Madras Security Printers (P) Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2584/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3463 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 06-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2584/CHNY/2019 [ [ /ASSESSMENT YEAR: 2016-17 M/S. MADRAS SECURITY PRINTERS PVT. LTD., NO.72, OLD NO.781, T.H. ROAD, CHENNAI 600 081. VS. THE ACIT, CORPORATE CIRCLE 4(1), CHENNAI 34. PAN: AAGCM 0 599K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI G. BASKAR, ADVOCATE /RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 25.11.2019 /DATE OF PRONOUNCEMENT : 28.11.2019 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI IN ITA NO.35/18-19 DATED 25.07.2019 FOR THE ASSESSMENT YEAR 2016-17. 2. M/S. MADRAS SECURITY PRINTERS PVT. LTD., IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORTING SECURITY FORMS, COMPUTER FORMS, POSTAL ENVELOPS, LABELS, PLASTIC AND SMART CARDS. WHILE MAKING ITA NO.2584/CHNY/2019 - 2 - THE ASSESSMENT FOR THE ASSESSMENT YEAR 2016-17, THE ASSESSING OFFICER INVOKED THE JURISDICTION U/S.14A R.W.R. 8D AND MADE DISALLOWANCE OF RS.8,67,057/- UNDER RULE 8D(II) & (III), RESPECTIVELY. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD.CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD.AR PLEADED THAT THE ASSESSEE EARNED AN EXEMPT INCOME OF RS.10,200/- ONLY, ON WHICH THE LD.AO MADE A DISALLOWANCE OF RS.8,67,057/- WHICH HAS BEEN UPHELD BY THE LD.CIT(A). IT WAS PLEADED THAT THE DISALLOWANCE BE RESTRICTED TO THE EXTENT OF DIVIDEND INCOME EARNED BY THE ASSESSEE. PER CONTRA, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND FIND MERIT IN THE ASSESSEES CLAIM THAT THE RESTRICTION OF DISALLOWANCE BE RESTRICTED TO THE EXTENT OF DIVIDEND INCOME AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S. JOINT INVESTMENTS (P.) LTD. VS. CIT (2015) 372 ITR 694 (DELHI). THEREFORE, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF EXEMPT INCOME, IN ACCORDANCE WITH THE ABOVE DECISION. ITA NO.2584/CHNY/2019 - 3 - 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 28 TH NOVEMBER, 2019 IN CHENNAI. SD/- SD/- /CHENNAI, /DATED 28 TH NOVEMBER, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER