The Dy. CIT, Circle-1(1)(2), Ahmedabad V. M/s. D.B. Corp. Ltd., Ahmedabad

ITA 2029/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3729 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO.2029/AHD/2017 ( / ASSESSMENT YEAR : 2013-14) THE DCIT CIRCLE-1(1)(2) AHMEDABAD / VS. M/S.D.B.CORP.LTD. 280, SARKHEJ GANDHIANGAR HIGHWAY NR.YMCA CLUB MAKARBA, AHMEDABAD ./ ./ PAN/GIR NO. : AACCM5772G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.K. DEV, SR.DR / RESPONDENT BY : SHRI DHINAL SHAH, AR / DATE OF HEARING 14/02/2019 !'# / DATE OF PRONOUNCEMENT 15/02/2019 / O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER : THE REVENUE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-1, AHMEDABAD [CIT(A) IN SHORT] DATED 24/07/2017 PASSED FOR ASSESSMENT YEAR (AY) 2013-14. 2. THE REVENUE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE U/S.1 4AOF THE INCOME TAX ITA NO.2029/AHD /2017 DCIT VS. DB CORP.LTD. ASST.YEAR 2013-14 - 2 - ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') RE AD WITH RULE 8D OF THE INCOME TAX RULES, 1962 TO RS.3,25,000/- AS AGAINST RS.1,06,77,237/- MADE BY THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSE E IS ENGAGED IN THE BUSINESS OF PUBLICATION OF NEWSPAPER & PERIODICALS. IT HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 27/09/2013 DECLA RING TOTAL INCOME AT RS.3,30,00,78,860/-. ON SCRUTINY OF ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS MADE INVESTMENT IN SHARES OF RS.1,56,13,19,437/- AND EARNED DIVIDEND INCOME AMOU NTING TO RS.3,25,000/-. HE MADE AN ANALYSIS AND WORKED OUT THE DISALLOWANCE WITH THE HELP OF RULE 8 D OF INCOME TAX RULES, 196 2 OF RS.1,06,77,237/-. 4. ON APPEAL, LD.CIT(A) RESTRICTED THIS DISALLOWANC E TO THE EXTENT OF DIVIDEND INCOME EARNED BY THE ASSESSEE WHICH IS EXE MPT FROM TAX. 5. THE ISSUE BEFORE US IS WHETHER DISALLOWANCE U/S. 14A OF THE ACT COULD BE RESTRICTED TO THE EXTENT OF DIVIDEND INCOM E WHICH IS CLAIMED TO BE EXEMPT FROM TAX BY THE ASSESSEE. 6. THE LD.COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR AY 2009-10 IN I TA ITA NO.2029/AHD /2017 DCIT VS. DB CORP.LTD. ASST.YEAR 2013-14 - 3 - NO.1850/AHD/2012. HE FURTHER PLACED RELIANCE ON TH E JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF PRINCIPAL COMM ISSIONER OF INCOME TAX, PATIALA VS. STATE BANK OF PATIALA (2018) 99 TAXMANN.COM 286 (SC). 7. ON THE OTHER HAND, LD.DR RELIED UPON THE ORDER O F ASSESSING OFFICER. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORDS CAREFULLY. FOR AY 2009-10, UNDER IDENT ICAL SITUATION, THE TRIBUNAL HAS RECORDED THE FOLLOWING FINDING: 9. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD WHERE THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX, DISALL OWANCE U/S.14A COULD NOT BE MADE. IT IS THE CONTENTION OF THE LEA RNED COUNSEL THAT IT DID NOT CLAIM ANY INCOME TO BE EXEMPT FROM THE PAYM ENT OF INCOME-TAX. IN SUPPORT OF THIS CONTENTION, HE REFERRED TO THE C OMPUTATION OF INCOME FILED BY THE ASSESSEE. HOWEVER, WE DEEM IT PROPER TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER AND WE DI RECT HIM TO VERIFY WHETHER THE ASSESSEE HAS CLAIMED FOR EXEMPTION OF A NY INCOME FROM PAYMENT OF TAX. IF THE ASSESSEE DID NOT CLAIM ANY INCOME TO BE EXEMPT FROM THE PAYMENT OF TAX, THEN NO DISALLOWANCE U/S.1 4A COULD BE MADE. HOWEVER, IF ANY INCOME IS CLAIMED TO BE EXEMPT, THE N THE DISALLOWANCE SHOULD BE RESTRICTED TO SUCH INCOME. WITH THIS DIR ECTION, WE RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. 10. IN THE RESULT, ASSESSEES APPEAL IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2029/AHD /2017 DCIT VS. DB CORP.LTD. ASST.YEAR 2013-14 - 4 - 8.1. THIS FINDING IS BASED UPON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY (P.) L TD. REPORTED IN (2014) 45 TAXMANN.COM 116 (GUJ.), WHEREIN THE HONBLE HIGH COURT HAS HELD THAT IF THERE IS NO EXEMPT INCOME CLAIMED BY THE AS SESSEE, THEN NO EXPENSES COULD BE DISALLOWED. 8.2 TAKING GUIDANCE FROM THE DECISION, THE TRI BUNAL HAS UPHELD IN RESTRICTING THE DISALLOWANCE TO THE EXTENT OF EXEMP T INCOME AT THE MOST. RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE B ENCH(SUPRA), WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT (A). HENCE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 15 TH FEBRUARY - 2019 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15/ 02 /2019 &.., .(../ T.C. NAIR, SR. PS ITA NO.2029/AHD /2017 DCIT VS. DB CORP.LTD. ASST.YEAR 2013-14 - 5 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-1, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14.2.19(DICTATION-PAD 6- PAGE S ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..14.2.19 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.15.2.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.2.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER