Multiplex Capital Ltd., Delhi V. ITO, Ward-17(2), New Delhi

ITA 2289/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5297 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2289/DEL/2018 ASSESSMENT YEAR: 2013-14 MULTIPLEX CAPITAL LTD., 100/28, KESHAV TOWER, RAJAPUR MARKET, SECTOR-9, ROHINI, NEW DELHI. PAN: AAACM1761B VS. ITO, WARD-17(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY WADHWA, ADVOCATE REVENUE BY : SHRI S.L. ANURAGI, SR.DR DATE OF HEARING : 13.08.2019 DATE OF PRONOUNCEMENT : 21.08.2019 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH JANUARY, 2018 OF THE CIT(A)-36, NEW DELHI, RELATING TO ASSES SMENT YEAR 2013-14. 2. THE ASSESSEE, IN THE VARIOUS GROUNDS OF APPEAL H AS CHALLENGED THE ORDER OF THE CIT(A) SUSTAINING THE ADDITION OF RS.1,66,506/- OUT OF DISALLOWANCE OF RS.6,49,130/- MADE BY THE ASSESSING OFFICER U/S 14A READ WITH RULE 8D OF THE IT RULES, 1962. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE COMPANY IS A STOCK EXCHANGE AND DEPOSITORY MEMBER DEALING IN SHARES. IT FILED ITS RETURN OF INCOME ON 29 TH ITA NO.2289/DEL/2018 2 SEPTEMBER, 2013 DECLARING LOSS OF RS.42,327/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE A SSESSEE COMPANY HAS CLAIMED DIVIDEND OF RS.9,65,247/- AS EXEMPT. ON BEING QUES TIONED BY THE ASSESSING OFFICER, IT WAS EXPLAINED THAT THE ASSESSEE HAS SUO MOTU DISALLOWED AN AMOUNT OF RS.4,82,624/- BEING 50% OF THE EXEMPT DIVIDEND INCO ME AND NO FURTHER DISALLOWANCE IS CALLED FOR. HOWEVER, THE ASSESSIN G OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. RELYING ON THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF THE IT RULES, THE ASSESSING OF FICER MADE A DISALLOWANCE OF RS.6,49,130/-. IN APPEAL, THE LD.CIT(A) RESTRICTED SUCH DISALLOWANCE TO RS.1,66,506/- BEING THE DIFFERENCE BETWEEN THE AMOU NT COMPUTED BY THE ASSESSING OFFICER U/S 14A READ WITH RULE 8D AND THE DISALLOWA NCE SUO MOTU MADE BY THE ASSESSEE. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) WERE DELETED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2009-10 AND 2010-11. HE SUBMITTED THAT THE FACTS OF THE INSTANT CASE BEING SIMILAR TO THAT OF THE EARLIER ASSESSMENT YEARS, NO DISALLOWANCE IS CALLED FOR. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE CIT(A). ITA NO.2289/DEL/2018 3 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND THE ASSESS ING OFFICER MADE DISALLOWANCE OF RS.6,49,130/- U/S 14A READ WITH RULE 8D WHICH HAS B EEN RESTRICTED TO RS.1,66,506/- BY THE CIT(A). I FIND UNDER IDENTICAL CIRCUMSTANCE S, THE TRIBUNAL IN ASSESSEES OWN CASE, VIDE ITA NO.571/DEL/2013, ORDER DATED 25 TH MARCH, 2015 FOR ASSESSMENT YEAR 2009-10, HAS DELETED THE DISALLOWANCE MADE BY THE A SSESSING OFFICER AND SUSTAINED BY THE CIT(A) AT RS.60,09,848/- WHEREIN THE ASSESSE E HAD RECEIVED DIVIDEND INCOME OF RS.9,12,563/- WHICH WAS CLAIMED AS EXEMPT . SIMILARLY, THE TRIBUNAL, IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-11, VI DE ITA NO.1618/DEL/2015, ORDER DATED 20 TH JULY, 2016 HAD DELETED THE DISALLOWANCE OF RS.3,25 ,236/- SUSTAINED BY THE CIT(A) OUT OF THE DISALLOWANCE OF RS.5,47,18 9/- MADE BY THE ASSESSING OFFICER U/S 14A R.W. RULE 8D BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE PRECEDING ASSESSMENT YEAR. SINCE T HE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE T RIBUNAL IN ASSESSEES OWN CASE FOR THE TWO PRECEDING ASSESSMENT YEARS, THEREFORE, IN A BSENCE OF ANY CONTRARY MATERIAL BROUGHT TO MY NOTICE AND CONSIDERING THE FACT THAT THE ASSESSEE HAS SUO MOTU DISALLOWED 50% OF SUCH EXEMPT INCOME, NO FURTHER DI SALLOWANCE IS CALLED FOR. I, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DI RECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE. THE ORDER OF THE CIT(A) IS ACCORDINGLY SET ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO.2289/DEL/2018 4 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 1.08.2019. SD/- (R.K. PANDA) ACCOUNTANT MEMBER DATED: 21 ST AUGUST, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI