M/s Sundesh Springs Pvt. Ltd., Ludhiana V. DCIT, CC-I, Ludhiana

ITA 1611/CHANDI/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5582 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S K MUKHI
• Keywords: Earning of tax free income; TDS
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1611/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S SUNDESH SPRINGS PVT. LTD. VS. THE DCIT D-138, PHASE-V CENTRAL CIRCLE-I FOCAL POINT, LUDHIANA LUDHIANA PAN NO. AACCS2723F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.K. MUKHI REVENUE BY : SH. MANJIT SINGH DATE OF HEARING : 23/08/2018 DATE OF PRONOUNCEMENT : 15-11-2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(A)-5 (HEREINAFTER REFERRED TO AS CIT(A)) DT. 03/08/2017. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN THREE EFFE CTIVE GROUNDS. GROUND NO. 1 IS GENERAL IN NATURE AND DOES NOT NEED ANY ADJUDI CATION. 3. IN SECOND GROUND OF APPEAL THE ASSESSEE HAS AGIT ATED THE CONFIRMATION OF THE ADDITION OF RS. 23,688/- ON ACCOUNT OF DISAL LOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING OF TAX EXEMPT INCOME. 4. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE H AS SUBMITTED THAT THE ASSESSEE DURING THE YEAR DID NOT EARN ANY TAX EXEM PT INCOME. THE ISSUE, ADMITTEDLY, IS SQUARELY COVERED BY VARIOUS DECISION S OF THE HIGH COURT INCLUDING THAT OF JURISDICTIONAL PUNJAB AND HARYANA HIGH COUR T IN THE CASE OF CIT FARIDABAD V. LAKHANI MARKETING INC 226 TAXMANN 45 ( P&H) AND ALSO BY THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CHE MINVEST LTD. VS. CIT (2015) 378 ITR 33 (DEL) AND FURTHER OF THE HONBLE ALLAHAB AD HIGH COURT IN THE CASE OF CIT VS. M/S SHIVAM MOTORS (P) LTD. (2014) 272 CTR 2 77 (ALL) WHEREIN THE HONBLE HIGH COURTS HAVE BEEN UNANIMOUS TO HOLD THAT DISALL OWANCE UNDER SECTION 14A 2 CANNOT EXCEED TO TAX EXEMPT INCOME EARNED BY THE AS SESSEE. SINCE FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE DID NOT EARN ANY TAX EXEMPT INCOME, HENCE NO DISALLOWANCE ON THIS ISSUE IS WARRANTED AN D IMPUGNED ADDITION MADE ON THIS ISSUE IS HEREBY DELETED. 5. GROUND NO. 3 IS IN RELATION TO THE DISALLOWANCE OF RS. 20,49,484/- FOR NON DEDUCTION OF TDS UNDER THE PROVISIONS OF SECTION 40 (A)(IA) OF THE ACT. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE PAYEES OF THE AMOUNT IN QUESTION HAVE TAKEN INTO CONSIDERATION TH E AFORESAID RECEIPTS FROM THE ASSESSEE IN THEIR RETURN OF INCOME. HOWEVER THE ASSESSEE DUE TO SOME UNAVOIDABLE CIRCUMSTANCES COULD NOT FURNISH THE CER TIFICATE OF ACCOUNTANT OF THE PAYEES IN THIS RESPECT. HE HAS THEREFORE REQUES TED THAT THE ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER BEFORE WHOM TH E ASSESSEE WILL PROVIDE THE NECESSARY CERTIFICATE CERTIFYING THAT THE PAYEES HA VE TAKEN INTO ACCOUNT THE PAYMENTS MADE BY THE ASSESSEE IN THEIR RETURN OF I NCOME AND HAVE PAID DUE TAXES ACCORDINGLY. 7. IN VIEW OF THE ABOVE SUBMISSION OF THE LD. COUNS EL OF THE ASSESSEE, THE ISSUE IN GROUND NO. 3 IS RESTORED TO THE FILE OF TH E ASSESSING OFFICER. IF ASSESSEE WILL BE ABLE TO FURNISH THE NECESSARY DETAILS / CERTIFIC ATES AS NOTED ABOVE THEN NO DISALLOWANCE WILL BE ATTRACTED ON THIS ISSUE. THE A SSESSING OFFICER IS THEREFORE DIRECTED TO DECIDE THE ISSUE ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15/11/2018 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR