Jayaraghavi Farms & Orchards Private Limited , Mumbai V. DCITCorporate Circle 2 , Coimbatore

ITA 2070/CHNY/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2044 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-05-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 24-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS D ROHINI
• Assessee Lawyers: T BANUSEKAR
• Keywords: Earning of tax free income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , . , & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.2070 & 2071/CHNY/2017 /ASSESSMENT YEAR: 2013-14 M/S.JAYARAGHAVI FARMS & ORCHARDS- PVT. LTD., NO.1, PARIJAT, MULUND SAHAKAR VISHWA CHS LTD., HEERA NAGAR, NAHUR ROAD, MULUND (WEST), MUMBAI-400 080. [PAN: AAACJ 6808 N] VS. THE DY. COMMISSIONER- OF INCOME TAX, CORPORATE CIRCLE-2, COIMBATORE. ( ( /APPELLANT) ( ) *( /RESPONDENT) ( + / APPELLANT BY : MR.T.BANUSEKAR, CA )*( + /RESPONDENT BY : MRS.D.ROHINI, JCIT + /DATE OF HEARING : 18.06.2019 + /DATE OF PRONOUNCEMENT : 18.06.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO.2071/CHNY/2017 IS AN APPEAL FILED BY THE AS SESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-1, COIMBATORE, IN APPEAL NO.123/16-17 DATED 04.05.2017, AGAINST THE Q UANTUM ADDITION IN RESPECT OF DISALLOWANCE MADE BY INVOKING THE PROVIS IONS OF SEC.14A, FOR THE AY 2013-14. ITA NO.2070/CHNY/2017 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)- 1, COIMBATORE, IN APPEAL NO.148/16-17 DATED 04.05.2 017, AGAINST THE ITA NOS.2070 & 2071/CHNY/2017 :- 2 -: CONFIRMATION OF LEVY OF PENALTY U/S.271(1)(C) OF TH E ACT, FOR THE AY 2013- 14. 2. MRS.D.ROHINI, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR.T.BANUSEKAR, CA, REPRESENTED ON BEHALF OF THE AS SESSEE. 3. IN RESPECT OF THE APPEAL IN ITA NO.2071/CHNY/201 7, IT WAS SUBMITTED BY THE LD.AR THAT THE ONLY ISSUE IN THE A PPEAL OF THE ASSESSEE WAS AGAINST THE CONFIRMATION OF THE DISALLOWANCE MA DE BY INVOKING THE PROVISIONS OF SEC.14A OF THE ACT. IT WAS A SUBMISS ION THAT AT THE FIRST INSTANCE, NO SATISFACTION HAS BEEN RECORDED BY THE AO FOR INVOKING THE PROVISIONS OF SEC.14A IN THE HANDS OF THE ASSESSEE. IT WAS A SUBMISSION THAT THE EXEMPT INCOME EARNED BY THE ASSESSEE WAS O NLY TO THE EXTENT OF RS.20,20,000/- AND IN VIEW OF THE DECISION OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF M/S.JOINT INVESTMENTS PVT. LTD., REP ORTED IN 372 ITR 694 DELHI, THE DISALLOWANCE U/S.14A WAS LIABLE TO BE RE STRICTED TO THE EXEMPT INCOME. 3.1 IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE OR DER OF THE AO AND THE LD.CIT(A). 3.2 IT WAS A SUBMISSION THAT THE SATISFACTION HAS B EEN RECORDED BY THE AO IN PARA NOS.4.1 & 4.2 OF THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF M/S.JOINT ITA NOS.2070 & 2071/CHNY/2017 :- 3 -: INVESTMENTS PVT. LTD., HAS NOT BEEN ACCEPTED BY THE REVENUE AND THE APPEAL WAS PENDING. 3.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 3.4 A PERUSAL OF THE ASSESSMENT ORDER IN PARA NO.4. 1 CLEARLY SHOWS THAT THE AO HAS RECORDED THE SATISFACTION FOR INVOKING T HE PROVISIONS OF SEC.14A OF THE ACT. A PERUSAL OF THE SAID ORDER ALSO SHOW S THAT THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE DE LHI HIGH COURT IN THE M/S.JOINT INVESTMENTS PVT. LTD., REFERRED TO SUPRA. IT IS NOTICED THAT THE AO HAS PREFERRED FOLLOWING CIRCULAR ISSUED BY THE C BDT NO.5 OF 2014 DATED 11.02.2014. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT THE LD.CIT(A) HAS ALSO CONFIRMED THE ORDER OF THE AO. A PERUSAL OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF M/S.JOINT INVESTMENTS PVT. LTD., REFERRED TO SUPRA, CLEARLY S HOWS THAT THE SAID DECISION RESTRICTS THE DISALLOWANCE U/S.14A TO THE EXEMPT INCOME EARNED. THIS BEING SO, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S.JOINT INVESTMENTS PVT. LTD ., THE AO IS DIRECTED TO RESTRICT THE DISALLOWANCE U/S.14A TO THE EXTENT OF EXEMPT INCOME CLAIMED. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IN I TA NO.2071/CHNY/2017 IS PARTLY ALLOWED. 4. IN RESPECT OF THE APPEAL IN ITA NO.2070/CHNY/201 7, IT WAS SUBMITTED BY THE LD.AR THAT IN THE APPEAL BEFORE TH E LD.CIT(A), THE ITA NOS.2070 & 2071/CHNY/2017 :- 4 -: ASSESSEE HAD CHALLENGED THE ISSUE ON MERITS AS ALSO ON TECHNICALITY. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD ADJUDICATED THE APPEAL OF THE ASSESSEE IN RESPECT OF THE TECHNICALITY BEING RECOR DING THE SATISFACTION FOR THE PURPOSE OF INITIATING AND LEVY OF PENALTY U/S.2 71(1)(C) OF THE ACT. THE LD.CIT(A) HAD NOT GIVEN ANY ADJUDICATION ON THE MER ITS WHICH HAS BEEN CHALLENGED BY THE ASSESSEE. IT WAS A PRAYER THAT T HE ISSUE MAY BE RESTORED TO THE FILE OF THE LD.CIT(A) FOR ADJUDICAT ING THE ISSUE ON MERITS OF THE ADDITION WHICH HAS BEEN CHALLENGED. IT WAS A B ASIC SUBMISSION THAT GROUND NOS.1-6 BEFORE THE LD.CIT(A) HAD NOT BEEN AD JUDICATED. IT WAS A SUBMISSION THAT THE ISSUES IN THIS APPEAL MAY BE RE STORED TO THE FILE OF THE LD.CIT(A). 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 4.2 A PERUSAL OF THE ORDER OF THE LD.CIT(A) CLEARLY SHOWS THAT THE LD.CIT(A) HAS THOUGH RECORDED THE SUBMISSIONS OF TH E ASSESSEE, HAS GIVEN ADJUDICATION ON THE TECHNICAL GROUND RAISED BY THE ASSESSEE IN RESPECT OF THE SATISFACTION. IN RESPECT OF THE MERITS OF THE A DDITION, NO FINDINGS HAS BEEN GIVEN BY THE LD.CIT(A). IN THESE CIRCUMSTANCE S, THE ISSUES IN THIS APPEAL MAY BE RESTORED TO THE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION IN RESPECT OF THE MERITS OF THE ADDITION IN RESPECT OF WHICH PENALTY HAS BEEN LEVIED. CONSEQUENTLY, THE APPEAL FILED BY THE ASSES SEE IN ITA NO.2070/CHNY/2017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.2070 & 2071/CHNY/2017 :- 5 -: 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.2071/CHNY/2017 IS PARTLY ALLOWED AND THE APPEAL FILED BY THE ASSESSEE IN ITA NO.2070/CHNY/2017 IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 18 TH DAY OF JUNE, 2019, IN CHENNAI. SD/- SD/- ( . ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED: 18 TH JUNE, 2019. TLN + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. /GF