M/s. Soyuz Trading Co. Ltd., Kolkata V. DCIT, Circle - 8(1), Kolkata, Kolkata

ITA 1965/KOL/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9501 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CITA KOLKATA AY RAISED ADDIT
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

ITA NO.1965/KOL/2017 (ASSESSMENT YEAR-2011-12) IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. J.SUDHAKAR REDDY, ACCOUNTANT MEMBER & SH. S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1965/KOL/2017 (ASSESSMENT YEAR-2011-12) ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 20.03.2017 PASSED BY CIT(A)-17, KOLKATA FOR AY 2011-12. THE ASSESSEE RAISED ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER:- 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) SHOULD HAVE APPRECIATED THAT SINCE THE AFORESAID TRAVELING EXPENSES OF RS.42,77,443/- WERE DIRECTLY ATTRIBUTABLE TO TAXABLE INCOME, THE SAME SHOULD HAVE BEEN KEPT OUT OF PURVIEW OF EXPENSES DISALLOWABLE U/S 14A OF THE ACT AND THE DISALLOWANCE U/S 14A SHOULD HAVE BEEN COMPUTED REDUCING SUCH EXPENSES. 2. WE ADMIT THE ABOVE SAID ADDITIONAL GROUND RAISED BY THE ASSESSEE AS IT INVOLVES LEGAL ISSUE WHICH REQUIRES NO EXAMINATION OF NEW FACTS. 3. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE AO INVOKED RULE 8D(2) AND COMPUTED THE DISALLOWANCE UNDER RULE 8D(III) TO THE EXTENT OF RS.67,76,087/- FOR THE PURPOSE OF SECTION 14A OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). WE FIND THAT THE ASSESSEE ALSO DISALLOWED AMOUNT OF RS.4,94,420/- ON ITS OWN. THE CONTENTION OF THE LD.AR BEFORE US IS THAT THE DISALLOWANCE SHOULD BE TO THE 1 M/S. SOYUZ TRADING CO.LTD., 16B, SHAKESPEARE SARANI, 2 ND FLOOR, KOLKATA-700071. PAN-AAGCS3371K VS DCIT, CIRCLE-8, KOLKATA-700069. (APPELLANT) (RESPONDENT) APPELLANT BY SH.SUBODH AGARWAL, ADV. RESPONDENT BY SH.SANKAR HALDER, JCIT, SR. DR DATE OF HEARING 19.11.2018 DATE OF PRONOUNCEMENT 19.12.2018 ITA NO.1965/KOL/2017 (ASSESSMENT YEAR-2011-12) EXTENT OF INVESTMENTS WHICH YIELDED EXEMPT INCOME AND PLACED RELIANCE IN THE CASE OF REI AGRO LTD. OF HONBLE HIGH COURT OF CALCUTTA. TAKING INTO CONSIDERATION THE SAID FACTS AND THE SUBMISSIONS OF LD.DR & LD.AR AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO REMAND THE MATTER TO THE FILE OF AO TO COMPUTE DISALLOWANCE IN RESPECT OF THOSE INVESTMENTS YIELDED EXEMPT INCOME IN TERMS OF DECISION OF HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF REI AGRO LTD. (SUPRA). THE ADDITIONAL GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE REMAINING GROUND RAISED BY THE ASSESSEE ARE BECOME ACADEMIC IN VIEW OF OUR DECISION IN ADDITION OF GROUND NO.2 AS DISCUSSED ABOVE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19.12.2018. (J.SUDHAKAR REDDY) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER [ DATE:- 19.12.2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- M/S. SOYUZ TRADING CO.LTD., 16B, SHAKESPEARE SARANI, 2 ND FLOOR, KOLKATA-700071. 2. RESPONDENT- DCIT, CIRCLE-8, KOLKATA-700069. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES BY ORDER AR/H.O.O ITAT, KOLKATA 2