NELSUN PAPER MILL LIMITED, CHENNAI V. ITO CORPORATE WARD 4(4), CHENNAI

ITA 1712/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3306 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 30-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Keywords: Earning of tax free income
• Section: 14A; 250

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! '!# $ , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ! ./ ITA NOS.1711 & 1712/CHNY/2019 & /ASSESSMENT YEARS: 2014-15 & 2015-16 M/S. NELSUN PAPER MILL LIMITED (FORMERLY KNOWN AS KGS NELSUN PAPER MILL PRIVATE LIMITED) KGS CORPORATE HOUSE NO.43, BESANT AVENUE ROAD, ADYAR, CHENNAI 600 020. [PAN: AAACN 2359J] VS. INCOME TAX OFFICER, CORPORATE WARD-4(4), CHENNAI 600 034 ( ' /APPELLANT) ( ()' /RESPONDENT) ! ./ ITA NO.1420/CHNY/2019 & /ASSESSMENT YEAR: 2015-16 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-4(2), CHENNAI 600 034 VS. M/S. KGS NELSUN PAPER MILL LIMITED NO.43, BESANT AVENUE ROAD, ADYAR, CHENNAI 600 020. [PAN: AAACN 2359J] ( ' /APPELLANT) ( ()' /RESPONDENT) ASSESSEE BY : MR. G. BASKAR & MR. I. DINESH, ADVOCATES DEPARTMENT BY : MS. R. ANITHA, JCIT * + ,- /DATE OF HEARING : 28.11.2019 ./& + ,- / DATE OF PRONOUNCEMENT : 28.11.2019 0 / O R D E R ITA NOS.1711 & 1712/CHNY/2019 & I.T.A. NO.1420/CHNY /2019 :- 2 -: PER SHRI GEORGE MATHAN, JUDICIAL MEMBER : ITA NOS.1711 & 1712/CHNY/2019 ARE APPEALS FILED BY THE ASSESSEE IN THE CASE OF M/S. NELSUN PAPER MILL LIMITED, CHENNAI AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-8, CHE NNAI (HEREINAFTER CALLED AS CIT(A)) IN APPEAL NOS. ITA NOS.59 & 289/16-17 DATED 12.03.2019 FOR THE ASSESSMENT YEARS 2014-15 & 2015-16. ITA NO.1420/CH NY/2019 IS AN APPEAL FILED BY THE REVENUE IN THE CASE OF M/S. KGS NELSUN PAPER MILL LIMITED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-8, CHENNAI, IN I.T.A NO.65/17-18 DATED 20.03.2019 FOR THE ASSESSMENT YEAR 2015-16. AS ALL THESE APPEALS ARE INTER-CONNECTED AND INVOLVE IDENTICAL ISSUES, THEY HAVE BEEN DISPOSED OF BY THIS COMMON O RDER. 2. MR. G. BASKAR & MR. I. DINESH, ADVOCATES REPRESENTED ON BEHALF OF THE ASSESSEE AND MS. R. ANITHA, JCIT REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRE SENTATIVE THAT THE ONLY ISSUE IN THE ASSESSEES APPEALS WAS AGAINST THE ACT ION TAKEN BY THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE MADE BY THE A SSESSING OFFICER BY INVOKING THE PROVISION OF SECTION 14A OF THE INCOME TAX ACT, 1961. IT WAS A SUBMISSION THAT THE ASSESSEE HAS NOT EARNED EXEMPT INCOME AND CONSEQUENTLY IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, (CENTRAL)-1 , CHENNAI VS. CHETTINAD LOGISTICS (P.) LTD., REPORTED IN [2017] 80 TAXMANN. COM 221 (MADRAS), WHEREIN IT HAS BEEN HELD THAT WHERE NO EXEMPT INCOME WAS EARNE D IN THE RELEVANT ITA NOS.1711 & 1712/CHNY/2019 & I.T.A. NO.1420/CHNY /2019 :- 3 -: ASSESSMENT YEARS BY THE ASSESSEE, SECTION 14A OF TH E INCOME TAX ACT, 1961 COULD NOT BE INVOKED. IT WAS A SUBMISSION THAT THE SAID DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO BEEN AFFIRMED BY THE HONBLE SUPREME COURT BY DISMISSAL OF THE SLP REPORTED IN [2018] 95 TAXMANN.COM 250 (SC). 4. THE LEARNED AUTHORIZED REPRESENTATIVE DREW OUR A TTENTION TO THE ASSESSMENT ORDER, WHEREIN IT HAS BEEN CATEGORICALLY MENTIONED THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. 5. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIV E VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICE R AND THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERU SED THE MATERIALS AVAILABLE ON RECORD. 7. AS IT IS NOTICED THAT THE ASSESSEE HAS NOT EARNE D ANY EXEMPT INCOME DURING THE RELEVANT ASSESSMENT YEARS, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TH E COMMISSIONER OF INCOME TAX, (CENTRAL)-1, CHENNAI VS. CHETTINAD LOGISTICS ( P.) LTD., WHICH HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT, THE DISALLOW ANCE AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED C IT(A) BY INVOKING THE PROVISION OF SECTION 14A OF THE INCOME TAX ACT, 196 1 STANDS DELETED. CONSEQUENTLY, THE APPEALS OF THE ASSESSEE ARE ALLOW ED. ITA NOS.1711 & 1712/CHNY/2019 & I.T.A. NO.1420/CHNY /2019 :- 4 -: 8. IN THE APPEAL OF THE REVENUE IN ITA NO.1420/CHNY /2019, THE REVENUE HAS CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN GIVING PARTIAL RELIEF IN RESPECT OF THE DISALLOWANCE MADE U/S.14A OF THE INC OME TAX ACT, 1961. AS WE HAVE ALREADY ALLOWED THE ASSESSEES APPEAL AND HELD THAT NO DISALLOWANCE U/S.14A IS LIABLE TO BE MADE IN THE HANDS OF THE AS SESSEE FOR THE RELEVANT ASSESSMENT YEARS, AS THE ASSESSEE HAS NOT EARNED AN Y EXEMPT INCOME, THE APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED AND THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON THE 28 TH DAY OF NOVEMBER, 2019 IN CHENNAI. SD/- ( '!# $ ) (INTURI RAMA RAO) - /ACCOUNTANT MEMBER SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 1! /DATED: 28 TH NOVEMBER, 2019 . IA, SR. P.S 0 + (,23 43&, /COPY TO: 1. ' /APPELLANT 2. ()' /RESPONDENT 3. * 5, ( )/CIT(A) 4. * 5, /CIT 5. 3 67 (, /DR 6. 78 9 /GF