M/s. Dadha Pharma Pvt. Limited, CHENNAI V. ACIT, CHENNAI

ITA 2117/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86250 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: D ANAND
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , ! , ' #$ BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 2117/MDS/2013 ' % &% / ASSESSMENT YEAR : 2007-08 M/S DADHA PHARMA PVT. LTD., NO.268, LLOYDS ROAD, ROYAPETTAH, CHENNAI - 600 014. PAN : AAACD 1265 F V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(4), CHENNAI - 600 034. (!(/ APPELLANT) (*+!(/ RESPONDENT) !( , - / APPELLANT BY : SHRI D. ANAND, ADVOCATE *+!( , - / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT . , / / DATE OF HEARING : 22.01.2015 01& , / / DATE OF PRONOUNCEMENT : 22.01.2015 / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 27.09.2013, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, CHENNAI AND IT RELATES TO ASSESSME NT YEAR 2007- 08. THE ONLY ISSUE RAISED IN THE APPEAL RELATES TO DISALLOWANCE CONFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO. 2117/MDS/2013 2. THE LD.COUNSEL APPEARING FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAD EARNED DIVIDEND INCOME OF ` 1,15,774/-. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE IN TERM S OF RULE 8D OF INCOME-TAX RULES, 1962 THOUGH THE SAME SHALL NOT BE APPLICABLE FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE LD. CIT (APPEALS) HAS SUSTAINED THE DISALLOWANCE WITHOUT APPRECIATING THE FACT THAT THE PROVISIONS OF RULE 8D ARE NOT APPLICABLE FOR ASSESS MENT YEAR 2007- 08. THE LD. COUNSEL PLACED RELIANCE ON THE DECISIO N RENDERED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT V. THE NUNGAMBAKKAM SASWATHA DHANA RAKSHAKA NIDHI LTD. IN I.T.A. NO. 1138/MDS/2013 BY ORDER DATED 05.08.2013 AND SUBMITT ED THAT THE CO-ORDINATE BENCH HAS HELD THAT THE DISALLOWANCE UN DER SECTION 14A SHOULD BE MADE AT 2% OF THE DIVIDEND INCOME. A CCORDINGLY, HE PRAYED THAT THE DISALLOWANCE UNDER SECTION 14A SHOU LD BE RESTRICTED TO THAT EXTENT ONLY. 3. WE HEARD THE SUBMISSIONS OF LD. D.R. WE ALSO N OTICE THAT THE HON'BLE MADRAS HIGH COURT HAS ALSO HELD IN THE CASE OF M/S SIMPSON & CO. LTD. V. DCIT IN TAX CASE (APPEAL) NO. 2621 OF 2006 DATED 15.10.2012 THAT THE DISALLOWANCE MADE TO THE EXTENT OF 2% OF THE DIVIDEND INCOME UNDER SECTION 14A IS REASONABLE IN THE YEAR IN WHICH RULE 8D IS NOT APPLICABLE. IN VIEW OF THIS, WE SET ASIDE THE 3 I.T.A. NO. 2117/MDS/2013 ORDER OF THE LD. CIT(APPEALS) AND DIRECT THE ASSESS ING OFFICER TO RESTRICT THE DISALLOWANCE TO 2% OF THE DIVIDEND INC OME EARNED BY THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT AFTER CONCLUSION O F HEARING ON THE 22 ND DAY OF JANUARY, 2015 AT CHENNAI. SD/- SD/- ( ! ) ( .. ) (VIKAS AWASTHY) (B.R. BASKARAN) ' /JUDICIAL MEMBER /ACCOUNTANT MEMBER /CHENNAI, A /DATED, THE 22 ND JANUARY, 2015. KRI. B , *'/C D &/ /COPY TO: 1. !( /APPELLANT 2. *+!( /RESPONDENT 3. . E/ () /CIT(A)-I, CHENNAI 4. . E/ /CIT, CHENNAI-I, CHENNAI 5. FG *'/' /DR 6. GH% I /GF.