R.N. Sahni, New Delhi V. JCIT, New Delhi

ITA 210/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4574 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 12-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH KUMAR GUPTA SR DR
• Assessee Lawyers: MOHINDER SINGH
• Keywords: Rule 8D
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI , !' $ %$$& , ( ) ' BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT & SHRI O.P.KANT, ACCOUNTANT MEMBER $ / ITA NO.210/DEL/2017 * + + / ASSESSMENT YEAR 2011-12 R.N.SAHNI, 51, PASCHIM MARG, VASANT VIHAR, NEW DELHI-110057. PAN-ABJPS2875D .......... ,- /APPELLANT VS THE JCIT, RANGE-24, NEW DELHI. . ./,- / RESPONDENT ,-0% / APPELLANT BY : SH. MOHINDER SINGH, CA ./,-0% / RESPONDENT BY : SH. SATISH KUMAR GUPTA, SR.DR 0&( / DATE OF HEARING : 20.02.2020 12 0&( / DATE OF PRONOUNCEMENT: 21.02.2020 3 / ORDER PER SUSHMA CHOWLA, VP THE PRESENT APPEAL FILED BY ASSESSEE IS AGAINST ORD ER OF CIT(A)-11, NEW DELHI DATED 20.12.2016 RELATING TO ASSESSMENT YEAR 2011-12 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE LD.AR FOR THE ASSESSEE MOVED AN APPLICATION FOR ADJOURNMENT HOWEVER, BECAUSE OF THE NATURE OF THE ISSUES INVOLV ED, THE ADJOURNMENT APPLICATION WAS REFUSED. ITA NO.210/DEL/2017 ASSESSMENT YEAR 2011-12 2 3. THE FIRST ISSUE WHICH IS RAISED BY WAY OF GROUND OF APPEAL NOS. 1 & 2 IS AGAINST THE DISALLOWANCE MADE U/S 14A R.W.RULE 8 D OF THE INCOME TAX RULES (IN SHORT RULES). THE ASSESSING OFFICER HA D MADE THE AFORESAID DISALLOWANCE IN LINE WITH THE PROVISION OF RULE 8D OF IT RULES. HOWEVER, WE FIND FROM THE PERUSAL OF THE CIT(A)S ORDER ITSELF THAT THE CIT(A) HAD NOTED THE FACT THE DIVIDEND INCOME RECEIVED BY THE ASSESS EE OF RS.10,581/- IN PARA 4.3.1 OF THE APPELLATE ORDER. THE DISALLOWANCE MAD E U/S 14A OF THE ACT AMOUNTS TO RS.15,10,519/-. 4. THE HONBLE DELHI HIGH COURT IN CHEMINVEST LTD. VS CIT, 378 ITR 33 (DELHI) HAS HELD THAT THE DISALLOWANCE U/S 14A OF T HE ACT R.W. RULE 8D OF THE RULES CANNOT EXCEED THE DIVIDEND INCOME RECEIVED BY THE ASSESSEE. 5. APPLYING THE SAID RATIO TO THE ISSUE INVOLVED, W E DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE MADE U/S 14A R .W. RULE 8D TO RS.10,581/-. THUS, GROUND OF APPEAL NOS. 1 & 2 RAI SED BY THE ASSESSEE ARE ALLOWED. 6. NOW COMING TO THE 2 ND ISSUE VIDE GROUND NO.3, THE ASSESSEE IS AGGRIEVED BY THE DISALLOWANCE MADE OUT A FOREIGN TR AVEL EXPENSES AMOUNTING TO RS.2,45,628/-. THE ASSESSEE WAS RUNNING A RESOR T AND HAD CLAIMED TRAVELLING EXPENSES OF RS.2,45,628/- ON HIS TRIP TO LONDON. THE ASSESSEE EXPLAINED THAT THE SAID FOREIGN TRIP WAS MADE FOR B USINESS PURPOSES TO HAVE A MEETING WITH THE FOREIGN TRAVEL AGENT, FROM WHOM THE ASSESSEE WAS RECEIVING THE BUSINESS. THE ASSESSING OFFICER DISA LLOWED THE SAID EXPENDITURE ON THE GROUND THAT NO DOCUMENTARY EVIDE NCE WAS FILED IN ITA NO.210/DEL/2017 ASSESSMENT YEAR 2011-12 3 RESPECT OF FOREIGN TRAVEL EXPENSES INCURRED IN LOND ON. THE CIT(A) UPHELD THE DISALLOWANCE MADE. THE ASSESSEE IS IN APPEAL A GAINST THE SAME. 7. ON THE PERUSAL OF RECORD, WE ARE OF THE VIEW TH AT IT IS FOR THE ASSESSEE TO DECIDE THE COURSE OF ITS BUSINESS AND IN THE SCE NARIO OF BUSINESS DEVELOPMENT, THE EXPENDITURE ON FOREIGN TRAVELLING MERITS TO BE ALLOWED IN THE HANDS OF THE ASSESSEE. THUS, GROUND NO.3 RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2020. SD/- SD/- (O.P.KANT) ( SUSHMA CHOWLA) () /ACCOUNTANT MEMBER !' / VICE PRESIDENT / DATED : 21 ST FEBRUARY, 2020 * AMIT KUMAR * 30.*&4565&7 COPY OF THE ORDER IS FORWARDED TO : 1. ,- / THE APPELLANT 2. ./,- / THE RESPONDENT 3. 8& 9 : / THE CIT(A) 4. ; 8& / THE PR. CIT 5. 6. 5<=.*&* > > / DR, ITAT, DELHI =?+7 GUARD FILE. 3 / BY ORDER , /5&.*& // TRUE COPY // @ AB)C , > ASSISTANT REGISTRAR, ITAT, DELHI