Nav Bharat Roller Flour Mills (P) Ltd., , Siliguri V. ITO, Ward - 1(3), , Jalpaiguri

ITA 2125/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1398 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 09-10-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B - SMC BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM ] I .T.A NO. 2 125 /KOL/2018 ASSESSMENT YEAR : 20 1 4 - 1 5 M/S. NAV BHARAT ROLLER V.S I.T.O. WARD 1(3), JALPAIGURI FLOUR MILLS P.LTD PAN: AACCN 4807D (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI P.K. SANGHAI, FCA, LD.AR FOR THE RESPONDENT : SHRI C.J. SINGH, JCIT, LD.SR.DR DATE OF HEARING : 07 - 03 - 2019 DATE OF PRONOUNCEMENT: 20 - 03 - 2019 ORDER 1. TH IS ASSESSE S APPEAL IS DIRECTED AGAINST THE CIT(A) , JALPAIGURIS ORDER , DATED 29 - 08 - 2018 PASSED IN CASE NO. 50/ CIT(A) /JAL/2016 - 17 INVOLVING PROCEEDINGS U/S 143(3) OF THE I.T ACT , 1961 ( IN SHORT ACT) . HEARD BOTH THE SIDES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION INVOKING SECTION 14A/ R.W RULE 8D (2) (II) AND (III) PROPORTIONATE INTEREST AND ADMINISTRATIVE EXPENDITURE DISALLOWANCE (S) AMOUNTING TO RS. 9,32,733/ - AND RS. 59,127/ - RESPECTIVELY TOTALING TO RS. 9,91,860/ - . IT EMERGES DURING THE COURSE OF HEARING THAT THE ASSESSEES INTEREST FREE FUNDS AMOUN T S TO RS.3.4 8 CRORES AS AGAINST ITS INVESTMENT S OF RS. 1.18 CRORES IN YIELDING EXEMPT INCOME. I THEREFORE REJECT THE 2 ITA N O. 2125/KOL/2018 - SMC NAV BHARAT ROLLER FLOUR MILLS P.LTD 2 REVENUES ARGUMENTS IN VIEW OF HONBLE BOMBAY HIGH COURTS DECISION IN CIT V/S RELIANCE UTILITY POWER LTD 313 ITR 314 (BOM) THAT THE NECESSARY PRESU MPTION IN SUCH A CASE IS OF UTILIZATION OF INTEREST FREE FUNDS ONLY. I THEREFORE DELETE FORMER DISALLOWANCE COMPONENT OF RS. 9,32,733/ - . 3. COMING TO LATER ADMINISTRATIVE EXPENDITURE DISALLOWANCE COMPONENT OF RS. 59,127/ - , I FIND THAT THE A SSESSING O F FICER HAS RIGHTLY CALCULATED THE SAME AT 0.5% OF AVERAGE VALUE OF INVESTMENT PRESCRIBED IN THE STATUTORY FORMULA. I FURTHER FIND THAT THERE IS NO INDICATION IN LOWER AUTHORITIES FINDING AS TO WHETHER THEY HAVE CON SIDERED ONLY THE EXEMPT INCOME YIELDING INVESTMENTS OR NOT AS PER HONBLE JURISDICTIONAL HIGH COURTS DECISION IN P CIT V/S REI AGRO LTD IN ITA 220 OF 2013. I THEREFORE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE IMPUGNED DISALLOWANCE QUA EXEMPT INCOME YIELDING INVESTMENTS ONLY. NECESSARY COMPUTATION TO FOLLOW. . 4. THIS A SSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS . ORDER PRONOUNCED IN THE COURT ON 20 - 03 - 2019 SD/ - [ S.S.GODARA ] JUDICIAL MEMBER DATED : 20 - 03 - 2019 * PP , SR. PS COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: M/S. NAV BHARAT ROLLER FLOUR MILLS (P) LTD. M.R ROAD, SILIGURI - 734401. 2. RESPONDENT/ DEPARTMENT : THE ITO, W 1(3) , JALPAIGURI . 3..C.I.T (A) . - 4. C.I.T. - KOLKATA. 5. CI T(DR), KOLKATA BENCHES, KOLKATA TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA 3 ITA N O. 2125/KOL/2018 - SMC NAV BHARAT ROLLER FLOUR MILLS P.LTD 3