Meghmani Organics Limited, Ahmedabad V. The Dy.CIT (OSD)-1, Circle-4, Ahmedabad

ITA 1589/AHD/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0789 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 115JB; 10B

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1589/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) MEGHMANI ORGANICS LTD. PLOT NO. 183-184, PHASE II, GIDC, VATVA, AHMEDABAD- 382 445 / VS. DCIT, (OSD)-1, CIRCLE-4, AHMEDABAD ./ ./ PAN/GIR NO. : AAB CM0 644 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : URVASHI SODHAN, A.R. / RESPONDENT BY : G. C. DAXINI, SR. DR / DATE OF HEARING 14/03/2019 !'# / DATE OF PRONOUNCEMENT 27/03/2019 $%/ O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-2, AHMEDAB AD (CIT(A) IN SHORT), DATED 27.02.2015 ARISING IN THE ASSESSMENT ORDER DATED 28.02.2014 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) R.W.S 144C OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNI NG A.Y. 2010-11. ITA NO.1589/AHD/2015 [MEGHMANI ORGANICS LTD. VS. DCIT] A.Y. 2010-11 - 2 - 2. GROUND NO. 1 TO 9 CONCERNS DISALLOWANCE U/S. 14 A READ WITH RULE 8D OF THE INCOME TAX RULES. THE LD. AR FOR TH E ASSESSEE SUBMITTED THAT THE EXEMPT INCOME IS PAGGED AT RS. 3 ,14,117/- ONLY AND THEREFORE THE DISALLOWANCE UNDER 14A CANNOT EXCEED THE AFORESAID AMOUNT. WE FIND MERIT IN THE PLEA OF THE ASSESSEE IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. ENERGY CORRTECH PVT. LTD. 372 ITR 97 AND DCIT VS. T GB BANQUETS HOTELS LTD. IN TAX APPEAL NO. 470 OF 2012 DATED 21. 06.2016 (GUJARAT). THEREFORE THE AO HAS DIRECTED TO RESTRI CT THE DISALLOWANCE U/S. 14A TO THE EXTENT OF EXEMPT INCOME. IN THE RE SULT, GROUND NO. 1 TO 9 IS PARTLY ALLOWED AND DISPOSED IN TERMS OF ABOVE. 3. GROUND NO. 10 CONCERNS DISALLOWANCE IN RESPECT O F DEDUCTION UNDER 10B OF THE ACT. AT THE TIME OF HEARING, THE LD. AR FOR THE ASSESSEE FAIRLY SUBMITTED THAT SHE DOES NOT SEEK TO PRESS THE AFORESAID GROUND. CONSEQUENTLY GROUND NO. 10 IS DISMISSED AS NOT PRESSED. 4. GROUND NO. 11 CONCERNS DISALLOWANCE OF RS. 6, 17,972/- IN RESPECT OF LTCG. WITH THE ASSISTANCE OF THE LD. AR OF THE ASSESSEE, WE HAVE PERUSED OF THE ORDER OF THE CIT(A) AND WE D O NOT FIND ANY INFIRMITY THEREIN. THEREFORE, WITHOUT REPEATING TH E FINDINGS OF THE CIT(A), WE DECLINE TO INTERFERE. GROUND NO. 11 IS THEREFORE DISMISSED. 5. GROUND NO. 12 TOWARDS ADDITION OF UPWARD ADJUSTM ENT IS DISMISSED AS NOT PRESSED. ITA NO.1589/AHD/2015 [MEGHMANI ORGANICS LTD. VS. DCIT] A.Y. 2010-11 - 3 - 6. GROUND NO. 13 CONCERNS ADDITIONS IN THE BOOK PRO FIT COMPUTED U/S. 115JB OF THE ACT ON ACCOUNT OF DISALLOWANCE U/ S. 14A OF THE ACT. IN VIEW OF THE LONG LINE OF JUDICIAL PRECEDENTS INC LUDING THE DECISION OF THE SPECIAL BENCH IN ACIT VS. VIREET INVESTMENTS LTD. 165 ITD 27 (SB), WE FIND MERIT IN THE PLEA OF THE ASSESSEE. T HE AO IS ACCORDINGLY DIRECTED TO DELETE THE ADDITION TO THE BOOK PROFIT ON THIS SCORE. GROUND NO. 13 IS ACCORDINGLY ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 27/03/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT ON 27/0 3/2019