M/S. GAURANG METAL LTD., Indore V. THE DCIT 1(1), Indore

ITA 255/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5844 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N AGRAWAL
• Section: 14A

Judgement Text

GORANG METAL LTD,. ITA 255/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNA L SMC BENCH, INDORE BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER ITA NO. 255/IND/2015 A.Y.2005-06 M/S GORANG METAL LTD. INDORE PAN AACPM 0248E ::: APPELLANT VS DY. COMMR. OF INCOME TAX 1(1) INDORE ::: RESPONDENT APPELLANT BY SHRI S.N. AGRAWAL RESPONDENT BY SHRI RAJIV JAIN DATE OF HEARING 12.7.2016 DATE OF PRONOUNCEMENT 13.7.2016 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 20.11.2014 OF THE LEARNED CIT(A)-I, INDOR E. 2. THE SOLE GRIEVANCE OF THE IS THAT THE LEARNED CIT(A ) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.75,550/- O UT OF GORANG METAL LTD,. ITA 255/IND/2015 2 LEGAL AND PROFESSIONAL CHARGES AND RS. 3,00,717/- OUT O F INTEREST EXPENSES U/S 14A OF THE ACT. 3. WE HAVE HEARD BOTH THE SIDES. IN THE INSTANT CASE, T HE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS EARNED INCOME FROM DIVIDEND OF RS.1500/-. HE OBSERVED THAT THE ASSESSEE HAS MADE PAYMENT OF PROFESSIONAL CHARGES OFRS.1,48,710/- AND ALSO INCURRED INTEREST EXPENDITUR E OF RS.3,00,717/- FOR INVESTMENT IN SHARES. THEREFORE, B Y INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT, THE ASSESSING OFFICER DISALLOWED LEGAL AND PROFESSIONAL CHAR GES OF RS.1,48,110/- AND INTEREST EXPENSES OF RS.3,00,71 7/-. 4. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE FOR LEGAL CHARGES OF RS.74,717/- AND DISALLOWANCE OF INTEREST EXPENSES OF RS. 3,00,717/-. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS.1500/- DURI NG THE YEAR AGAINST WHICH THE DISALLOWANCE OF RS.3,75,267/- GORANG METAL LTD,. ITA 255/IND/2015 3 HAS BEEN MADE U/S 14A OF THE ACT WHICH IS NOT JUSTIFI ED. HE SUBMITTED THAT THE DISALLOWANCE CAN BE RESTRICTED TO T HE EXTENT OF DIVIDEND INCOME EARNED BY THE ASSESSEE AND FOR THIS PROPOSITION HE RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENT PVT . LTD. VS. CIT (2015) 59 TAXMAN.CO.295 DEL. HE ALSO RELIED UPON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN T HE CASE OF M/S AMAR PACKAGING PVT. LTD.; ITA NO. 2358/DEL/2015 ORDER DATED 29.3.2016 WHEREIN IT WAS HELD THAT DISALLOWANCE U/S 14A CANNOT EXCEED THE INCOME CLAIMED B Y THE ASSESSEE AS EXEMPT. THE LEARNED DR COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL FO R THE ASSESSEE BY CITING ANY CONTRARY DECISION. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE DELHI BE NCH OF THE TRIBUNAL IN THE CASE OF M/S AMAR PACKAGING PVT. LTD.(SUPRA), WE RESTRICT THE DISALLOWANCE OF EXPENDITU RE U/S 14A OF THE ACT TO RS.1500/- AND VACATE BALANCE GORANG METAL LTD,. ITA 255/IND/2015 4 DISALLOWANCE OF RS.3,73,767/-. THUS, THIS GROUND IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN OPEN COURT ON 13 TH JULY, 2016 SD/- (N.S. SAINI) ACCOUNTANT MEMBER 13 TH JULY, 2016 DN/-