ITO, New Delhi V. M/s. Kama Holdings Ltd, New Delhi

ITA 1555/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7717 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARTA TRANA
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : D NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUN TANT MEMBER ITA NO: 1555/DEL/2014 AY : - 2009-10 THE INCOME TAX OFFICER, VS. M/S. KAMA H OLDINGS LTD. WARD 5 (1) C-8, COMMERCIAL COMPLEX, NEW DELHI. SAFDARJUNG DEVELOPMENT AREA, NEW DELHI 110 016. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RASHMITA JHA, SR.DR RESPONDENT BY : ARTA TRANA PANDA, ADVOCATE DATE OF HEARING : 04.05.2016 DATE OF PRONOUNCEMENT : 11 .05.2016 O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMEBR THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XI, NEW DELHI DATED 30.10.2013 FOR THE ASSESSMENT YEAR 2009-10 ON THE F OLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITIONAL DISALLOW ANCE MADE U/S 14A TO RS. 1,08,59,701/- AND ALLOWING RELIEF OF RS. 5,18,61,29 9/- TO THE ASSESSEE WITHOUT APPRECIATING THE PROVISION OF RULE 8D ? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE COMPUTED UNDER RULE 8D(2)(II) ITA NO. 1555/DEL/2014 ITO VS. M/S. KAMA HO LDINGS LTD. 2 20X5 AMOUNTING TO RS. 6,06,19,000/- MADE BY THE AO AND A CCEPTING THE WORKING OF THE ASSESSEE OF DISALLOWANCES AT RS. 87, 58,151/- UNDER RULE 8D(2)(I), IGNORING THE FACT THAT THE PROVISION OF R ULE 8D DOES NOT MAKE ANY SUCH DISTINCTION? 2. AFTER HEARING RIVAL CONTENTIONS WE HOLD AS FOLLO WS : 3. GROUND NO. 1 AND 2 ARE ON THE ISSUE OF QUANTUM O F DISALLOWANCE U/S 14A. GROUND NO. 3, 4 AND 5 ARE GENERAL IN NATUR E. 4. THE FIRST APPELLATE AUTHORITY AT PAGE 8 OF HIS ORDER HELD AS FOLLOW: HOWEVER, THE APPELLANT HAS OBJECTED THE DISALLOWAN CE UNDER RULE 8D(2)(II) OF THE IT RULES, SINCE IT HAS ALREADY BEEN ACCEPTED B Y THE AO THAT BEFORE 31 ST MARCH, 2005, AN AMOUNT OF RS. 875.04 LAC HAS BEEN U TILISED FOR INVESTMENT AND REMAINING LOAN WAS FOR BUSINESS PURPOSES. SINCE THEN NO NEW INVESTMENT IN SHARES HAS BEEN MADE BY THE APPELLANT AND VARIOU S LOANS OBTAINED BY THE APPELLANT HAVE BEEN UTILISED FOR SPECIFIC PURPOSE O F BUSINESS WORKING CAPITAL REQUIREMENT. THE APPELLANTS ARGUMENT HAVE FORCE AN D IT IS UNDISPUTED THAT THE AO HAD DETERMINED IN AY 2006-07, THE LOAN AMOUN T OF RS. 857.04 LAC UTILISED FOR INVESTMENT IN SHARE OUT OF TOTAL BORRO WINGS OF RS. 4612.12 LAC AND SAME HAS BEEN FOLLOWED IN AY 2007-08 AS THE QUANTUM OF INVESTMENT IN SHARES REMAINED UNCHANGED. THE FACTS BEING THE SAME DURING THE YEAR UNDER CONSIDERATION AND THE AMOUNT OF DISALLOWANCE HAS AL READY BEEN DISALLOWED BY THE APPELLANT UNDER RULE 8D(2)(I) OF IT RULES, THER E REMAINS NO JUSTIFICATION FOR MAKING FURTHER DISALLOWANCE UNDER RULE 8D(2)(II ) OF IT RULES. 5. WE FIND THAT THE AO HAS PASSED ORDERS ON THE DI RECTIONS OF THE HONBE DELHI HIGH COURT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO. 720/2011 ORDER DATED 2.12.2 011. THE AO HAS ACCEPTED IN THE EARLIER YEARS ORDERS THAT THE LOAN AMOUNT OF RS. 857.04 LACS ONLY WAS UTILISED FOR INVESTMENT OF SHARES OUT OF THE TOTAL BORROWINGS OF RS. 4612.12 LACS . HE DID NOT FIND ANY FAULT WITH ITA NO. 1555/DEL/2014 ITO VS. M/S. KAMA HO LDINGS LTD. 3 20X5 THE QUANTUM OF DISALLOWANCE MADE BY THE ASSESSEE. T HE FACTS AND CIRCUMSTANCES BEING SAME DURING THE IMPUGNED ASSESS MENT YEAR WE FIND NO INFIRMITY IN THE ORDER OF THE FIRST APPELL ATE AUTHORITY. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.05.2016. SD/- SD/- (H.S. SIDHU) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: THE 11.05.2016 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR