M/S. ARISTON CAPITAL ASSET HOLDINGS PVT. LTD., CHENNAI V. ITO, CORPORATE WARD - 1 (4), CHENNAI

ITA 1922/CHNY/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8049 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset; Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 1922/CHNY/2019 / ASSESSMENT YEAR : 2013-14 M/S. ARISTON CAPITAL ASSET HOLDINGS P LTD., NO. 12, SOUTH MADA STREET, SRINAGAR COLONY, SAIDAPET, CHENNAI 600 015. [PAN: AAGCA 8511M] VS. THE INCOME TAX OFFICER, CORPORATE WARD 1(4), CHENNAI. ( / APPELLANT) ( &') /RESPONDENT ) ) * / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE &') * / RESPONDENT BY : SHRI. SURESH PERIASAMY. JCIT * /DATE OF HEARING : 21.12.2020 * /DATE OF PRONOUNCEMENT : 06.01.2021 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, CHENNAI IN ITA NO. 677/C IT(A)-1/2016-17 DATED 25.01.2019 FOR ASSESSMENT YEAR 2013-14. :-2-: ITA NO. 1922/CHNY/2019 2. THE ASSESSEE FILED THIS APPEAL BELATEDLY BY 93 DAYS . AN AFFIDAVIT WAS FILED STATING THAT THE IMPUGNED ORDER WAS MISPL ACED BY THE ACCOUNTANT WITHOUT NOTICE TO THE ASSESSEE WHICH CAU SED THE BELATED FILING OF THE APPEAL. IT WAS PLEADED THAT THE DELAY IN FI LING THE APPEAL MAY BE CONDONED AND DUE DECISION MAY BE RENDERED ON THE ME RITS, IN THE INTEREST OF JUSTICE. 3. WE HEARD THE RIVAL PARTIES AND CONDONE THE DELAY . 4. M/S. ARISTON CAPITAL ASSET HOLDING PVT. LTD., TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF ENERGY MANAGEMENT. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2013-14, THE AO, INTER ALIA, MADE D ISALLOWANCE U/S. 14A R.W.R. 8D. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER THE ASSESSEE FILED THIS APPEAL. THE CASE WAS HEARD THR OUGH VIDEO CONFERENCING. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE RECEIVED RS. 1,16,49,826/- AS A DIVIDEND INCOME DURING THE YEAR TOWARDS WHICH IT HAS DISALLOWED RS. 1,23,250/- IN THE MEMO OF INCOME FILED. HOWEVER, T HE AO INVOKED SECTION 14A R.W.R. 8D AND MADE A FURTHER DISALLOWANCE AT RS . 58,61,215/-. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 14A R.W.R. 8D HAD NO APPLICATION ON THE FACTS OF THE CASE AND OUG HT TO HAVE APPRECIATED :-3-: ITA NO. 1922/CHNY/2019 THAT THE AO HAVING NOT RECORDED SATISFACTION, THE D ISALLOWANCE MADE SHOULD HAVE BEEN DELETED AND THEREFORE, PLEADED THA T THE ASSESSEES APPEAL BE ALLOWED. PER CONTRA, THE LD. DR INVITING OUR ATTENTION TO THE RELEVANT PORTION OF THE ORDER OF THE CIT(A) SUBMITT ED THAT ONUS WAS ON THE ASSESSEE TO FURNISH BREAKUP OF INTEREST EXPENDITURE DISALLOWED BY THE ASSESSEE AND TO SUBSTANTIATE AS TO HOW THE AMOUNT D ISALLOWED U/S. 14A BY THE ASSESSEE IS IN ACCORDANCE WITH THE PROVISION. SINCE, THE ASSESSEE HAS NOT FURNISHED SPECIFIC DETAILS, THE AO RECORDED DUE SATISFACTION, INVOKED SECTION 14A R.W.R. 8D AND MADE THE IMPUGNED DISALLO WANCE. THEREFORE, THE LD. CIT(A) DISMISSED THE APPEAL AND HENCE THE L D. DR SUBMITTED THAT THE ORDER OF THE CIT(A) BE CONFIRMED. 6. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THE ASSESSEE EARNED DIVIDEND INCOME OF R S. 1,16,49,826/-. THE ASSESSEE IN ITS MEMO OF INCOME DEDUCTED RS. 1,23,25 0/- TOWARDS EXPENDITURE INCURRED FOR EARNING THE EXEMPT INCOME. IT IS CLEAR FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THE ASSESSEE H AS NOT SPECIFIED AS TO HOW IT HAS ARRIVED THIS QUANTUM OF DISALLOWANCE. IN THE ABSENCE OF SPECIFIC PARTICULARS, THE AO DULY RECORDED REASON AND INVOKE D SECTION 14A R.W.R. 8D AND MADE THE IMPUGNED DISALLOWANCE. THEREFORE, THE ONUS IS ON THE ASSESSEE TO FURNISH RELEVANT MATERIAL TOWARDS EARNI NG OF EXEMPT INCOME, BREAKUP OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO SUCH :-4-: ITA NO. 1922/CHNY/2019 EXEMPT INCOME AND SUBSTANTIATE THAT THE AMOUNT OF D ISALLOWANCE WORKED OUT BY IT IS FAIR AND REASONABLE. IN THE ABSENCE O F SUCH PARTICULARS, THE AO INVOKED SECTION 14A R.W.R. 8D AND MADE THE IMPUGNED DISALLOWANCE. THEREFORE, ON THE ABOVE FACTS AND CIRCUMSTANCE, WE ARE OF THE VIEW THAT IN THE INTERESTS OF JUSTICE, THIS ISSUE REQUIRES TO BE REMITTED BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL FURNIS H THE RELEVANT PARTICULARS/MATERIALS IN CONNECTION WITH THE EXEMPT INCOME AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH THE LAW. THE AO ON DUE EXAMINATION OF IT AND AFTER GIVING DUE OPPORTUN ITY TO THE ASSESSEE, SHALL DETERMINE THE DISALLOWANCE IN ACCORDANCE WITH LAW AND PASS A DUE ORDER. 7. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 06 TH JANUARY, 2021 AT CHENNAI. SD/- ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 06 TH JANUARY, 2021 JPV *&3454 /COPY TO: 1. ) / APPELLANT 2. &') /RESPONDENT 3. 6 ) ( /CIT(A) 4. 6 /CIT 5. 4& /DR 6. /GF