DCIT Central Circle-31, New Delhi V. RSWM Ltd, Kharigram

ITA 1927/DEL/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0521 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-10-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1927/DEL/2020 Assessment Year 2012-13 DCIT, Central Circle-31, New Delhi. Vs. RSWM Ltd., Kharigram, Gulabpura, Karouli, Rajasthan. TAN/PAN: AAACR9700M (Appellant) (Respondent) Appellant by: None Respondent by: Shri R.K. Gupta, CIT-DR Date of hearing: 06 10 2022 Date of pronouncement: 18 10 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the Revenue against the order of the Commission of Income Tax (Appeals)-XXX, New Delhi [‘CIT(A) ’ in short] dated 17.09.2020 arising fro m the assessment order dated 29.12.2018 passed by the Assessing Officer ( AO) under Section 153A of the Income Tax Ac t, 1961 (the Act) concerning AY 2012-13. 2. Th e gr ou nd s of ap pea l rai se d b y t he Re ven ue r ead a s un der : “ 1 . T h a t o n t h e f a c t s a n d i n c i r c u m s t a n c e s o f t h e ca s e , t h e l d . C I T ( A ) h a s e r r e d i n l a w a n d o n f a c t s i n r e s t r i c t i n g t h e a d d i t i o n o f R s . 5 0 , 1 7 , 0 1 0 / - ( t o t h e e x t e n t o f d i v i d e n d i n c o m e ) as a g a i n s t R s . 3 , 8 5 , 6 0 , 0 0 0 / - m a d e u / s . 1 4 A b y t h e A s s e s s i n g O f f ic e r , w i t h o u t a p p r e c i a t i n g t h e d e t a i l e d r e a s o n s g i v e n i n t h e a s s es s m e n t o r d e r . ” 3. W h en th e mat te r w as cal le d f or he ar in g, no ne ap pe are d f or th e I.T.A. No.1927/Del/2020 2 ass es se e. T her ef or e , t he mat ter w as p r oce ed ed e x-p ar te . 4. Bri ef l y st at ed, d uri ng th e As ses s me nt Ye ar 20 12-13 in que st io n, the as se ss ee h as e ar ne d d ivi d end in co me of Rs. 5 0,1 7, 00 0/ - wh ich is c la i med a s ex e mpt un der Se cti on 10 (3 4) of t h e Ac t. T he As ses si ng Of f icer c o mpu ted th e d is al l ow anc e of R s. 3, 85 , 60, 00 0/ - i n ter ms of Se ct io n 1 4A of the Act r .w . Rul e 8D of th e I nco me Tax Ru les . 5. Ag gri ev ed , the a ss ess ee p ref er re d a p pea l bef or e th e CI T( A). The CI T( A) r est ri c ted t he di sal lo wa nc e to t he e xt ent of the i nco me and g ran te d r el ie f tow ard s ex ces s di sal lo wa nc e. T he rel ev an t ope ra ti ve pa ra gr ap h of t he C IT( A) i s re pro du ce d as u nde r: “ G r o u n d N o . 1 ( a n d i s s u b p a r t ) o f t h e a p p e a l i s d ir e c t e d a g a i n s t d i s a l l o w a n c e o f R s . 3 , 8 5 , 6 0 , 0 0 0 / - u / s . 1 4 r . w . r . 8 D of t h e i n c o m e T a x A c t , 1 9 6 1 . T h e a p p e l l a n t h a s d i s p u t e d t h e d i s a ll o w a n c e o n t h e g r o u n d o f n o n - r e c o r d i n g o f s a t i s f a c t i o n a s w e l l a s n o n - s u s t a i n a b i l i t y o f d i s a l l o w a n c e i n e x c e s s o f e x e m p t i n c o m e i n c o m e . I t h a s a l s o b e e n c o n t e n d e d b y t h e a p p e l l a n t t h a t i nv e s t m e n t a p p e a r i n g i n t h e B a l a n c e s h e e t a r e s t r a t e g i c i n v e s tm e n t a n d a s s u c h t h e p r o v i s i o n s o f s e c t i o n 1 4 A a r e n o t a p p l i c a bl e . 8 . 1 T h e a s s e s s i n g o f f i c e r h a s c o m p u t e d t h e d i s a l l ow a n c e u n d e r R u l e 8 D ( 2 ) ( i i ) a n d 8 D (2 ) ( i i i ) o f t h e I T R u l e s , 1 9 6 2. I h a v e c o n s i d e r e d t h e s u b m i s s i o n s o f t h e a p p e l l a n t a n d h a ve p e r u s e d t h e a s s e s s m e n t o r d e r . I f i n d t h a t d u r i n g t h e y e a r u n d e r r e f e r e n c e , t h e a p p e l l a n t h a s e a r n e d e x e m p t i n c o m e i n t h e f o r m o f di v i d e n d o f R s . 5 0 , 1 7 , 0 1 0 / - . F u r t h e r , t h e a s s e s s i n g o f f i c e r h a s i n v o k e d p r o v i s i o n s o f s e c t i o n 1 4 A a f t e r d u l y r e c o r d i n g s a t is f a c t i o n i n t e r m s o f p r o v i s i o n s o f 1 4 A ( 2 ) w h i c h i s e v i d e n t f r o m t h e o b s e r v a t i o n r e c o r d e d a t P a g e 7 - 1 0 o f t h e a s s e s s m e nt o r d e r w h e r e i n t h e A O h a s d i s c u s s e d a b o u t t h e a p p l i c a b i l i ty o f s e c t i o n 1 4 A r . w . r 8 D i n t h e c a s e o f t h e a p p e l l a n t . T h u s , I d o n o t f i n d f o r c e i n t h e s u b m i s s i o n o f t h e a p p e l l a n t o n t h e i s su e o f s a t i s f a c t i o n . 8 . 2 H o w e v e r , I a l s o f a i l t o f i n d j u s t i f i c a t i o n b e hi n d t h e a c t i o n o f t h e a s s e s s i n g o f f i c e r i n m a k i n g h u g e d i s a l l o w a n ce o f R s . 3 , 8 5 , 6 0 , 0 0 0 / - a g a i n s t e x e m p t ' d i v i d e n d i n c o m e o f R s. 5 0 , 1 7 , 1 1 0 / - . I t i s t r i t e l a w , a s s e t t l e d b y J u r i s d i c t i o n a l H i g h C o u r t , t h a t d i s a l l o w a n c e u / s 1 4 A c a n n o t e x c e s s e x e m p t i n c o m e . Th i s l e g a l p o s i t i o n i s i n c o n s o n a n c e w i t h p r i n c i p l e t h a t p r o v is i o n o f s e c t i o n 1 4 A i s n o t a p p l i c a b l e w h e r e t h e r e i s n o c l a i m o f e xe m p t i n c o m e . I n t h e s e c i r c u m s t a n c e s , I a m i n c l i n e d t o a g r e e w i t h a l t e r n a t e p l e a I.T.A. No.1927/Del/2020 3 r a i s e d b y t h e A R t h a t d i s a l l o w a n c e u / s 1 4 A s h o u l d be r e s t r i c t e d t o t h e e x t e n t o f e x e m p t i n c o m e w h i c h i s s u p p o r t e d fr o m d e c i s i o n o f H o n ’ b l e D e l h i H i g h C o u r t i n t h e c a s e o f J o i n t I nv e s t m e n t s P r i v a t e L i m i t e d v s . C I T [ 2 0 1 5] 3 7 2 I T R 6 9 4 ( D e l ) a nd P r . C I T v . C a r a f B u i l d e r s 8 b C o n s t r u c t i o n s (P . ) L t d . [ 2 0 1 9] 4 14 I T R 1 2 2 ( D e l h i ) [ S L P d i s m i s s e d b y S C] . 8 . 3 I n v i e w o f f i n d i n g r e c o r d e d i n a f o r e s a i d p a r a , I h e r e b y d i r e c t t h e A s s e s s i n g O f f i c e r t o r e s t r i c t t h e d i s a l lo w a n c e t o t h e e x t e n t o f d i v i d e n d i n c o m e o f R s . 5 0 , 1 7 , 1 1 0 / - a n d d e le t e r e m a i n i n g d i s a l l o w a n c e . T h e G r o u n d N o . 1 i s t h u s p a r t l y a l l o w ed . ” 6. W e ha ve c ar ef ull y con si de re d the o bj e cti on r ai sed o n be h alf of the Rev en ue o n t he acti on of th e CI T( A). Ho we ver , we se e not me rit in s uc h o bje ct io n. The CI T( A) has ri g htl y a pp lie d the p ri nci pl es l ai d do wn b y pl et ho ra o f judi ci al pr ec ed ent s w he re b y it wa s h eld th at th e dis al lo wa nc e u nde r Sec ti on 14 A c an n ot e xc ee d t he e xe mp t in co me . Th us, t he ac ti on of t he CI T( A) ca nn ot be f au lt ed bein g i n con so na nc e w it h th e ju dg me nt s re nd er ed i n t hi s re gard. He nce , w e see n o r ea so n to in terf e re wi th th e or der of t he C IT (A ) on th e i ss ue inv ol ve d. 7. In th e res ul t, t he ap pea l of th e Re ve nu e is d is mi ss ed . Order pronounced in the open Court on 18/10/2022. Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /10/2022 prabhat