M/s. Khazana Tradelinks Pvt. Ltd., , Mumbai V. ITO, Ward - 3(1), Kolkata

ITA 2186/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7323 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-07-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: MIRAJ D. SHAH
• Section: 14A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER] I.T.A. NO. 2186/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. KHAZANA TRADELINKS PVT. LTD...APPELLANT 14 TH FLOOR, MAKER CHAMBERS IV 222, NARIMAN POINT MUMBAI 400 021 [PAN : AABCK 2127 L] INCOME TAX OFFICER, WARD 3(1), KOLKATA.........................................................RESPONDENT APPEARANCES BY: SHRI MIRAJ D. SHAH, A/R, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SANKAR HALDER, JCIT SR. D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 10 TH , 2019 DATE OF PRONOUNCING THE ORDER : JULY 24 TH , 2019 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1, KOLKATA, (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 31/07/2018, FOR THE ASSESSMENT YEAR 2014-15. 2. AT THE OUTSET WE FIND THAT THERE IS A DELAY OF 13 DAYS IN FILING OF THIS APPEAL. AFTER PERUSING THE PETITION FOR CONDONATION, I AM CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE APPEAL ON TIME. HENCE THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 3. I HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, I HOLD AS FOLLOWS:- 4. GROUND NOS. 1 & 2 ARE ON THE ISSUE OF DISALLOWANCE U/S 14A OF THE ACT. THE DIVIDEND INCOME EARNED BY THE ASSESSEE DURING THE YEAR WHICH IS EXEMPT IS RS.15,000/-. HENCE THE DISALLOWANCE IN QUESTION U/S 14A OF THE ACT, CANNOT EXCEED 2 I.T.A. NO. 2186/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. KHAZANA TRADELINKS PVT. LTD THIS AMOUNT OF RS.15,000/-, AS HELD BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S ASHIKA GLOBAL SECURITIES LTD IN ITAT 100 OF 2014/GA 2122 OF 2014 JUDGMENT DT. 11 JUNE, 2018. THE DISALLOWANCE IN EXCESS OF RS.15,000/- U/S 14A OF THE ACT, HAS TO BE DELETED. ACCORDINGLY, GROUND NOS. 1 & 2 ARE ALLOWED. 5. GROUND NOS. 3 & 4 ARE ON THE ISSUE OF APPLICATION OF EXPLANATION TO SECTION 73 OF THE ACT. THE ASSESSEES CASE IS THAT IT FALLS WITHIN THE EXCEPTIONS CARVED OUT TO THE EXPLANATION TO SECTION 73 OF THE ACT. 5.1. I FIND THAT THE ASSESSEE IS A REGISTERED NON BANKING FINANCIAL COMPANY WITH THE RESERVE BANK OF INDIA. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SHREE SALASAR PROPERTIES & FINANCE (P) LTD. IN ITA NO. 860 OF 2008, JUDGMENT DT. 12 TH JANUARY, 2009 , HELD AS FOLLOWS:- THE TRIBUNAL AFTER TAKING INTO CONSIDERATION OF ALL THESE FACTS AND THE FACT WHICH COULD REVEAL THAT THE COMPANY HAS DERIVED ITS MAJOR INCOME BY WAY OF INTEREST. THEREFORE, THE FACT OF PRINCIPAL BUSINESS OF THE COMPANY BEING THAT OF GRANTING OF LOANS AND ADVANCES DOES NOT REMAIN IN DOUBT AND THEREFORE IT WAS HELD THAT THE ASSESSEES PRINCIPAL BUSINESS WOULD FALL IN EXEMPTED CATEGORY AND SHOULD NOT HIT BY THE EXPLANATION TO SECTION 73 OF THE INCOME TAX ACT, 1961. ON THIS GROUND THE APPEAL WAS ALLOWED AND THE LEARNED TRIBUNAL ALSO AFTER DEALING WITH THE MATTER IN QUESTION CAME TO THE CONCLUSION THAT THE FACT, AS HAS BEEN DEALT WITH BY THE COMMISSIONER OF INCOME TAX, IS CORRECT AND UPHOLD THE DECISION OF THE COMMISSIONER OF INCOME TAX (APPEALS). 5.2. IN THE ABOVE CASE, THE HONBLE JURISDICTIONAL HIGH COURT HAS LAID DOWN INCOME CRITERIA TO DETERMINE AS TO WHAT IS THE PRINCIPAL BUSINESS OF THE ASSESSEE. APPLYING THE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE-LAW TO THE FACTS OF THE CASE ON HAND, I FIND THAT THE INCOME OF THE ASSESSEE FOR THE LAST 6 (SIX) YEARS IS AS FOLLOWS:- 3 I.T.A. NO. 2186/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. KHAZANA TRADELINKS PVT. LTD 5.2.1. AS INCOME FROM INTEREST IS MUCH HIGHER THAN THE INCOME FROM BUSINESS IN SHARES, AND AS THE ASSESSEE IS A REGISTERED NBFC I HAVE TO NECESSARILY HOLD THAT THE PRINCIPAL BUSINESS OF THE ASSESSEE IS GRANTING OF LOANS AND ADVANCES. HENCE THE ASSESSEE FALLS UNDER THE EXCEPTION CARVED OUT IN EXPLANATION TO SECTION 73 OF THE ACT. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 24 TH DAY OF JULY, 2019. SD/- [ J. SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED : 24.07.2019 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. KHAZANA TRADELINKS PVT. LTD 14 TH FLOOR, MAKER CHAMBERS IV 222, NARIMAN POINT MUMBAI 400 021 2. INCOME TAX OFFICER, WARD 3(1), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES