Nirmal Kumar Nahata , Kolkata V. ITO, Ward - 44(1), Kolkata, Kolkata

ITA 1719/KOL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9507 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTI
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (D), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A. NO. 1719/KOL/2018 ASSESSMENT YEAR: 2014-15 NIRMAL KUMAR NAHATA....................................................................APPELLANT C/O. SRI S.L. KOCHAR, ADVOCATE, 5, ASHUTOSH CHOWDHURY AVENUE, KOLKATA 700 019. [PAN: ABQPN 8554 M] ITO WARD 44(1) KOLKATA.......................RESPONDENT 3, GOVT. PLACE, 2 ND FLOOR, ROOM NO. 2/34A, KOLKATA 700 001. APPEARANCES BY: SHRI ANIL KOCHAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI S.C. MOHANTI, JCIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 11, 2018 DATE OF PRONOUNCING THE ORDER : DECEMBER 19, 2018 ORDER PER P.M. JAGTAP, VICE PRESIDENT THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - 13 KOLKATA DATED 07.06.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF RS. 8,24,022/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S 14A OF THE INCOME TAX ACT, 1961 READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 . 2. THE ASSESSEE IN THE PRESENT IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 24.11.2014 DECLARING A TOTAL INCOME OF RS. 4,77,520/-. IN THE SAID RETURN, THE DIVIDEND INCOME OF RS. 17,808/- RECEIVED DURING THE YEAR UNDER CONSIDERATION WAS CLAIMED TO BE EXEMPT BY THE ASSESSEE. SINCE THE EXPENDITURE INCURRED 2 I.T.A. NO. 1719/KOL/2018 ASSESSMENT YEAR: 2014-15 NIRMAL KUMAR NAHATA IN RELATION TO THE EARNING OF THE SAID EXEMPT INCOME WAS NOT DISALLOWED BY THE ASSESSEE AS REQUIRED BY THE PROVISION OF SECTION 14A, THE AO WORKED OUT SUCH EXPENDITURE AT RS. 8,24,022/- BY APPLYING RULE 8D AND MADE A DISALLOWANCE TO THAT EXTENT IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 05.12.2016. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID DISALLOWANCE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE DISALLOWANCE U/S 14A CANNOT EXCEED THE EXEMPT INCOME ACTUALLY EARNED BY THE ASSESSEE AND SINCE THE EXEMPT DIVIDEND INCOME IN THE FORM OF DIVIDEND ACTUALLY EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS ONLY TO THE EXTENT OF RS. 17,808/-, THE DISALLOWANCE MADE IN THE CASE OF THE ASSESSEE U/S 14A READ WITH RULE 8D IS LIABLE TO BE RESTRICTED TO RS. 17,808/-. SINCE THIS CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS DULY SUPPORTED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL AT MUMBAI IN THE CASE OF PEST CONTROL INDIA PVT. LTD. VS DCIT (ITA NO. 5048/MUM/2016 DATED 31.10.2017), WE ACCEPT THE SAME AND RESTRICT THE DISALLOWANCE OF RS. 8,24,022/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S 14A READ WITH RULE 8D TO RS. 17,808/- BEING THE AMOUNT OF ACTUAL EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IN THE FORM OF DIVIDEND. 3 I.T.A. NO. 1719/KOL/2018 ASSESSMENT YEAR: 2014-15 NIRMAL KUMAR NAHATA 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2018. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE PRESIDENT DATED:19/12/2018 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. NIRMAL KUMAR NAHATA, C/O. SRI S.L. KOCHAR, ADVOCATE, 5, ASHUTOSH CHOWDHURY AVENUE, KOLKATA 700 019. 2. ITO WARD 44(1), 3, GOVT. PLACE, 2 ND FLOOR, ROOM NO. 2/34A, KOLKATA 700 001. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / H.O.O. ITAT, KOLKATA