Sri Noratanmal Choraria , Bangalore V. The Income Tax Officer Ward-2(2)(5), Bangalore

ITA 3178/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6126 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMESH KUMAR
• Assessee Lawyers: V SRINIVASAN
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO . 3 178 / BANG/201 8 ASSESSMENT YEAR : 20 1 3 - 1 4 SHRI NORATANMAL CHORARIA, NOS. 175 & 176, 3 RD FLOOR, R T STREET, ABOVE RAVIVARMA APARTMENTS, BANGALORE 560 053. PAN: AFFPC4543L VS. THE INCOME TAX OFFICER, WARD 2 [2] [5], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : S HRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI A. RAMESH KUMAR, JCIT (DR) DATE OF HEARING : 1 7 .01.2019 DATE OF PRONOUNCEMENT : 25. 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2, BANGALORE DATED 19.09.2018 FOR ASSESS MENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. [1] THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT O F EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE U/S. 14A OF THE ACT AMOUNTING TO RS. 3,58,787/- UND ER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3. THE LEARNED CIT[A] FAILED TO APPRECIATE THAT THE DISALLOWANCE COMPUTED PURPORTEDLY U/S. 14A OF THE ACT WAS OPPOSE D TO LAW AS THE APPELLANT HAD NOT UTILIZED INTEREST BEARING FUNDS F OR MAKING THE INVESTMENTS THAT YIELD TAX FREE INCOME UNDER THE FA CTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 4. WITHOUT PREJUDICE TO THE ABOVE, THE DISALLOWANCE MADE IS HIGHLY EXCESSIVE, OPPOSED TO LAW AND FACTS OF THE APPELLAN T'S CASE AND THEREFORE, THE SAME DESERVES TO BE DELETED. 5. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234-B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND THE LEVY DESERVES TO BE CANCELLED. 6. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF NEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND ITA NO. 3178/BANG/2018 PAGE 2 OF 2 OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. THE LD. AR OF ASSESSEE MADE VARIOUS ARGUMENTS. AT THIS JUNCTURE, THIS WAS THE OBSERVATION BY THE BENCH THAT WHETHER THERE IS MIXED FUNDS OR NOT AND IF THERE ARE MIXED FUNDS THEN FOR PROPORTIONATE DISALL OWANCE OF INTEREST EXPENDITURE, RULE 8D HAS TO BE FOLLOWED. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THIS IS TRUE THAT THERE ARE MIX ED FUNDS BUT THE AO HAS NOT FOLLOWED RULE 8D ALSO BECAUSE AS PER RULE 8D, T HE AMOUNT OF AVERAGE INVESTMENT IN SHARES AND AVERAGE TOTAL ASSETS HAS T O BE CONSIDERED WHEREAS THE AO HAS CONSIDERED INVESTMENT IN SHARES AS ON 31.03.2013 AND TOTAL VALUE OF ASSET AS PER BALANCE SHEET AS ON 31. 03.2013 AND IN THIS REGARD, HE DRAWN MY ATTENTION TO PAGE NO. 3 OF THE ASSESSMENT ORDER. HE SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO T HE FILE OF AO FOR FRESH DECISION AS PER RULE 8D. THE LD. DR OF REVENUE SUP PORTED THE ORDERS OF AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIE W OF THE DISCUSSION ABOVE, AS PER WHICH, IT IS SEEN THAT THE AO HAS NOT COMPUTED THE AMOUNT OF DISALLOWANCE U/S 14A AS PER RULE 8D. HENCE, I SET A SIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR F RESH DECISION AS PER RULE 8D AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HE ARD TO ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 25 TH JANUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.