Appeal details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 0838 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-02-2013
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
09-11-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO.2042/MDS/2012 ASSESSMENT YEAR : 2009-10 M/S PAN ASIA LOGISTICS INDIA PVT. LTD 2 ND FLOOR, MASILAMANI ROAD BALAJI NAGAR ROYAPETTAH CHENNAI 600 014 VS THE ACIT COMPANY CIRCLE V(1) CHENNAI [PAN AADCP5669E] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : MS. FARHA SULTANA DATE OF HEARING : 06-02-2013 DATE OF PRONOUNCEMENT : 12-02-2013 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-V, CHENNAI, DATED 28.8.2012. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN DISALLOWING A SUM OF ` 1,97,460/- I.E 0.5% OF THE VALUE OF INVESTMENTS U/S 14A OF THE ACT. I.T.A.NO. 2042/12 :- 2 -: 3. THE BRIEF FACTS OF THE CASE AR THAT THE ASSESSING O FFICER OBSERVED THAT THE ASSESSEE HAS ADMITTED DIVIDEND I NCOME OF ` 21,87,381/- IN THE RETURN OF INCOME FILED. THE AS SESSEE HAS NOT INDICATED THE EXPENDITURE RELATABLE EXCLUSIVELY TO EARN THIS INCOME. HE OBSERVED THAT IT WAS NOT POSSIBLE TO EARN THIS INCO ME MAKING INVESTMENTS IN VARIOUS FINANCIAL INSTRUMENTS WITHOU T INCURRING ANY EXPENDITURE. HE ALSO NOTED THAT ASS PER RULE 8D OF THE I.T. RULES, WHERE THE ASSESSING OFFICER, HAVING REGARD TO THE A CCOUNTS OF THE ASSESSEE OF A PREVIOUS YEAR, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE; OR THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED IN R ELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT FOR SUCH PREVIOUS YEAR, HE SHALL DETERMINE THE AMOUNT OF EXP ENDITURE IN RELATION TO SUCH INCOME IN ACCORDANCE WITH THE PROV ISIONS OF SUB- RULE(2). HE OBSERVED THAT THE ASSESSEE HAS DEBITE D ` 15,85,830/- UNDER THE HEAD ADMINISTRATIVE EXPENSES AND BANK CH ARGES ON THE TOTAL SECURED LOANS OF ` 5,86,98,652/-. HE FURTHER OBSERVED THAT THE TOTAL INVESTMENTS AS APPEARING IN THE BALANCE SHEET WAS ` 4,08,53,305/-. THUS, HE CONCLUDED THAT THE INTERES T ATTRIBUTABLE TO THIS INVESTMENT OF ` 4,08,53,305/- IS NOT AN ALLOWABLE EXPENDITURE WHIC H WORKS OUT TO ` 11,03,711/-. HE FURTHER OBSERVED THAT THE AVERAGE I.T.A.NO. 2042/12 :- 3 -: VALUE OF INVESTMENT OF THE ASSESSEE WAS ` 3,94,92,173/- AND THE AVERAGE VALUE OF TOTAL ASSETS WAS ` 3,03,06,008/-. THEREFORE, HE ARRIVED AT THE ADMINISTRATIVE EXPENSES AND BANK CHA RGES PROPORTIONATELY RELATED TO THE EARNING OF DIVIDEND INCOME AT ` 14,38,260/-. HE ALSO ARRIVED AT % OF THE VALUE O F INVESTMENT OF ` 3,94,92,173/- WHICH COMES TO ` 1,97,460/-, HENCE, HE MADE A TOTAL DISALLOWANCE OF ` 16,35,720/-. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE T HE CIT(A), WHO HELD THAT WITH REGARD TO PROPORTIONATE DISALLOWANCE OF ADMINISTRATIVE EXPENSES AND BANK CHARGES, THOUGH TH E ASSESSEE FURNISHED DETAILS TO THE ASSESSING OFFICER BUT THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME WHILE MAKING THE DISALLOWAN CE. THEREFORE, HE RESTORED THE ISSUE BACK TO THE FILE OF THE ASSES SING OFFICER WITH A DIRECTION TO DELETE THE DISALLOWANCE OF PROPORTIONA TE INTEREST MADE UNDER SECTION 14A R.W RULE 8D AFTER VERIFICATION AN D ALLOWED THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 5. WITH REGARD TO THE ADDITION OF 0.5% OF AVERAGE INVE STMENT, THE CIT(A) HAS OBSERVED THAT THE ASSESSEE DID NOT PRESS THIS PART OF THE DISALLOWANCE. HENCE, HE UPHELD THE ORDER OF TH E ASSESSING OFFICER AND DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE . I.T.A.NO. 2042/12 :- 4 -: 6. THE A.R OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE ASSESSEE HAD NOT PRESSED THIS PART OF THE DISALLOW ANCE BEFORE THE CIT(A) AND THEREFORE, THE DISALLOWANCE UPHELD BY TH E CIT(A) FOR THAT REASON WAS NOT JUSTIFIED. 7. ON THE OTHER HAND, THE DR VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(A) AND RELIED UPON THE DECISION OF THE H ON'BLE AP HIGH COURT IN THE CASE OF REAL FOOD PRODUCTS PVT. LTD VS ITO, [1998] 229 ITR 351, AND SUBMITTED THE COURT HAS OBSERVED THAT WE DO NOT APPRECIATE ANY COUNSEL TO CANVASS THE TRUTHFULNESS OF A STATEMENT MADE IN A JUDGMENT OR ORDER. THERE IS AUTHORITY FO R THE PROPOSITION THAT THE STATEMENT OF THE JUDGE AS TO WHAT HAPPENED IN A COURT WAS CONCLUSIVE AND CANNOT BE ALLOWED TO BE CONTROVERTED BY ANY AFFIDAVIT OR OTHERWISE. HE SUBMITTED THAT AS THE ASSESSEE H AD NOT PRESSED THE GROUND BEFORE THE CIT(A), IT CANNOT FILE AN APPEAL ON THE SAME VERY ISSUE BEFORE THE TRIBUNAL. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING T HE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE AS SESSEE, IN THE INSTANT CASE, HAS FILED APPEAL BEFORE THE CIT(A) AGAINST TH E DISALLOWANCE MADE U/S 14A R.W.R 8D OF 0.5% OF THE AVERAGE INVESTMENT AMOUNTING TO ` 1,97,460/-. ACCORDING TO THE CIT(A) THE ASSESSEE HAS NOT PRESSED THIS GROUND OF APPEAL AND HENCE, THE GROUND OF APPEAL WA S DISMISSED BY I.T.A.NO. 2042/12 :- 5 -: THE CIT(A). BEFORE US, THE A.R OF THE ASSESSEE CONTENDED THAT HE HAD PRESSED THIS GROUND OF APPEAL BEFORE THE CIT(A) AND MADE HIS SUBMISSIONS THEREON. HOWEVER, WE FIND THAT NO MATE RIAL WAS BROUGHT ON RECORD BY THE ASSESSEE IN SUPPORT OF THE ABOVE CONTENTION. BE THAT AS IT MAY. AS THE SAID GROUND OF APPEAL WAS NOT DE CIDED BY THE CIT(A) ON MERITS FOR THE REASON THAT THE ASSESSEE HAS NOT PRESSED THIS GROUND OF APPEAL BEFORE HIM, WE REFRAIN FROM DECIDI NG THIS APPEAL ON MERITS. THE ASSESSEE, IF SO ADVISED, MAY FILE A P ETITION FOR RECTIFICATION BEFORE THE CIT(A). THUS, THE GROUND OF APPEAL OF T HE ASSESSEE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 12 TH OF FEBRUARY, 2013, AT CHENNAI. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 12 TH FEBRUARY, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR
