The DCIT, (OSD)-I, Circle-4, Ahmedabad V. M/s. Kargil Holdings Pvt. Ltd., Ahmedabad

ITA 1459/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6197 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Earning of tax free income; Retrospective amendment; Tax effect
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 1459/AHD/2015 WITH CO NO. 177/AHD/2015 (ASSESSMENT YEAR: 2011- 12) ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2), 1 ST FLOOR, NAVJIVAN TRUST BUILDING, AHMEDABAD-380 009 APPELLANT VS. M/S. KARGIL HOLDING PVT. LTD., NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD 380 009 RESPONDENT/CROSS OB JECTOR PAN: AAACK4645G /BY REVENUE : SHRI DINESH SINGH, SR. D.R. /BY ASSESSEE : SHRI HIMANSHU SHAH, A.R. /DATE OF HEARING : 29.01.2018 /DATE OF PRONOUNCEMENT : 30.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTION FOR ASSESSMENT YEAR 2011-12 ARISE AGAINST THE CIT(A)-2, AHMEDABADS ORDER DATED 02.03.2015 IN CASE NO. CIT(A)-2/DCIT (OSD)-1, CIR.4/189/2013-14, PARTLY UPHOLDING ASSESSING OFFICERS ACTION MAKING SECTION 14A R.W. RULE 8D DISALLOWANCE OF ITA NO. 1459/AHD/15 WITH 177/AHD/15 [M/S. KARGIL HO LDING PVT. LTD.] A.Y. 2011-12 - 2 RS.20,91,588/- TO THE EXTENT OF RS.1,24,000/- ONLY PERTAINING TO ADMINISTRATIVE EXPENDITURE @.5%, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE REVENUES SOLE SUBSTANTIVE GROUND SEEKS TO REVIVE DISALLOWANCE OF INTEREST EXPENDITURE AMOU NTING TO RS.19,67,223/- MADE BY THE ASSESSING OFFICER AS DELETED IN LOWER A PPELLATE PROCEEDINGS. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THE NET TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN RS.10 LACS. WE FIN D THAT THE CENTRAL BOARD OF DIRECT TAXES; HEREAFTER THE BOARD HAS ISSUED THE C IRCULAR NO. 21/2015 DATED 10.12.2015 CLEARLY ENVISAGING THEREIN THAT DEPARTME NTS PENDING APPEALS BEFORE THE TRIBUNAL/HIGH COURTS ARE TO BE WITHDRAWN/NOT PR ESSED AS PER THE ABOVE STATED CIRCULAR. THE SAME HAS BEEN DECLARED TO BE HAVING RETROSPECTIVE EFFECT IN OTHER WORDS. WE TAKE INTO CONSIDERATION THE ABOVE STATED BOARDS CIRCULAR AND DISMISS THE INSTANT APPEAL ACCORDINGLY. THE REVENU ES APPEAL ITA NO.1459/AHD/2015 IS DISMISSED FOR INVOLVING LOW TAX EFFECT. 3. WE ADVERT TO ASSESSEES CROSS OBJECTION NO.177/AHD/ 2015 SEEKING TO REVERSE BOTH THE LOWER AUTHORITIES ACTION DISALLOW ING ADMINISTRATIVE EXPENDITURE OF RS.1,24,000/- UNDER RULE 8D(2)(III) OF THE INCOME TAX RULES AS PERTAINING TO THE EXEMPT INCOME IN QUESTION IN THE NATURE OF DIVIDEND TO THE TUNE OF RS. 1,81,76,516/-. WE NOTICE THAT THE CIT( A) HAS ALREADY ENTERED INTO A DETAILED DISCUSSION THAT THE ASSESSEE HAS INCURRED INDIRECT ADMINISTRATIVE EXPENDITURE IN REVIEWING ITS INVESTMENTS/MAINTAININ G ACTIVITIES OF THE STOCK HOLDING ACTIVITY IN THE RELEVANT PREVIOUS YEAR. LEA RNED COUNSEL FAILS TO DISPUTE THE FACT THAT THE ABOVE COMPUTATION FORMULA PRESCRI BED UNDER RULE 8D OF THE INCOME TAX RULES IS APPLICABLE FROM ASSESSMENT YEAR 2008-09 ONWARDS. WE THEREFORE SEE NO REASON TO INTERFERE WITH THE IMPUG NED ADMINISTRATIVE ITA NO. 1459/AHD/15 WITH 177/AHD/15 [M/S. KARGIL HO LDING PVT. LTD.] A.Y. 2011-12 - 3 EXPENDITURE DISALLOWANCE. THE SAME STANDS CONFIRME D. ASSESSEES CROSS OBJECTION FAILS ACCORDINGLY. 4. THE REVENUES APPEAL ITA NO.1459/AHD/2015 AS WELL AS ASSESSEES CROSS OBJECTION I.E. C.O. NO.177/AHD/2015 ARE THERE FORE DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF JANUARY , 2018.] SD/- SD/- (PRADIP KUMAR KEDIA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 30/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0