M/S J.M.Textiles (P) Ltd, Kolkata V. I.T.O.,Ward-11(2), Kolkata

ITA 1592/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3909 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 02-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

1 ITA NO. 1592/KOL/2019 J. M. TEXTILES PVT. LTD., AY- 2014-15 , A(SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL A(SMC) BENCH : KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] ITA NO.1592/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. J. M. TEXTILES PVT. LTD. (PAN: AAACJ6507C) VS. INCOME-TAX OFFICER, WD-11(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 20.11.2019 DATE OF PRONOUNCEMENT 27.11.2019 FOR THE APPELLANT SHRI SUNIL SURANA, FCA FOR THE RESPONDENT SHRI JAYANTA KHANRA, JCIT, SR. D R ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-4, KOLKATA DATED 23-01-2019 FOR THE ASSESSMENT YEAR 2014-15. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SHRI SUNIL SURANA SUBMITTED THAT HE IS NOT PRESSING THE SECOND GROUND OF APPEAL PREFERRED BY THE ASSESSEE, THEREFORE, THE GROUND NO.2 OF THE ASSESSEE STANDS DISMISSED BEING NOT PRE SSED. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO BROUGH T TO OUR NOTICE THAT THE GROUND NO.1 IS REGARDING THE DISALLOWANCE MADE BY THE AO APPLYI NG SECTION 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) READ WI TH RULE 8D OF THE INCOME-TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES). ACCORDIN G TO LD. COUNSEL, THE ASSESSEE DID NOT RECEIVE ANY DIVIDEND INCOME, THEREFORE, RELYING UPO N THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. M/S. ASHIKA GLOBAL SEC URITIES LTD. IN ITAT 100 OF 2014, GA 2122 OF 2014 DATED 11.06.2018 CONTENDED THAT NO DIS ALLOWANCE U/S. 14A WAS WARRANTED IN THE FACTS OF THE CASE AND, THEREFORE, THE ORDER OF THE AO/LD. CIT(A) IS ERRONEOUS. 4. AFTER HEARING THE RIVAL SUBMISSIONS AND HAVING G ONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE WE NOTE THAT THE AO HAS A CKNOWLEDGED [IN THE ASSESSMENT ORDER AT PAGE 1] THAT ASSESSEE HAS NOT DERIVED ANY DIVIDEND INCOME. DESPITE THAT HE APPLIED RULE 8D READ WITH SEC. 14A TO COMPUTE THE DISALLOWANCE U/S 14A OF THE ACT, WHICH HE OUGHT NOT TO 2 ITA NO. 1592/KOL/2019 J. M. TEXTILES PVT. LTD., AY- 2014-15 HAVE DONE, SINCE THE ASSESSEE DID NOT EARN ANY EXEM PT INCOME. ACCORDING TO ME, SECTION 14A DISALLOWANCE WAS NOT WARRANTED SINCE THE ASSESS EE DID NOT EARN ANY EXEMPT INCOME, WHICH VIEW HAS BEEN UPHELD BY THE HONBLE CALCUTTA HIGH COURT IN ASHIKA GLOBAL SECURITIES LTD. (SUPRA) AND, THEREFORE, WE DIRECT D ELETION OF THE ADDITION OF RS.11,87,028/-. 5. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH NOVEM BER, 2019. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED :27TH NOVEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. J. M. TEXTILES PVT. LTD., R. NO . 301/A/4, AVANTI SIGNATURE, 91A/1, PARK STREET, KOLKATA-700 016. 2 RESPONDENT ITO, WARD-11(2) , KOLKATA. 3. 4. 5. CIT(A)-4, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR