Icharaj Vinimay Private Limited , Kolkata V. ITO, Ward - 6(4), , Kolkata

ITA 2049/KOL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4217 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VINOD KUMAR JAIN
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

1 ITA NO.2049/KOL/2018 ICHARAJ VINIMAY PVT. LTD., AY:2013-14 , C (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL C(SMC) BENCH : KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 2049/KOL/2018 ASSESSMENT YEAR: 2013-14 ICHARAJ VINIMAY PVT. LTD. (PAN: AACCI8867J)) VS. INCOME-TAX OFFICER, WD-6(4), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 29.01.2019 DATE OF PRONOUNCEMENT 13.03.2019 FOR THE APPELLANT SHRI VINOD KUMAR JAIN, FCA FOR THE RESPONDENT SHRI NICHOLAS MURMU, ADDL. CIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, KOLKATA DATED 11.07.2018 FOR AY 2013-14. 2. AT THE OUTSET ITSELF, THE LD. AR OF THE ASSESS EE BROUGHT TO OUR NOTICE THAT THE ONLY ISSUE INVOLVED IN THIS APPEAL, IS REGARDING DISALLO WANCE MADE BY THE AO U/S. 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES). IT WAS BROUGHT TO OUR NOTICE THAT IN THIS ASSESSMENT YEAR, THE ASSESSEE W AS NOT IN RECEIPT OF ANY DIVIDEND INCOME. HOWEVER, IT SUO MOTO DISALLOWED AN AMOUNT OF RS.2,6 1,793/- U/S. 14A OF THE ACT. HOWEVER, THE AO APPLIED RULE 8D OF THE RULES AND MA DE A DISALLOWANCE OF RS.6,73,713/-. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE SAME. AGGRIEVED THE ASSESSEE IS BEFORE US. 3. HAVING HEARD THE RIVAL SUBMISSIONS AND GONE THRO UGH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS TAKEN NOTE THAT THE ASSESSEE HAS N OT RECEIVED ANY DIVIDEND EXEMPT INCOME FOR THIS ASSESSMENT YEAR. THEREFORE, APPLYING THE RATI O LAID BY THE HONBLE DELHI HIGH COURT IN 2 ITA NO.2049/KOL/2018 ICHARAJ VINIMAY PVT. LTD., AY:2013-14 CIT VS. HOLCIM INDIA PVT. LTD. IN ITA NO. 486/KOL/2 014 (DEL.) AND CHEMINVEST LTD. VS. CIT IN 378 ITR 33 (DEL.) WHEREIN THE HONBLE HIGH C OURT HAS HELD THAT WHEN THERE IS NO EXEMPT INCOME. RECEIVED BY THE ASSESSEE THEN SECTI ON 14A DISALLOWANCE CANNOT BE INVOKED. WE NOTE THAT THE ASSESSEE HAS SUO MOTO DI SALLOWED AN AMOUNT OF RS.2,61,793/-, THEREFORE, LD. CIT(A)/AO ERRED IN MECHANICALLY APPL YING RULE 8D R.W.S. 14A OF THE ACT FOR DISALLOWING EXPENDITURE TO EARN EXEMPT INCOME, WHEN ASSESSEE DID NOT EARN ANY EXEMPT INCOME. IN THE FACTS AS DISCUSSED THE DISALLOWANCE OUGHT TO HAVE BEEN RESTRICTED TO THIS AMOUNT OF RS.2,61,793/- WHICH THE ASSESSEE HAS SUO MOTO OFFERED TO TAX AND THE AO OUGHT NOT TO HAVE APPLIED THE RULE 8D OF THE RULES FOR CA LCULATION OF DISALLOWANCE U/S. 14A READ WITH RULE 8D. THEREFORE, THE ADDITION MADE BY THE AO IS DIRECTED TO BE DELETED. 4. GROUND NO. 3 AND 4 ARE GENERAL IN NATURE AND THE REFORE, NO ADJUDICATION IS REQUIRED AND, HENCE, THE SAME ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13TH MARCH , 2019. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED : 13TH MARCH, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. ICHARAJ VINIMAY PVT. LTD., C/O, RSVPC & COMPANY, 41A, A.J.C. BOSE ROAD, SUITE NO. 613, 6 TH FLOOR, KOLKATA-700 017. 2 RESPONDENT ITO, WARD-6(4), KOLKATA 3. 4. CIT(A)-2, KOLKATA (SENT THROUGH E-MAIL) CIT, KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR