SHRI K. THIAGARAJAN, MADURAI V. ACIT, NCC - 3, , MADURAI

ITA 2074/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5710 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 12-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R ANITHA
• Assessee Lawyers: N ARJUN RAJ C A SHRI S SRIDHAR
• Keywords: Earning of tax free income; Rule 8D
• Section: 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH, CHENNAI , . , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NOS.2073 & 2074/CHNY/2019 ( [ [ / ASSESSMENT YEARS: 2009-10 & 2012-13) SHRI K. THIAGARAJAN, THIAGARAJAN MILLS PREMISES, KAPPALUR, MADURAI 625 008. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 3, MADURAI. PAN: AEAPT 3548N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI N. ARJUNRAJ, CA FOR SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : MS. R. ANITHA, JCIT /DATE OF HEARING : 06.02.2020 /DATE OF PRONOUNCEMENT : 13.02.2020 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 1,MADURAI, (IN SHORT CIT(A)) DATED 03.06.2019 FOR THE ASSESSMENT YEARS 2009-10 & 2012-13. 2 I.T.A. NOS. 2073 & 2074/CHNY/2019 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL. RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 WAS FILED ON 28.07.2009 DISCLOSING INCOME OF RS.3,64,185/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 22.09.2011 PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ACCEPTING THE RETURNED INCOME. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S.148 OF THE ACT DATED 07.03.2016. IN RESPONSE TO IT, THE APPELLANT FILED THE RETURN OF INCOME ON 10.03.2016 DISCLOSING THE SAME INCOME AS ORIGINAL RETURN AND THE ASSESSMENT WAS COMPLETED BY AN ORDER DATED 30.12.2016 PASSED U/S.143(3) R.W.S. 147 OF THE ACT, AT A TOTAL INCOME OF RS.797,787/-, AFTER MAKING AN ADDITION OF RS.4,33,602/- U/S.14A OF THE ACT, REJECTING THE CONTENTION OF THE APPELLANT THAT NO EXPENDITURE WAS CLAIMED AS DEDUCTION TO EARN EXEMPT INCOME. BEING AGGRIEVED BY THE ABOVE ADDITION, AN APPEAL WAS PREFERRED BEFORE THE CIT(A), WHO VIDE IMPUGNED ORDER CONFIRMED THE ACTION OF THE AO. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. 3. THE LD.COUNSEL VEHEMENTLY SUBMITTED THAT NO EXPENDITURE WAS CLAIMED AS DEDUCTION AND THEREFORE THE QUESTION OF DISALLOWANCE 3 I.T.A. NOS. 2073 & 2074/CHNY/2019 U/S.14A OF THE ACT , DOES NOT ARISE, AS NO NOTIONAL EXPENDITURE CAN BE DISALLOWED. HE ALSO FILED THE FINANCIAL STATEMENT IN SUPPORT OF HIS CONTENTIONS. ON THE OTHER HAND, THE LD.DR HAD NOT OPPOSED THE ABOVE SUBMISSIONS. 4. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE RELATES TO THE DISALLOWANCE U/S.14A OF THE ACT. ADMITTEDLY, THE APPELLANT HAD NOT MADE ANY CLAIM FOR DEDUCTION OF ANY EXPENDITURE UNDER BUSINESS HEAD. THEREFORE IT IS SETTLED POSITION OF LAW THAT NO NOTIONAL EXPENDITURE CAN BE DISALLOWED U/S.14A OF THE ACT, IN THE ABSENCE OF ANY ACTUAL EXPENDITURE INCURRED. THE PROVISO TO RULE 8D CLEARLY PROVIDES THAT THE AMOUNT OF DISALLOWANCE COMPUTED UNDER THE PROVISIONS OF RULE 8D CANNOT EXCEED THE ACTUAL EXPENDITURE INCURRED. IN THE LIGHT OF THESE FACTS AND LEGAL POSITION, WE ALLOW THE APPEAL FILED BY THE ASSESSEE. 5. FOR THE ASSESSMENT YEAR 2012-13, THE AMOUNT OF EXPENDITURE CLAIMED IS ONLY RS.8000/-. HENCE, THE AMOUNT OF DISALLOWANCE IS RESTRICTED TO RS.8000/-. 4 I.T.A. NOS. 2073 & 2074/CHNY/2019 6. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 IS ALLOWED AND FOR THE ASSESSMENT YEAR 2012-13 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13 TH FEBRUARY, 2020 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) / JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 13 TH FEBRUARY, 2020. RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. [ /GF