Ramco Industries Ltd., CHENNAI V. Addl. CIT, Virudhunagar

ITA 1876/CHNY/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4771 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE
• Assessee Lawyers: V JAGADISAN
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1876 & 1877/CHNY/2016 / ASSESSMENT YEARS : 2010-11 & 2011-12 M/S. RAMCO INDUSTRIES LTD., 47, P.S.K. NAGAR, RAJAPALAYAM V. THE ADDL. COMMISSIONER OF INCOME TAX, VIRUDHUNAGAR RANGE, VIRUDHUNAGAR. PAN: AAACR5284J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI V. JAGADISAN, CA / RESPONDENT BY : SMT. RUBY GEORGE, CIT /DATE OF HEARING : 12.02.2018 /DATE OF PRONOUNCEMENT : 14.02.2018 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-1, MADURAI, ALL DATED 04.04.2016 IN ITA NO.0177/2015-1 6 FOR THE ASSESSMENT YEAR 2010-11 AND ITA NO.176/2015-16 FOR THE ASSESSMENT YEAR 2011-12 BOTH PASSED U/S.250(6) R.W. S. 263 & 143(3) OF THE ACT. THEREAFTER IN THE APPELLATE PROC EEDINGS BEFORE THE TRIBUNAL THE APPEALS WERE DISPOSED OFF VIDE ORD ER DATED 14.07.2017. SUBSEQUENTLY THE MISCELLANEOUS PETITIO NS NO.285 & 2 I.T.A. NOS. 1876 & 1877/CHNY/2016 286/MDS/2017 FILED BY THE ASSESSEE WAS DISPOSED OFF BY RECALLING THE ORDER OF THE TRIBUNAL IN ORDER TO ADJUDICATE TH E GROUND WITH RESPECT TO THE DISALLOWANCE U/S.14A R.W.R. 8D OF TH E RULES FOR THE ASSESSMENT YEARS 2010-11 & 2011-12 BECAUSE THE GROU ND RAISED BY THE ASSESSE WAS LEFT OUT TO BE ADJUDICATED ON TH E EARLIER OCCASION. 2. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT IN BOTH THE ABOVE MENTIONED ASSESSMENT YEARS THE LD.AO HAD INV OKED THE PROVISIONS OF SECTION 14A OF THE ACT AND COMPUTED T HE DISALLOWANCE BY APPLYING RULE 8D OF THE RULES WHICH THE LD.CIT(A) HAS CONFIRMED. HE FURTHER SUBMITTED THAT PREDOMINANTLY THE INVESTMENTS WERE MADE IN SISTER COMPANIES OF TH E ASSESSEE COMPANY FROM THE ASSESSEES OWN NON-INTEREST BEARIN G FUNDS AND THEREFORE PROVISIONS OF SECTION 14A WILL NOT BE APP LICABLE IN THE CASE OF THE ASSESSEE. HENCE IT WAS PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO FOR FRESH CON SIDERATION. 3. THE LD.DR COULD NOT CONTROVERT TO THE SUBMISSION MADE BY THE LD.AR THOUGH SHE VEHEMENTLY ARGUED IN SUPPORT O F THE ORDERS OF THE LD.REVENUE AUTHORITIES. 3 I.T.A. NOS. 1876 & 1877/CHNY/2016 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. ON SEVERAL EARLIER OCCASI ONS WE HAVE HELD THAT IF THE ASSESSEE HAS MADE INVESTMENT IN SH ARES OF ITS SISTER COMPANIES FOR EARNING EXEMPT INCOME OUT OF I TS OWN NON- INTEREST BEARING FUNDS THEN PROVISIONS OF SECTION 1 4A WILL NOT BE APPLICABLE BECAUSE THERE WOULD BE NO COST ATTRIBUTA BLE FOR MAKING INVESTMENT IN ONES OWN CONCERN. FURTHER WE FIND TH AT THE LD.AO HAS NOT MADE A FINDING AS TO WHETHER ANY COST IS AT TRIBUTABLE FOR EARNING EXEMPT INCOME IN THE CASE OF THE ASSESSEE I N ORDER TO INVOKE THE PROVISIONS OF SECTION 14A AND RULE 8D OF THE RULES. THEREFORE IN THE INTEREST OF JUSTICE, WE HEREBY REM IT BACK THE MATTER TO THE FILE OF LD.AO FOR FRESH CONSIDERATION FOR BOTH THE ASSESSMENT YEARS. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR B OTH THE ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED ON THE 14 TH FEBRUARY, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 14 TH FEBRUARY, 2018. 4 I.T.A. NOS. 1876 & 1877/CHNY/2016 RSR. ! ' ! /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. #$% ( ) /CIT(A) 4. #$% /CIT 5. ! /DR 6. &' /GF.