR.DR RELIES UPON THE IMPUGNED ORDER. 5. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL A VAILABLE ON RECORD. IN THE FACTS OF THE PRESENT CASE, ADMITTEDLY THE AO HAS MADE THE ADDITION U/S 14A INVOKING RULE 8D WHICH WAS UPHELD BY THE CIT(A) IN APPEAL. IN THE FACTS OF THE PRESENT CASE, IT HAS BEEN ARGUED BY THE LD. AR THAT NO DIVIDEND INCOME HAS BEEN RECEIVED. THE FACT W HETHER THIS CLAIM IS CORRECT OR NOT IS NOT COMING OUT FROM THE RECORD . ACCORDINGLY, IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES, I DEEM IT APPRO PRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO VERIFY THE FACTUAL POSITION WHETHER ANY DIVIDEND INCOME HAS BEEN EARNED BY THE ASSESSEE IN THE YEAR UN DER CONSIDERATION OR NOT. IN CASE IT IS FOUND THAT NO DIVIDEND INCOME HAS B EEN EARNED BY THE ASSESSEE, THEN IN TERMS OF THE JUDICIAL PRECEDENT A S LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF HOLCIM INDIA PVT. LTD. 90 CCH 81 AND CHEMINVEST LTD.VS CIT 378 ITR 33 AND CIT VS LAKHA NI MARKETING INCL. OF THE HON'BLE PUNJAB & HARYANA HIGH COURT, NO ADD ITION BY WAY OF A DISALLOWANCE COULD BE MADE. IT MAY NOT BE OUT OF PLACE TO EVEN REFER TO DECISIONS OF THE HON'BLE GUJRAT HIGH COURT IN THE CASE OF CIT VS CORRTECH ENERGY P. LTD. (2015) 372 ITR 97. ACCORDINGLY, FOR THIS LIMIT ED PURPOSE, THE ISSUE IS SENT BACK TO THE FILE OF THE AO TO PASS A SP EAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONAB LE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.