M/s Anshul Goyal Land & Housing Ltd., Ludhiana V. DCIT, C-VII, Ludhiana

ITA 1427/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4987 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER MEENA
• Assessee Lawyers: PANKAJ BHALLA
• Keywords: Earning of tax free income; Additional evidence
• Section: 40A(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1427/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S ANSHUL GOYAL LAND & VS. THE DCIT HOUSING LTD. C-VII, LUDHIANA VILL- GILL, LUDHIANA PAN NO. AAFCA7899D ITA NO.1428/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S ANSHUL GOYAL VS. THE ACIT PLOT NO. 29/1, THE MALL C-VII, LUDHIANA LUDHIANA (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. PANKAJ BHALLA REVENUE BY : SHRI. SURINDER MEENA DATE OF HEARING : 22/05/2018 DATE OF PRONOUNCEMENT : 25/05/2018 ORDER PER BENCH: BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSES SEE AGAINST THE SEPARATE ORDER OF THE LD. CIT(A)-4, LUDHIANA. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS IN ITA NO. 1427/CHD/2017 FOR A.Y. 2010-11: 1. THAT THE LD. CIT(A)-4, LUDHIANA HAS ERRED IN PAS SING THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT(A)-4, LUDHIANA HAS ALSO ERRED I N CONFIRMING THE ADDITION OF RS. 9,30,000/- UNDER THE HEAD PAYMENT MADE IN CONTRAVE NTION MADE U/S 40A(3) OF THE INCOME TAX ACT, 1961 WITHOUT ANY BASE AND REASO NS THEREOF. 2 2.1 THAT THE LD. CIT(A) ERRED IN LAW AND FACTS IN R EFUSING TO ADMIT ADDITIONAL EVIDENCE U/S 46A OF THE INCOME TAX RULES, 1962 WHIC H GOES TO THE GRASS ROOT LEVEL OF THE MATTER, WITHOUT ANY BASE AND REASON THEREOF. 2.1 ASSESSEE HAS RAISED FOLLOWING GROUNDS IN ITA NO . 1428/CHD/2017 FOR A.Y. 2011-12: 1. THAT THE LD. C.I.T.(A)-IV, LUDHIANA HAS WRONGLY PASSED THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 AGAINST LAW AND FACTS O F THE CASE. 2. THAT THE LD. C.I.T.(A)-IV, LUDHIANA HAS ERRED IN CONFIRMING THE ADDITION OF RS.3,04,500/- U/S 40A(3) OF THE INCOME TAX ACT, 1961 WITHOUT ANY BASE AND REASONS THEREOF. 2.1 THAT THE LD. C.I.T(A) ERRED IN LAW & FACTS IN REFUSING TO ADMIT ADDITIONAL EVIDENCE U/S 46A OF THE INCOME TAX RULES, 1962 WHIC H GOES TO THE GRASS ROOT LEVEL OF THE MATTER, WITHOUT ANY BASE AND REASON THEREOF. 3. THAT THE LD. C.I.T (A) HAS ERRED IN CONFIRMING A N ADDITION OF RS. 2,26,398/- ON ACCOUNT OF DISALLOWANCE U/S 14A OF THE INCOME TA X ACT ,1961 READ WITH RULE 8-D OF THE INCOME TAX RULES , 1962 WITHOUT ANY BASE & REASONS THEREOF. 3.1 THAT THE C.I.T(A) HAS ERRED IN LAW & FACTS IN FAILI NG TO ADJUDICATE THAT NO DISALLOWANCE U/S 14A CAN BE MADE WHERE 'SATISFACTI ON' IS NOT RECORDED BY THE A.O . 3.2 THAT THE C.I.T(A) HAS ERRED IN LAW & FACT THAT DISA LLOWANCE U/S 14A CANNOT EXCEED THE EXEMPT INCOME. 