Appeal details
Counselvise Citation
[2018] 124 COUNSELVISE.COM (IT) 7288 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-10-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2010-2011
Appeal Filed On
28-11-2017
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./I.T.A. NOS.2886 & 2887/CHNY/2017 / ASSESSMENT YEARS : 2010-11 & 2014-15. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(1) CHENNAI-34. VS. M/S. RAMANIYAM REAL ESTATES P. LTD, NO.17/35, II MAIN ROAD, GANDHI NAGAR, ADYAR, CHENNAI 600 020. [PAN AAACR 2276A] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. SANATH KUMAR RAHA, JCIT $%! ' # /RESPONDENT BY : SHRI. N. ARJUNRAJ, C.A. & ' ' () /DATE OF HEARING : 27-09-2018 *+ ' () /DATE OF PRONOUNCEMENT : 01-10-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: THESE ARE APPEALS FILED BY THE REVENUE FOR THE IM PUGNED ASSESSMENT YEARS DIRECTED AGAINST ORDERS DATED 30.0 8.2017 OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, CHENNAI. ITA NOS.2886 & 2887/2017 :- 2 -: 2. APPEAL OF THE REVENUE FOR THE ASSESSMENT YE AR 2010-2011 IS TAKEN UP FIRST FOR DISPOSAL. 3. GRIEVANCE OF THE REVENUE IS THAT LD. COMMISS IONER OF INCOME TAX (APPEALS) ALLOWED A CLAIM OF DEDUCTION OF B52 ,24,783/- MADE BY THE ASSESSEE U/S.80IB(10) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT), WHICH WAS DENIED BY THE LD. ASSESSING OFFIC ER. 4. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT A SSESSEE ENGAGED IN THE BUSINESS OF DEVELOPING HOUSING PROJECTS HAD CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT. HOWEVER, ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE, ASSESSEE WAS NOT ELIGIBLE FOR SUCH DEDUCTION SINCE IT WAS ONLY A WORKS CONTRACTOR. AS PER THE LD. DEPARTM ENTAL REPRESENTATIVE, CONSTRUCTION AGREEMENTS ENTERED BY THE ASSESSEE CLEARLY INDICATED THAT ASSESSEE DID NOT UNDERTAKE A NY INVESTMENT RISK. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE, A SSESSEE WAS ONLY CONSTRUCTING RESIDENTIAL HOUSES FOR BUYERS WHO HAD ENTERED AGREEMENT WITH IT. THUS, AS PER THE LD. DEPARTMENTAL REPRESEN TATIVE, ASSESSEE COULD NOT BE CONSIDERED AS AN UNDERTAKING EXECUTING HOUSING PROJECTS. 5. PER CONTRA, LD. AUTHORISED REPRESENTATIVE ST RONGLY SUPPORTING THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) SUBMITTED THAT SIMILAR ISSUE HAD COME UP BEFORE THIS TRIBUNA L IN ASSESSEES OWN ITA NOS.2886 & 2887/2017 :- 3 -: CASE FOR ASSESSMENT YEAR 2009-2010. AS PER THE LD. AUTHORISED REPRESENTATIVE, THIS TRIBUNAL VIDE ITS ORDER DATED 30.08.2013 IN ITA NO.1593/MDS/2012 HAD HELD THE ASSESSEE TO BE ELIG IBLE FOR SUCH DEDUCTION. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AN D PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE QUESTION WHET HER ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT HAD COME UP BEFORE THIS TRIBUNAL IN APPEALS FOR ASSESSMENT YEARS 2008-2009 AS WELL AS FOR ASSESSMENT YEAR 2009-2010. WHAT WAS HELD BY THIS T RIBUNAL AT PARAS 2 & 3 OF THE ORDER DATED 30.08.2013 IN ITA NO.1593/ MDS/2012 IS REPRODUCED HEREUNDER:- 2.WHEN THE APPEAL WAS TAKEN UP, LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ISSUE REGARDING ELIGIBI LITY FOR DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT STOOD DECIDED IN FAVOUR OF THE ASSESSEE IN ITA NOS.1246 &1247/MDS/2011, DATED 15 TH MAY, 2013. VIS--VIS THE SECOND ISSUE, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT APPORTIONMENT OF INTEREST WAS NOT DECIDED BY THE COMMISSIONER OF INCOME TAX (APPEALS), THOUGH RAISED BY THE ASSESSEE. LD. D.R. FAIRLY ADMITTED THAT AVERMENTS OF THE ASSESSEES COUNSEL WERE CORRECT. 3. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTENTIONS. IN SO FAR AS THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80-IB(100 OF THE ACT IS CONCERNED, THE ISSUE HAD COME UP BEFORE THIS TRIBUNAL ON REVENUES APPEAL IN ITA NOS.1246 & 1247/MDWS/2011. LD. COMMISSIONER OF INCOME TAX ITA NOS.2886 & 2887/2017 :- 4 -: (APPEALS) HAD HELD THIS ISSUE IN FAVOUR OF THE ASSESSEE RELYING ON HIS OWN ORDER ON ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09. REVENUES APPEAL AGAINST SUCH ORDER OF THE LD. COMMISSIONER O F INCOME TAX (APPEALS) STOOD DISMISSED BY THIS TRIBUNAL ON THIS PARTICULAR ISSUE VIDE ITS ORDER DA TED 15/05/2013 IN ITA NOS.1246 & 1247/MDS/2011 . THE FACT SITUATION BEING SAME, WE ARE OF THE OPINIO N THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL. WE THEREFORE DO NOT F IND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 7. NOW, WE TAKE UP APPEAL OF THE REVENUE F OR ASSESSMENT YEAR 2014-2015. 8. SOLE GRIEVANCE RAISED BY THE REVENUE I S THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DI SALLOWANCE MADE BY THE LD. ASSESSING OFFICER U/S.14A OF THE ACT, R. W.RULE 8D OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) 9. LD. COUNSEL FOR THE REVENUE SUBMITTED T HAT THOUGH ASSESSEE WAS NOT HAVING ANY EXEMPT INCOME, SECTION 14A R.W.R.8D HAD TO BE APPLIED CONSIDERING CBDT CIRCULAR NO.5/20 14, DATED 11.02.2014. ITA NOS.2886 & 2887/2017 :- 5 -: 10. PER CONTRA, LD. AUTHORISED REPRESENTAT IVE STRONGLY SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS). RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF REDINGTON INDIA LTD VS. ADDL. CIT (2016) 97 CCH 0219. 11. WE HAVE CONSIDERED THE RIVAL CONTENTION S AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE QUESTION WHETH ER A DISALLOWANCE U/S. 14A OF THE ACT COULD BE MADE WHEN THERE WAS NO EXEMPT INCOME CLAIMED BY AN ASSESSEE STANDS ANSWERED BY THE JUD GMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF REDINGTON INDIA LTD VS. ADDL. CIT (SUPRA). WHAT WAS HELD BY THE JURISDICTIONAL HIGH COURT AT P ARA 15 IS REPRODUCED HEREUNDER:- 15. THE EXEMPTION EXTENDED TO DIVIDEND INCOME WOULD RELATE ONLY TO THE PREVIOUS YEAR WHEN THE INCOME WAS EARNED AND NONE OTHER AND CONSEQUENTLY THE EXPENDITURE INCURRED IN CONNECTION THEREWITH SHOULD ALSO BE DEALT WITH IN THE SAME PREVIOUS YEAR. THUS, BY APPLICATION OF THE MATCHIN G CONCEPT, IN A YEAR WHERE THERE IS NO EXEMPT INCOME THERE CANNOT BE A DISALLOWANCE OF EXPENDITURE IN RELATION TO SUCH ASSUMED INCOME. (MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD VS. CIT (225 ITR 802)) . THE LANGUAGE OF SEC. 14A(10 SHOULD BE READ IN THAT CONTEXT AND SUCH THAT IT ADVANCES THE SCHEME F THE ACT RATHER THAN DISTORT IT. ITA NOS.2886 & 2887/2017 :- 6 -: IN THE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 12. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 1ST DAY OF OCTOBER, 2018, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) / JUDICIAL MEMBER ( . '#'$ ) (ABRAHAM P. GEORGE) % &' / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED: 1 ST OCTOBER, 2018. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF
