DCIT, Corporate Circle 6(2), CHENNAI V. Siva Industries & Holding Ltd.(formerly known as P.S Realty Pvt Ltd), CHENNAI

ITA 318/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1197 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 23-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITHA
• Assessee Lawyers: T BANUSEKAR
• Keywords: Earning of tax free income; Set aside
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.318/CHNY/2018 ) *) / ASSESSMENT YEAR : 2010-11 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), CHENNAI - 600 034. V. M/S SIVA INDUSTRIES AND HOLDINGS LTD. (FORMERLY KNOWN AS P.S. REALTY PVT. LTD.), STERLING TOWER, NO.32, CATHEDRAL GARDEN ROAD, CHENNAI - 600 042. PAN : AAACS 4460 M (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : MS. R. ANITHA, JCIT ./,- 0 1 / RESPONDENT BY : SH. T. BANUSEKAR, CA 2 0 3% / DATE OF HEARING : 26.08.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 03.09.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENN AI, DATED 30.10.2017 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. MS. R. ANITHA, THE LD. DEPARTMENTAL REPRESENTATI VE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS POWER OF THE 2 I.T.A. NO.318/CHNY/18 CIT(APPEALS) TO SET ASIDE THE ASSESSMENT AND EXAMIN E THE ISSUE AFRESH. REFERRING TO SECTION 251(1)(A) OF THE INCO ME-TAX ACT, 1961 (IN SHORT 'THE ACT'), THE LD. D.R. SUBMITTED THAT T HE PARLIAMENT HAS SPECIFICALLY OMITTED THE POWER TO SET ASIDE THE ASS ESSMENT BY THE CIT(APPEALS). THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT NOT TO HAVE DIRECTED THE ASSESSI NG OFFICER TO VERIFY THE AVAILABILITY OF EXEMPT INCOME EARNED BY THE ASSESSEE. ON A QUERY WHETHER THE AVAILABILITY OF EXEMPT INCOME H AS TO BE TAKEN INTO CONSIDERATION? THE LD. D.R. VERY FAIRLY SUBMI TTED THAT THE AVAILABILITY OF EXEMPT INCOME HAS TO BE BROUGHT ON RECORD FOR DECIDING THE ISSUE IN VIEW OF THE JUDGMENTS OF MADR AS HIGH COURT IN REDINGTON (INDIA) LTD. V. ADDL. CIT (2017) 392 ITR 633 AND CIT V. CHETTINAD LOGISTICS (P.) LTD. (2017) 80 TAXMANN.COM 221. 4. WE HEARD SH. T. BANUSEKAR, THE LD. REPRESENTATIV E FOR THE ASSESSEE ALSO AND PERUSED THE RELEVANT MATERIAL AVA ILABLE ON RECORD. THE MADRAS HIGH COURT IN REDINGTON (INDIA) LTD. (SUPRA) AND CHETTINAD LOGISTICS (P.) LTD. (SUPRA) HELD THAT IN CASE THERE WAS NO EXEMPT INCOME / DIVIDEND INCOME EARNED BY THE AS SESSEE, THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 14A OF THE ACT WITH REGARD TO THE EXPENDITURE. THEREFORE, IT IS OBLIGA TORY ON THE PART OF 3 I.T.A. NO.318/CHNY/18 THE ASSESSING OFFICER TO EXAMINE THE AVAILABILITY O F EXEMPT INCOME AND BRING ON RECORD THE SAME. SINCE SUCH AN EXERCI SE WAS NOT DONE BY THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED. 5. NO DOUBT, THE CIT(APPEALS) HAS COTERMINOUS POWER AS THAT OF THE ASSESSING OFFICER. INSTEAD OF ASKING THE AS SESSING OFFICER TO VERIFY THE AVAILABILITY OF EXEMPT INCOME, HE OUGHT TO HAVE EXAMINED THE SAME WHEN THE PARLIAMENT HAS SPECIFICALLY TAKEN AWAY THE POWER OF THE CIT(APPEALS) TO SET ASIDE THE ASSESSME NT FOR VERIFICATION. HOWEVER, THE FACT REQUIRES THAT THE AVAILABILITY OF EXEMPT INCOME NEEDS TO BE EXAMINED AND BROUGHT ON R ECORD. THEREFORE, IN EXERCISE OF POWER CONFERRED ON THIS T RIBUNAL, THE ISSUE OF DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AND B RING ON RECORD THE AVAILABILITY OF EXEMPT INCOME/DIVIDEND INCOME A ND THEREAFTER DECIDE THE ISSUE IN THE LIGHT OF THE JUDGMENTS OF M ADRAS HIGH COURT IN REDINGTON (INDIA) LTD. (SUPRA) AND CHETTINAD LOG ISTICS (P.) LTD. (SUPRA). 4 I.T.A. NO.318/CHNY/18 6. WITH THE ABOVE OBSERVATION, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 3 RD SEPTEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 3 RD SEPTEMBER, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-15, CHENNAI-34 4. PRINCIPAL CIT- 6, CHENNAI 5. 9< .3 /DR 6. ) = /GF.