3.3 WITHOUT PREJUDICE TO ABOVE DISALLOWANCE U/R 8D( 2)(III) I.E. 5% OF AVERAGE INVESTMENT CAN ALSO BE EXERCISED ONLY W.R.T TO INVE STMENT IN RELATION TO WHICH EXEMPT INCOME IS EARNED. 3. THE ASSESSEE HAS FILED THE APPEAL WHICH IS BARRE D BY LIMITATION BY TWO DAYS. THE ASSESSEE EXPLAINED THAT THE TWO DAY DELAY WAS DUE TO CALCULATION OF DATES FOR THE MONTHS OF JULY AND AUGUST BOTH OF WHI CH ARE 31 DAYS. HE RELIED ON THE JUDGMENT IN THE CASE OF COLLECTOR LAND ACQUISIT ION VS. MST KATIJI 1987 AIR 1353 WHEREIN IT WAS HELD THAT IF THE APPELLANT SATI SFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL WITH IN THE DUE DATE THE SAME CAN BE CONDONED. RESPECTFULLY FOLLOWING THE RATIO OF TH E JUDGMENT WE HEREBY CONDONE THE DELAY. 4. GROUND NO. 1 AND 2 OF ITA NO. 1427 AND 2 & 2.1 O F ITA NO. 1428/CHD/2017 ADDITION UNDER SECTION 40A(3) AND APPLICATION FOR ADMI SSION OF ADDITIONAL EVIDENCE : 5. THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFOR E THE LD. CIT(A) WHICH HAVE BEEN REFUSED TO BE ADMITTED. ON PERUSAL WE FIN D THAT THE ADDITIONAL 3 EVIDENCES CONSISTS OF CERTIFICATE REGARDING THE EXI STENCE OF BANK BRANCH AND SWORN AFFIDAVIT FROM THE SELLER OF THE PROPERTY. T HESE TWO EVIDENCES WILL GO TO THE ROOT OF THE MATTER INVOLVING ADDITION UNDER SEC TION 40A(3). HENCE THE SAME ARE HEREBY ADMITTED AND BEING THE EVIDENCES NOT TAK EN INTO CONSIDERATION BY THE LD. CIT(A) FOR ADJUDICATING THE ISSUE, THE SAME IS HEREBY REMANDED BACK TO THE FILE OF THE LD. CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE AND PASS A SPEAKING ORDER AFTER TAKING INTO CONSIDERATION THE MATERIAL FACTS AVAILABLE IN ACCORDANCE WITH THE LAW. 6. GROUND NO. 3 AND 2 OF ITA NO. 1427 AND 2 & 2.1 O F ITA NO. 1428/CHD/2017 ADDITION UNDER SECTION 14A 6.1 THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS. 2,26,398/- ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A AS THE AS SESSEE HAS INVESTED RS. 80,35,624/- IN SECURITIES WITH THE STOCK BROKER. ON PERUSAL OF THE RECORD (PARA 4.3 OF A.O) WE FIND THAT THE ASSESSING OFFICER HAS NOT FULFILLED THE REQUIREMENTS OF SECTION 14(2) PERTAINING TO NON SATISFACTION. THE A O HAS NOT GIVEN ANY REASON TO RE-COMPUTE THE DISALLOWANCE EXCEPT RELYING ON THE C IRCULAR NO. 5 OF CBDT 2014 WHEREIN IT WAS DIRECTED TO THE FIELD OFFICERS TO DI SALLOW AMOUNT UNDER SECTION 14A EVEN IF THE ASSESSEE HAS DERIVED NO EXEMPT INCO ME. THE APPLICABILITY OF CIRCULAR HAS BEEN NULLIFIED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. LAKHANI MARKETING (P&H HIGH COURT) . HENCE KEEPING IN VIEW THE JUDGMENT OF THE HONBLE HIGH COURT WE HEREBY DELETE THE ADDITION MADE UNDER SECTION 14A. 7. AS A RESULT THE APPEALS OF THE ASSESSEE IS HEREB Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25/05/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR