M/s. E.D. Galgotia & Sons, New Delhi V. ACIT, Uttar Pradesh

ITA 1859/DEL/2015

• Counselvise Citation: 185920114 RSA 2015
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 09-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: P K MISRA
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 153A; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC - I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1858 & 1859 /DEL/201 5 (ASSESSMENT YEAR - 20 08 - 09 & 2009 - 10) E.D.GALGOTIA & SONS, B - 17, CONNAUGHT PLACE, NEW DELHI. PAN - AAAFE2218G ( APPELLANT) VS ACIT, CENTRAL CIRCLE, NOIDA, UTTAR PRADESH (RESPONDENT ) APPELLANT BY SH.P.K.MISRA, CA RESPONDENT BY DR.B.R.R.KUMAR, SR.DR ORDER BY WAY OF THESE TWO APPEALS, THE ASSESSEE ASSAILS THE CORRECTNESS OF THE SEPARATE ORDERS DATED 29.01.2015 OF CIT(A) - I, NOIDA PERTAINING TO 2008 - 09 AND 2009 - 10 ASSESSMENT YEAR ON FOLLOWING GROUNDS: - 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN TREATING THE GROUND NO. 2 AGITATING THE ISSUING OF NOTICE UNDER SECTION 153A AS GENERAL AND THEREBY NOT ADJUDICATING UPON THE SAME. 3. (I) THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ADDITION OF RS.1,11,806/ - ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 READ WITH RULE 8D OF IN COME TAX RULES. ( II ) THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONSIDERING THE SHARE APPLICATION MONEY OF RS. 42,25,000/ - FOR THE PURPOSE OF CALCULATION OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IGNORING THE FAC T THAT SHARE APPLICATION MONEY IS NOT CAPABLE OF EARNING EXEMPT INCOME. 4. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR MODIFY THE ABOVE GROUNDS OF APPEAL. 2. THE PARTIES WE RE HEARD ONLY IN RESPECT OF GROUND NO.2 WHICH IS IDENTICAL IN BOTH THE APPEALS. INVITING ATTENTION TO THE IMPUGNED ORDER IT WAS SUBMITTED BY THE LD.AR THAT THE SAID GROUND WAS RAISED B EFORE THE CIT(A) HOWEVER IT REMAINED UNDECIDED. RELIANCE WA S PLACED UPON T HE DECISION OF THE JURISDICTIONAL HIGH DATE OF HEARING 09 .0 9 .2015 DATE OF PRONOUNCEMENT 23 . 0 9 .2015 I.T.A .NO. - 18 5 8 & 1859 / DEL/201 5 PAGE 2 OF 3 COURT IN THE ORDER DATED 2 8 .08.2015 IN THE CASE OF CIT VS KABUL CHAWLA IN ITA NO.707, 709, 713/2014 WHEREIN ON AN IDENTICAL ISSUE THE APPEAL OF THE ASSESSEE WAS DISMISSED AND THE ORDER OF THE ITAT WAS UPHELD . IT WAS A L S O SUBMITTED THAT EVEN ON MERIT THE ASSESSEE S CLAIM IS SUPPORTED BY THE DECISION OF THE MUMBAI BENCH OF THE ITAT IN THE CASE OF RAINY INVESTMENTS PVT. LTD. VS ACIT (2013) 30 TAXMANN.COM 169 [MUM. TRIB.] . A CCORDINGLY IT WAS HIS PRAYER THAT THE ENTIRE ORDER MAY BE SET ASIDE. 3. THE LD. SR. DR, MR. B. R. R. KUMAR CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND THE GROUNDS RAISED A LONGWITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF THE C IT VS KABUL CHAWLA (CITED SUPRA) SUBMITTED THAT INSTEAD OF DECIDING THE GROUND HERE, IT WOULD BE APPROPRIATE THAT THE ISSUE MAY BE CONSIDERED ON FACTS FIRST BY THE CIT(A). 4 . HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE IT WOULD BE APPROPRIATE TO FIRST ADJUDICATE UPON THE JURISDICTIONAL ISSUE WHICH ISSUE WAS RAISED BY THE ASSESSEE BEFORE THE CIT(A) AND AS PER RECORD HAS NOT BEEN DECIDED BY THE SAID AU THORITY. IN VIEW O F THE SAID CONCLUSION, THE GROUND ON MERIT IS ALSO SET ASIDE BECAUSE THE LD. CIT(A) SHALL FIRST DECIDE THE ISSUE ON JURISDICTION AND IN THE EVENTUALITY IF SO WARRANTED SHALL THEREAFTER PROCEED TO DECIDE THE ISSUE ON MERITS . A CCORDINGLY THE ENTIRE ORDER IS SET ASIDE BACK TO THE FILE TO THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 4. 1. SINCE THE FACTS AND CIRCUMSTANCES AND THE ARGUMENTS OF THE PARTIES REMAINED IDENTICAL IN ITA NO.1859/DEL/2015 . F OR SIMILAR REASONS , SIMILAR DIRECTIONS ON THE FACTS ARE WARRANTED AND THE ISSUE S RAISED IN THE SAID APPEAL ARE ALSO RESTORED BACK TO THE LD. CIT(A) . 5 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 3 R D OF SEPTEMBER, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 2 3 /09 /2015 * AMIT KUMAR * I.T.A .NO. - 18 5 8 & 1859 / DEL/201 5 PAGE 3 OF 3 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI