Asia Match Company Private Limited, Sivakasi V. ACIT Corporate Circle 1, Madurai

ITA 2849/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4018 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C CHIRANJEEVI RAJ
• Section: 14A; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! .#$#%, ' !( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2849/CHNY/2018 % *% / ASSESSMENT YEAR : 2013-14 M/S ASIA MATCH COMPANY PVT. LTD., 17A, BOOBATHY BUILDINGS, VIRUDHUNAGAR ROAD, SIVAKASI. PAN : AACCA 2744 G V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE I, MADURAI. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI C. CHIRANJEEVI RAJ, FCA ./,- 0 1 / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 2 0 3' / DATE OF HEARING : 28.01.2019 45* 0 3' / DATE OF PRONOUNCEMENT : 06.02.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, MADURA I, DATED 02.08.2018 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2 I.T.A. NO.2849/CHNY/18 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI C. CHIRANJEEVI RAJ, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS EARNED DI VIDEND INCOME OF 1,20,000/- DURING THE YEAR UNDER CONSIDERATION WHIC H IS EXEMPTED FROM TAXATION. ACCORDING TO THE LD. REPRE SENTATIVE, THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE EITHER DI RECTLY OR INDIRECTLY TO EARN THE EXEMPTED INCOME. ACCORDING TO THE LD. REPRESENTATIVE, ALL THE INVESTMENTS WERE MADE OUT O F OWN FUND. THE INVESTMENTS WERE MADE IN THE EARLIER ASSESSMENT YEA R AND NO NEW INVESTMENTS WERE MADE DURING THE YEAR UNDER CONSIDE RATION. ACCORDING TO THE LD. REPRESENTATIVE, THE INTEREST P AID BY THE ASSESSEE IS ON THE LOAN BORROWED FOR BUSINESS ACTIV ITIES AND NOT RELATED TO ANY ACQUISITION OF SHARES FOR EARNING TH E DIVIDEND INCOME. REFERRING TO THE ORDER OF THIS TRIBUNAL IN BRAKES I NDIA LTD. V. DCIT (2016) 46 ITR (TRIB) 212, THE LD. REPRESENTATIVE SU BMITTED THAT THE ASSESSING OFFICER CAN MAKE DISALLOWANCE IN THE COUR SE OF COMPUTING THE TAXABLE INCOME OF THE ASSESSEE IN THE NORMAL COURSE. HOWEVER, WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE 3 I.T.A. NO.2849/CHNY/18 ACT, IT CANNOT BE ADDED BACK. IN THIS CASE, ACCORD ING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER ADDED BACK TH E DISALLOWANCE TO THE BOOK PROFIT WHILE MAKING COMPUTATION UNDER S ECTION 115JB OF THE ACT. 4. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. THE QUESTION ARISES FOR CONSI DERATION IS WHETHER THERE CAN BE ANY ADDITION TO THE BOOK PROFI T WHILE COMPUTING TAXABLE INCOME UNDER SECTION 115 JB OF TH E ACT? THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN BRAKES INDIA LTD. (SUPRA) FOUND THAT EVEN THOUGH THERE CAN BE DISALLOWANCE WHILE CO MPUTING TAXABLE INCOME IN THE NORMAL COURSE, WHILE COMPUTIN G BOOK PROFIT UNDER SECTION 115JB OF THE ACT, THERE CANNOT BE ANY ADDITION. IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF BRAKES INDIA LTD. (SUPRA), THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO EXCLUDE THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 4 I.T.A. NO.2849/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 6 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- ( !.#$#% ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 6 TH FEBRUARY, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-1, MADURAI 4. PRINCIPAL CIT-1, MADURAI 5. 9< .3 /DR 6. =% > /GF.