DCIT, CHENNAI V. M/s. Sundaram Clayton Ltd., CHENNAI

ITA 2936/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4599 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 12-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 17-10-2016
• Court: TRIBUNAL
• Department Lawyers: SURPIYO PAL
• Keywords: Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.: 2936/MDS/2016 / ASSESSMENT YEARS: 2006-07 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), CHENNAI 34. V. M/S. SUNDARAM CLAYTON LTD., JAYALAKSHMI ESTATES NO.29, HADDOWS ROAD, CHENNAI 600 006 PAN: AAACS4920J ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI SURPIYO PAL, JCIT /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOC ATE / DATE OF HEARING : 12.04.2017 / DATE OF PRONOUNCEMENT : 05.05.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, CHENNAI DA TED 15.07.2016 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE MAIN GRIEVANCE OF REVENUE IN THIS APPEAL IS WITH REGARD TO DISALLOWANCE OF EXPENDITURE FOR EARNING UTI INTERES T INCOME AND DIVIDEND INCOME AT ` 1,74,63,951/- U/S.14A OF THE ACT R.W.RULE 8D OF THE RULES. 2 I.T.A. NO.2936/MDS/2016 3. ON PERUSING THE APPEAL, WE FIND THAT THE AO HAD FILED THE APPEAL WITH DELAY OF 10 DAYS. THE LEARNED AO HAS SUBMITTED A PE TITION DATED 17.10.2016 SEEKING CONDONATION OF DELAY AND THE AO STATED IN THIS PETITION THAT THE DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNA L IS ON ACCOUNT OF MIXING UP OF PAPERS IN HIS OFFICE AND IT TOOK TIME TO LOCATE THE SAME AND AS SOON AS HE TRACED THE RECORDS, HE FILED THE APPEAL ON 17.10.20 16. IN OUR OPINION, THE REASONS EXPLAINED BY THE AO FOR FILING THE APPEAL B ELATEDLY IS BONAFIDE. ACCORDINGLY, THE DELAY IS CONDONED. 4. THE FACTS OF THE ISSUE ARE THAT THE CHENNAI TRI BUNAL VIDE ITA NOS.746 & 747/MDS./2012 IN ASSESSEE'S OWN CASE FOR ASSESSM ENT YEAR 2006-07 & 2007-08 DATED 06.06.2012 HAD REMITTED THE ISSUE REG ARDING DISALLOWANCE U/S.14A BACK TO FILE OF AO FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. THE AO IN ORDER U/S.143(3) R.W.S.254 MADE A DISALLO WANCE U/S.14A OF ` 1,74,63,951/-. THE LD.CIT(A) OBSERVED IN HIS ORDER THAT THE CHENNAI TRIBUNAL HELD IN ASSESSEE'S OWN CASE IN ITA NO.2611/MDS./201 4 FOR ASSESSMENT YEAR 2007-08 DATED 22.01.2015 THAT: SINCE THE JURISDICTIONAL HIGH COURT IN THE CASE OF SIMPSON & CO. LTD. V. DCIT IN TAX CASE NO.2621 OF 2006 DATED 15.1 0.2002 HELD THAT THE DISALLOWANCE BE MADE AT 2% OF EXEMPTED INC OME TOWARDS NOTIONAL EXPENDITURE INCURRED FOR THE PURPO SE OF EARNING 3 I.T.A. NO.2936/MDS/2016 THIS INCOME, WE ARE OF THE VIEW THAT THE DISALLOWAN CE U/S.14A SHOULD BE RESTRICTED TO THE AMOUNT DISALLOWED BY TH E ASSESSEE ON ITS OWN. ACCORDINGLY, WE MODIFY THE ORDER OF THE L D.CIT(A) AND DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO 33,56 ,354/- AS DISALLOWED BY THE ASSESSEE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SINCE LD.CIT(A) RIGHTLY PLACED RELIANCE ON THE JURI SDICTIONAL HIGH COURT IN THE CASE OF SIMPSON & CO. LTD. V. DCIT (SUPRA), WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) AND THE SAME IS CONFIRMED. T HE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 05 TH MAY, 2017 AT CHENNAI . SD/- SD /- ( . ) ( ) (G. PAVAN KUMAR) (CHANDRA POOJARI) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 05 TH MAY, 2017. K S SUNDARAM. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF.