DCIT, CHENNAI V. Rattha Holding Company Pvt Ltd., CHENNAI

ITA 2228/CHNY/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 7191 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 31-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. BHARATH
• Assessee Lawyers: HEMALATHA. K
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN , ACCOUNTANT MEMBER ./ ITA NO. 2228 /CHNY/ 201 9 / ASSESSMENT YEAR: 201 5 - 1 6 THE D EPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE - 5 (1), ROOM NO .414 ,4 TH FLOOR, MAIN BUILDING, 121, UTHAMAR GANDHI SALAI , NUNGAMBAKKAM, CHENNAI 600 034. VS. M/S. RATTHA HOLDING COMPANY PVT. LIMITED., NO.51, 6 TH FLOOR, TEK MEADOWS, RAJIV GANDHI SALAI, SHOLINGANALLUR, C HENNAI 600 119. [PAN: A ACCR 8160K ] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : M R. S. BHARATH, CIT /RESPONDENT BY : M S. HE M ALATHA . K , ACA / DATE OF HEARING : 18 . 1 2 .2019 / DATE OF PRONOUNCEMENT : 18 .12 .2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 3 , CHENNAI I N ITA NO. 120/2017 - 18/A - 3 DATED 29 .0 5 .201 9 FOR THE ASSESSMENT YEAR 201 5 - 1 6 . 2. MR. S. BHARATH, CIT REPRESENTED ON BEHALF OF THE REVENUE AND MS. HEMALATHA. K, ACA REPRESENTED ON BEHALF OF THE ASSESSEE . ITA NO. 2228 / CHNY / 201 9 : - 2 - : 3. THE ONLY ISSUE IN THE REVENUES APPEAL IS AGAINST THE ACTION OF THE LEARNED CIT(A) IN HOLDING THAT THE PROVISIONS OF S ECTION 14A R.W.RULE 8D OF THE INCOME TAX RULES ARE APPLICABLE ONLY WHEN THE ASSESSEE EARNS INCOME WHICH DOES NOT BE PART OF HIS TOTAL INCOME. IT WAS FAIRLY AGREED BY BOTH THE SIDES FOR THE RELEVANT ASSESSMENT YEAR THAT THE ASSESSEE HAS NOT EARNED ANY EXEM PT INCOME . 4. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN THE ASSESSMENT YEAR 2014 - 15, WHEREIN THE CO - ORDINATE BENCH FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF REDINGTON INDIA LIMITED VS. ACIT [2017] 77 TAXMANN.COM 257 (MAD) AND THE COMMISSIONER OF INCOME TAX VS. CHETTINAD LOGISTICS (P) LIMITED [2017] 80 TAXMANN.COM 221 (MAD) HAD HELD THAT THE ASSESSEE HAVING NOT EARNED ANY EXEMPT INCOME, THE PROVISION OF SECTION 14A CANNOT BE INVOKED IN THE HANDS OF THE ASSESSEE. 5. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) . 6 . WE HAVE CO NSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 7. A PERUSAL OF THE ORDER OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2014 - 15 IN I.T.A. ITA NO. 2228 / CHNY / 201 9 : - 3 - : NO.576/CHNY/2018 DATED 31.07.2018 SHOWS T HAT THE CO - ORDINATE BENCH HAS HELD AS FOLLOWS IN PARA - 3 TO 5. 3. M/S. RATHNA HOLDING COMPANY PRIVATE LIMITED, THE ASSESSEE IS A BUILDING PROMOTER. WHILE MAKING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2014 - 15, THE ASSESSING OFFICER NOTICED THAT THE ASSES SEE COMPANY HAD MADE INVESTMENTS IN EQUITY INSTRUMENTS AND IN SUBSIDIARY COMPANIES AT RS.1,27,33,79,496/ - AS ON 31.03.2014 AS AGAINST RS.41,70,39,640/ - STOOD AS ON 31.03.2013. INVOKING THE PROVISIONS OF SECTION 14A R.W.R.8D(II) & (III), THE AI DISALLOWED RS.8,82,27,938/ - . AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) RELYING ON THE JURISDICTIONAL ITAT DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2010 - 11 & 2011 - 12 IN I.T.A. NOS.2220 & 2221/MDS/2014 AND I .T.A. NOS.2015, 2055 & 2056/MDS/2014, WHEREIN THE TRIBUNAL RELIED ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF SMT. LEENA RAMACHANDRAN, KARNATAKA HIGH COURT IN THE CASE OF PRADEEP KAR VS. ACIT, UPHELD THE ORDER PASSED BY THE ASSESSING OFFICER, D ISMISSED THE APPEAL. 4. AGGREIVED, THE ASSESSEE FILED THIS APPEAL. THE LEARNED AR RELYING ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF REDINGTON INDIA LIMITED VS. ACIT [2017] 77 TAXMANN.COM 257 (MAD) AND THE CIT VS. CHETTINAD LOGISTIC S (P) LIMITED [2017] 80 TAXMANN.COM 221 (MAD), TCA NO.24 OF 2017, PLEADED THAT SINCE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME, SECTION 14A CANNOT BE INVOKED. PER CONTRA, THE LEARNED DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. SINCE, THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME, FOLLOWING THE JURISDICTIONAL HIGH COURT DECISIONS, SUPRA, WE HOLD THAT SECTION 14A CANNOT BE INVOKED AND HENCE, ALLOW THE ASSESSEES APPEAL. 8. A PERUSAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. THIS BEING SO, AS IT IS NOTICED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND ALSO IT IS NOTICED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT REFERRED TO SUPRA, WE FIND ITA NO. 2228 / CHNY / 201 9 : - 4 - : NO REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A). CONSEQUENTLY, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. 9 . IN THE RE SULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER , 2019 IN CHENNAI. SD/ - ( . ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER / CHENNAI, / DATED: 18 TH DECEMBER , 2 019 . IA, SR. PS SD/ - ( ) (GEORGE MATHAN) /JUDICIAL MEMBER / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF