ACIT Corporate Circle 2, Madurai V. TVS Logistics Services Ltd., Madurai

ITA 1927/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2511 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 13-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M VISWANATHAN
• Keywords: Earning of tax free income; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . , .. ', BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO.1927/CHNY/2018 $% % /ASSESSMENT YEAR: 2013-14 THE ASST. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-2, MADURAI. VS. M/S.TVS LOGISTICS SERVICES- LTD., 7B, WEST VELI STREET, MADURAI-625 001. [PAN: AACCT 1412 E ] ( ( /APPELLANT) ( )*( /RESPONDENT) ./ ITA NO.2906/CHNY/2018 $% % /ASSESSMENT YEAR: 2013-14 M/S.TVS LOGISTICS SERVICES LTD., 7B, WEST VELI STREET, MADURAI-625 001. VS. THE DY. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-2, MADURAI. [PAN: AACCT 1412 E ] ( ( /APPELLANT) ( )*( /RESPONDENT) DEPARTMENT BY : MR. AR.V.SREENIVASAN, JCIT ASSESSEE BY : MR. M.VISWANATHAN, CA 7 /DATE OF HEARING : 30.10.2018 7 /DATE OF PRONOUNCEMENT : 31.10.2018 / O R D E R PER ABRAHAM P.GEORGE, ACCOUNTANT MEMBER : THESE ARE CROSS-APPEALS FILED BY THE REVENUE AND T HE ASSESSEE RESPECTIVELY DIRECTED AGAINST AN ORDER DATED 28.03. 2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MADURAI. ITA NOS.1927 & 2906/CHNY/2018 :- 2 -: 2. LD.COUNSEL FOR THE REVENUE AT THE OUTSET, POINTE D OUT THAT THE TAX EFFECT IN ITS APPEAL WAS LESS THAN RS.20.00 LAKHS A ND THEREFORE THE APPEAL WOULD NOT SURVIVE. THIS LEAVES US WITH THE APPEAL F ILED BY THE ASSESSEE. 3. GRIEVANCE TAKEN BY THE ASSESSEE IS THAT A DISALL OWANCE OF RS.1,94,67,563/- MADE BY THE AO U/S.14A OF THE INCO ME TAX ACT, 1961 (IN SHORT THE ACT), THOUGH RESTRICTED BY THE LD.C IT(A) TO RS.1,39,49,985/-, LATTER AUTHORITY ERRED IN NOT DIR ECTING EXCLUSION OF INTEREST EXPENDITURE AGAINST LOANS DIRECTLY USED FO R THE BUSINESS OF THE ASSESSEE, WHILE CALCULATING SUCH DISALLOWANCE. 4. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN IF THE REVENUE WAS TO MAKE A DISALLOWANCE U/S.14A OF THE ACT, IT NECES SARILY HAD TO EXCLUDE AT LEAST THE VALUE OF THE OVERSEAS INVESTMENTS MADE BY THE ASSESSEE, DIVIDEND FROM WHICH WAS TAXABLE IN INDIA, WHILE CAL CULATING SUCH DISALLOWANCE. 5. PER CONTRA, LD.DR SUBMITTED THAT THE ISSUE REGAR DING QUANTUM OF DISALLOWANCE TO BE MADE U/S.14A OF THE ACT COULD BE RE-CONSIDERED BY THE AO. 6. WE HAVE HEARD THE CONTENTIONS. ACCORDING TO THE LD.DR, IT WAS HOLDING INVESTMENTS OUTSIDE INDIA, INCOME FROM WHIC H WAS LIABLE TO TAX. THUS, ACCORDING TO HIM, VALUE OF SUCH INVESTMENTS H AD TO BE EXCLUDED ITA NOS.1927 & 2906/CHNY/2018 :- 3 -: WHILE CALCULATING THE DISALLOWANCE THAT COULD BE MA DE U/R.8D OF THE ACT. HOWEVER, NO ARGUMENTS WERE ADVANCED BY THE LD.AR WI TH REGARD TO THE GROUND CLAIM THAT INTEREST EXPENDITURE INCURRED WAS FOR BUSINESS PURPOSE AND WAS ALSO REQUIRED TO BE EXCLUDED. CONSIDERING T HE FACTS AND CIRCUMSTANCES, WE REMIT THE ISSUE OF THE DISALLOWAN CE U/S.14A OF THE ACT BACK TO THE FILE OF THE AO, FOR THE LIMITED PURPOSE OF VERIFYING WHETHER OVERSEAS INVESTMENTS COULD BE EXCLUDED WHILE CALCUL ATING SUCH DISALLOWANCE. NEEDLESS TO SAY THAT DISALLOWANCE MAD E U/S.14A SHALL NOT EXCEED THE EXEMPT INCOME CLAIMED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED WHEREAS THAT OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED ON THE 31 ST DAY OF OCTOBER, 2018, IN CHENNAI. SD/- SD/- ( . . ' ) ( DUVVURU R.L. REDDY ) $ /JUDICIAL MEMBER ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER /CHENNAI, < /DATED: OCTOBER 31, 2018. TLN 7 )$=> ?> /COPY TO: 1. ( /APPELLANT 4. @ /CIT 2. )*( /RESPONDENT 5. > )$$ /DR 3. @ ( ) /CIT(A) 6. % /GF