M/s. Mew Electricals Ltd., Baroda V. The ACIT, Circle-2(1)(2), Baroda

ITA 2835/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0546 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Opportunity of being heard; Rule 8D; Set aside
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI O. P. MEENA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 2835/AHD/2017 (ASSESSMENT YEAR : 2014-15) MEW ELECTRICALS LTD., 305/A, WINDSOR PLAZA, R.C. DUTT ROAD, ALKAPURI, BARODA 390 007. VS. CIT(A)-2, BARODA. [PAN NO. AABCM 4242 L] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SULABH PADSHAH, A.R. RESPONDENT BY : SHRI L. P. JAIN, SR. D.R. DATE OF HEARING 16.09.2019 DATE OF PRONOUNCEMENT 16.09.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 18.09.2017 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 2, VADODARA UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED AS TO THE ACT) ARISING OUT OF THE ORDER DATED 23.09.2016 PASSED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2), B ARODA FOR ASSESSMENT YEAR 2014-15. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THIS THAT THE LEARNED CIT(A) HAS CONFIRMED THE ACTION OF LEARNED AO IN INVOKING THE PROVISIONS OF SECTION 14A READ WITH SECTION 8D AND CONFIRMED THE PART ADDITIO N OUT OF TOTAL ADDITION MADE ITA NO.2835/AHD/2017 MEU ELECTRICALS LTD. VS CIT ASST.YEAR 2014-15 - 2 - RS.11,44,850/- BY WAY OF GIVING DIRECTION THAT THE INVESTMENT OF RS.22,87,423/- HAS BEEN EXCLUDED IN CALCULATING THE AVERAGE INVESTMENT. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT NO INTEREST BEARING FUND WERE USED FOR THE PURPOSE OF MAKING INVESTMENT, THE PROVISION OF SECTION 14A READ WITH SECTION 8D OUGHT NOT TO HAVE BEEN APPLIED BY THE AUTHORITIES BELOW. IT IS RELEVANT TO MENTION THAT THE NECESSARY EVIDEN CES IN SUPPORT OF THE CLAIM OF THE ASSESSEE WERE FURNISHED IN DETAILS BEFORE US. I T WAS FURTHER SUBMITTED BY THE LEARNED AR THAT IDENTICAL ISSUE WAS SET ASIDE TO TH E FILE OF THE LEARNED CIT(A) BY THE CO-ORDINATE BENCH IN ITA NO.2151/AHD/2017 FO R A.Y. 2013-14, THE COPY WHEREOF HAS ALSO BEEN FURNISHED BEFORE US. HE, THEREFORE, PRAYS FOR SIMILAR RELIEF BEFORE US. THE LEARNED DR HAS NOT BE EN ABLE TO MAKE ANY CONTRARY SUBMISSION TO THAT OF THE CONTENTIONS MADE BY THE LEARNED AR. 4. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD INCLUDING THE ORDER PASSED BY THE HONBLE CO -ORDINATE BENCH IN ITA NO.2151/AHD/2017 FOR A.Y. 2013-14 THE RELEVANT PORT ION WHEREOF IS AS FOLLOWS: 4. WE HAVE HEARD THE REPRESENTATIVE OF THE RESPEC TIVE PARTIES, WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RE CORD. THE ORDER PASSED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN APPEAL FOR A.Y. 2012-13 HAS ALSO BEEN CAREFULLY CONSIDERED BY US WHEREBY AND WHEREUN DER THE LEARNED CIT(A) WAS DIRECTED TO DENOVO ADJUDICATION OF THE MATTER; THE RELEVANT PORTION OF THE SAID JUDGMENT IS REPRODUCED HEREIN BELOW: 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. WE FIND THAT IDENTICAL ISSUE CAME UP BEFORE THE CO-ORDINATE BENCH IN ASSESSMENT YEAR 2011-12 IN ASSESSEE OWN CASE WHERE IN THE SIMILAR CIRCUMSTANCES. THE ISSUE WAS SET ASIDE TO THE FILE OF THE LD. CIT(A) FOR DE NOVA ADJUDICATION. 6. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CO-ORDINATE BENCH RELEVANT TO ASSESSMENT YEAR 2011-12 IS REPROD UCED HEREUNDER:- ITA NO.2835/AHD/2017 MEU ELECTRICALS LTD. VS CIT ASST.YEAR 2014-15 - 3 - WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATER IAL ON RECORD. WE OBSERVED THAT ID. CIT(A) HAS SUSTAINED T HE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 14A R.W. RULE 8D IN RESPECT OF EXPENDITURE INCURRED FOR EARNING E XEMPT INCOME BY REFERRING TO THE DECISION OF LD. C1T(A) O N THE IDENTICAL ISSUE IN THE CASE OF ASSESSEE FOR ASSESSM ENT YEAR 2008-09. WE HAVE CONSIDERED THE SUBMISSION OF THE I D. COUNSEL THAT BECAUSE OF SMALLNESS OF THE AMOUNT OF DISALLOW ANCE INVOLVED THE ASSESSEE HAS NOT CONTESTED THE DECISIO N OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2008-09. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES WE OBSERVE THAT IN THE INTE REST OF JUSTICE, IT WILL BE APPROPRIATE TO RESTORE THIS CAS E TO THE FILE OF LD. CIT(A) TO DECIDE IT ON MERIT WITHOUT REFERRING TO THE DECISION OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2008-09. ACCORDINGLY, THE ISSUE IS SET ASIDE TO THE ID. CIT( A) TO DECIDE AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITIES TO TH E ASSESSEE. - 3 - ITA NO.2151/A/17 M/S. MEW ELECTRICAL LTD. VS. DCIT ASST.YEAR 2013-14. 7. IN CONSONANCE WITH THE VIEW TAKEN IN ASSESSMENT YEAR 2011-12 THE CAPTAINED ISSUE IN ASSESSMENT YEAR 2012-13 IS A LSO SET ASIDE TO THE FILE OF THE LD. CIT(A) WITH IDENTICAL DIRECTIONS AP PLICABLE TO ASSESSMENT YEAR 2011-12. ACCORDINGLY, THE ISSUE IS SET ASIDE AND RESTORED TO THE FILE OF THE LD. CIT(A) FOR ADJUDICA TION AFRESH AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE TO THE REGARD. TAKING INTO CONSIDERATION OF THE ORDER PASSED BY TH E CO-ORDINATE BENCH ON THE IDENTICAL ISSUE WE SET ASIDE THE ISSUE TO THE FILE OF THE LEARNED CIT(A) WITH THE DIRECTION UPON HIM TO ADJUDICATE TH E MATTER AFRESH UPON TAKING INTO CONSIDERATION THE EVIDENCE ALREADY PLAC ED BEFORE IT AND ALSO THE EVIDENCES WHICH THE ASSESSEE MAY CHOOSE TO FILE AT THE TIME OF HEARING OF THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. SINCE THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY THE CO-ORDINATE BENCH WHEREBY AND WHEREUNDER THE LEARNED CIT(A) HAS BEEN DIRECTED TO ADJUDICATE THE MATTER AFRESH UPON TAKING INTO CONSI DERATION THE EVIDENCE ALREADY PLACED BEFORE IT, WE FIND NO REASON TO DEVI ATE FROM SUCH OBSERVATION AND DIRECTION PASSED BY THE CO-ORDINATE BENCH. HENC E, RESPECTFULLY, FOLLOWING THE SAME, WE FIND IT FIT AND PROPER TO SET ASIDE TH E ISSUE TO THE FILE OF THE ITA NO.2835/AHD/2017 MEU ELECTRICALS LTD. VS CIT ASST.YEAR 2014-15 - 4 - LEARNED CIT(A) WITH THE FURTHER DIRECTION UPON HIM TO GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TO DECIDE THE ISSUE AFRESH UPON TAKING INTO CONSIDERATION THE EVIDENCE ON RECORD BEFORE HIM AND ALSO THE EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE AT THE TIME OF HEAR ING OF APPEAL BEFORE HIM. 5. IN THE RESULT, THE ASSESSEE APPEAL IS THUS ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 16/09/2019 SD/- SD /- ( O. P. MEENA) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 16/09/2019 PRITIYADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-2, VADODARA. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 16.09.2019 (DICTATION PAGES 3) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.09.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER