M/S RAJASTHAN LAND HOLDING LTD., JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, AJMER

ITA 171/JPR/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5978 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWAR SINGH JCIT DHK
• Keywords: Unexplained cash credit; Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 171/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 M/S RAJASTHAN LAND HOLDING LTD., 1 ST FLOOR, LIC JEEVAN NIDHI BUILDING, AMBEDKAR CIRCLE, BHAWANI SINGH ROAD, JAIPUR-202005. CUKE VS. THE ACIT , CIRCLE-6, AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: A ADCR 9971 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (DATE NOTED) JKTLO DH VKSJ LS@ REVENUE BY : SHRI BHAWAR SINGH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/09/2019 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT: 25 /09/2019 VKNS'K@ ORDER PER: SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), AJMER DATED 14.12.2018 FOR THE ASSESSMENT YEAR 2014-15 ON THE GROUNDS MENTIONED HEREINBELOW: - 1. THAT THE ORDER PASSED BY LD. ASSESSING OFFICER AND LD. CIT(A) II, IS BAD IN LAW AS WELL AS FACTS. 2. THAT THE LD. ASSESSING OFFICER HAS ERRED AND LD. CIT (APPEALS) II HAS ALSO ERRED IN NOT CONSIDERING THE FACTS OF THE CASE AND MECHANICALLY APPLYING SECTION 14A OF I.T. ACT, 1961 READ WITH THE PROVISIONS OF RULE 8D OF THE I.T. RUL ES, 1961 ITA NO. 171/JP/2019 M/S RAJASTHAN LAND HOLDING LTD. VS. ACIT 2 AND DISALLOWING RS. 20,67,741/- UNDER SECTION 14A O F THE INCOME TAX ACT, 1961. THE APPELLANT PRAYS THAT CONS IDERING THE FACTS AND THAT NO EXEMPT INCOME HAS BEEN EARNED , THE DETERMINATION OF THE AMOUNT AT RS. 20,67,741/- U/S 14A READ WITH RULE 8D(2) IS NOT JUSTIFIED AND BE DELETED. 3. THAT THE APPELLANT RESERVES HIS RIGHT TO ADD, AL TER, AMEND, AND DELETE ALL OR ANY GROUNDS BEFORE OR AT ANYTIME OF HEARING. THAT THE INITIATION OF RE-ASSESSMENT PROCEEDINGS BY ISSUING NOTICE UNDER SECTION 148 IS ILLEGAL, ARBITRARY AND AD-INITIO VOID. 2. THAT THE RE-ASSESSMENT ORDER DATED IS PER SE ILL EGAL, ARBITRARY AND RUNS COUNTER TO THE SETTLED PROPOSITI ON OF LAVI. 3. THAT THE COMMISSIONER OF INCOME TAX APPEAL AS GR OSSLY ERRED IN SUSTAINING THE ADDITION OF RS. 4,00,000/- MADE ON A/C OF UNEXPLAINED CREDITORS. 2. AT THE OUTSET, WE NOTICED THAT NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. FROM THE ORDER SHEET, WE NOTICED T HAT THE DATE OF HEARING WAS NOTED BY THE ASSESSEE/REPRESENTATIVE. HOWEVER, TODAY NOBODY HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED FOR HEARING. ON THE CONTRARY, THE L D. DR PRESENT IN THE COURT IS READY WITH ARGUMENT. THEREFORE, IN THI S CIRCUMSTANCE, THERE IS NO OPTION EXCEPT TO PROCEED WITH THE HEARI NG OF THE CASE EX-PARTE. ITA NO. 171/JP/2019 M/S RAJASTHAN LAND HOLDING LTD. VS. ACIT 3 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF LAND BANKING ACTIVITY AND THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERING WAS FILED ON 25.09.2014 DECL ARING TOTAL INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTI NY AND AFTER SERVING STATUTORY NOTICES AND SEEKING REPLY OF THE ASSESSEE, THE ORDER OF ASSESSMENT U/S 143(3) OF THE I. T. ACT WAS PASSED ON 10.12.2016 THEREBY MAKING ADDITIONS/DISALLOWANCES U /S 14A OF THE INCOME TAX ACT. 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PRE FERRED THE APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONS IDERING THE MATERIAL ON RECORD OF BOTH THE PARTIES, DISMISSED T HE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSES SEE FILED THE PRESENT APPEAL BEFORE US. 6. WE HAVE HEARD LD. DR AND CONSIDERED THE MATERIAL PLACED ON RECORD AS WELL AS ORDERS PASSED BY REVENUE AUTHORIT IES. WE NOTICED FROM THE RECORD THAT THE ASSESSEE HAS TAKEN A CATEGORICALLY STAND THAT THE AO HAD ERRED IN MECHANICALLY APPLYIN G SECTION 14A OF THE I. T. ACT READ WITH THE PROVISIONS OF RULE 8D AND MADE ITA NO. 171/JP/2019 M/S RAJASTHAN LAND HOLDING LTD. VS. ACIT 4 DISALLOWANCE U/S 14A OF THE ACT. IT WAS MENTIONED T HAT NO EXEMPT INCOME HAD BEEN EARNED BY THE ASSESSEE. THEREFORE, DETERMINATION OF THE AMOUNT AT RS. 20,67,741/- U/S 14A R.W.R. 8D OF THE INCOME TAX IS NOT JUSTIFIED. WE HAVE ALSO G ONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE L D. CIT(A) WHICH ARE AT PARAR 4.2 IN THE ORDER OF LD. CIT(A) WHEREI N THE ASSESSEE HAD SPECIFICALLY MENTIONED THAT THE ASSESSEE HAD NO T EARNED ANY EXEMPT INCOME. IT IS SETTLED PROPOSITION OF LAW TH AT IN THE ABSENCE OF ANY EXEMPT INCOME, DISALLOWANCE U/S 14A OF THE A CT IS NOT WARRANTED. IN THIS ASPECT, WE RELY UPON THE DECISIO N OF HONBLE DELHI HIGH COURT IN CASE OF CHEMINVEST LTD. VS. CIT (2015) 378 ITR 33 AND THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF MAXOPP INVESTMENT LTD. VS LD. LD. CIT, 402 ITR 640. CONSIDERING THE SETTLED PROPOSITION OF LAW, WE ARE OF THE VIEW THAT INTEREST OF JUSTICE WOULD BE MET IF THIS ISSUE IS RESTORED BAC K TO THE FILE OF AO WITH A DIRECTION TO VERIFY AS TO WHETHER THE ASSES SEE HAS EARNED EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION O R NOT AND IN THE CASE, AO COMES TO THE CONCLUSION THAT NO EXEMP T INCOME WAS EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSI DERATION THEN ITA NO. 171/JP/2019 M/S RAJASTHAN LAND HOLDING LTD. VS. ACIT 5 IN THAT EVENTUALITY NO DISALLOWANCE U/S 14A OF THE ACT IS WARRANTED. WITH THESE DIRECTIONS, WE ALLOW THE GROUND OF APPEA L FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 25 /09/2019 . SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/09/2019. *SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S RAJASTHAN LAND HOLDING LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-6, AJMER. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 171/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR