Sh. Parshotam Aggarwal Prop., Moga V. Assistant commissioner of Income Tax, Moga

ITA 29/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5745 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-02-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 10-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S NEGI
• Assessee Lawyers: GAURAV KANSAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO.29/ASR/2017 ASSESSMENT YEAR : 2012-13 SHRI PARSHOTAM AGGARWAL, PROP. M/S AGGARWAL SALES CORPORATION, IMPROVEMENT TRUST MARKET, G.T.ROAD, MOGA. PAN: AAPPA4424K VS. ACIT, CIRCLE MOGA, MOGA. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI GAURAV KANSAL, ADVOCATE DEPARTMENT BY : SHRI S.S. NEGI DATE OF HEARING : 21.02.2018 DATE OF PRONOUNCEMENT : 22.02.2018 ITA NO.29/ASR/2017 2 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 24.11.2016 UPHOLDING THE DI SALLOWANCE OF RS.4,94,028/- MADE BY THE ASSESSING OFFICER U/S 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2012-13. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF RUBBER. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT AN INVEST MENT OF RS.71,03,000/- WAS MADE FOR PURCHASE OF SHARES OF M /S JAI BAJRANG RUBBER PVT. LTD.. IN THE ABSENCE OF THE ASSESSEE O FFERING ANY DISALLOWANCE U/S 14A, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF RULE 8D AND CALCULATED DISALLOWANCE AT RS.4,94,028/-. THE LD. CIT(A) UPHELD THE DISALLOWA NCE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . ITA NO.29/ASR/2017 3 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELEVAN T MATERIAL ON RECORD, IT IS OBSERVED FROM PARA 4.2 OF THE ASSE SSMENT ORDER THAT NO EXEMPT INCOME WAS EARNED BY THE ASSESSEE DURING THE YEAR. THE SAME FINDING HAS BEEN RETURNED BY THE LD. CIT(A ) ON PAGE 13 OF HIS ORDER. 4. THUS, ADMITTEDLY, NO EXEMPT INCOME WAS EARNED BY THE ASSESSEE DURING THE YEAR. THE HONBLE JURISDICTIONA L HIGH COURT IN CIT VS. WINSOME TEXTILE INDUSTRIES LTD. (2009) 319 ITR 204 (P&H) HAS HELD THAT NO DISALLOWANCE CAN BE MADE U/S 14A IN THE ABSENCE OF ANY EXEMPT INCOME EARNED DURING THE YEAR . SIMILAR VIEW HAS BEEN REITERATED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS. CIT (2015) 378 ITR 33 (DEL) AND CIT VS. HOLCIM INDIA P. LTD. (2014) 90CCH 081-DEL-HC HOLDING THAT IF THERE IS NO EXEMPT INCOME, THERE CAN BE NO QUEST ION OF MAKING ANY DISALLOWANCE U/S 14A. IN VIEW OF THESE PRECEDE NTS, WHICH ARE SQUARELY APPLICABLE TO THE FACTS OF THE INSTANT CAS E, WE HOLD THAT NO ITA NO.29/ASR/2017 4 DISALLOWANCE IS CALLED FOR AS THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME DURING THE YEAR. THE DISALLOWANCE SO MADE AN D CONFIRMED U/S 14A READ WITH RULE 8D IS THEREFORE, DIRECTED TO BE DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.02.201 8. SD/- SD/- [N.K. CHOUDHRY] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 22 ND FEBRUARY, 2018. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, AMRITSAR.