M/s Mayur Knits Pvt. Ltd, New Delhi V. ITO, New Delhi

ITA 32/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7993 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 14-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPLICATION REJECTED
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-32/DEL/ 2016 (ASSESSMENT YEAR-2012-13) MAYUR KNITS PVT.LTD., 40-41, COMMUNITY CENTRE, NEW FRIENDS COLONY, NEW DELHI. PAN-AAACM0262B (APPELLANT) VS ITO, WARD-6(3), NEW DELHI (RESPONDENT) A SSESSEE BY SH. SATYAJEET GOEL, CA R EVENUE BY APPLICATION REJECTED ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 29.10.2015 OF CIT(A)-19, NEW DELHI PERTAINING TO 2012 13 ASSESSMENT YEAR. 2. AN ADJOURNMENT HAS BEEN MOVED ON BEHALF OF THE R EVENUE STATING THAT THE LD. SR. DR IS ON LEAVE. ON GOING THROUGH THE SAME, IT I S SEEN THAT APART FROM CARRYING SOME INDECIPHERABLE INITIAL IT NEITHER NAMES THE PE RSON WHO HAS MOVED IT NOR DOES IT REFLECT THE DESIGNATION OF THE PERSON PETITIONING F OR TIME. NO ONE WAS PRESENT IN SUPPORT OF THE PETITION MOVED. THE MOVING OF THE P ETITION IN SUCH A CASUAL WAY IS NOT APPROPRIATE. CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE APPEAL OF THE ASSES SEE EX-PARTE QUA THE REVENUE RESPONDENT ON MERIT AFTER REJECTING THE PETITION OF THE REVENUE. THE LD.AR INVITING ATTENTION TO THE ORDER OF THE CO-ORDINATE BENCH DAT ED 19.06.2015 IN ITA NO. 684/DEL/2014 PERTAINING TO 2009-10 AY IN THE CASE O F REGENT AUTOMOBILES PVT. LTD. DATE OF HEARING 14.03.2016 DATE OF PRONOUNCEMENT 06.05.2016 I.T.A .NO.-32/DEL/2016 PAGE 2 OF 3 VS. DCIT SUBMITTED THAT THE POINT AT ISSUE IS FULLY COVERED IN ASSESSEES FAVOUR BY THE SAID ORDER. RELYING ON THE SAID DECISION IT WAS SU BMITTED THAT THE ITAT HAD RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVES TMENTS PRIVATE LTD VS. CIT (2015) 372 ITR 694 (DEL.) WHICH IS RELIED UPON IN THE PRESENT PROCEEDINGS ALSO. INVITING ATTENTION TO THE FACTS O N RECORD AS FOUND ADDRESSED IN PAGE 1 PARA 3 OF THE ASSESSMENT ORDER WHICH ARE REITERAT ED IN PARA 3 OF THE ORDER UNDER CHALLENGE IT WAS HIS SUBMISSION THAT THE ASSESSEE H AD EARNED DIVIDEND INCOME OF RS.5,300/-, THE SAID INCOME WAS NOT CLAIMED AS AN E XEMPT INCOME WHILE COMPUTING THE TAXABLE INCOME. THE ASSESSEE WAS PUT TO NOTICE TO EXPLAIN WHY PROVISIONS OF SECTION 14A READ WITH RULE 8D SHOULD NOT BE INVOKED . IN RESPONSE THERETO, IT WAS SUBMITTED THE ASSESSEE COMPANY OFFERED RS.31,367/- AS DISALLOWANCE. THE SAID SUBMISSION WAS NOT ACCEPTED BY ASSESSING OFFICER WH O PROCEEDED TO MAKE AN ADDITION OF RS.7,00,923/-BY WAY OF A DISALLOWANCE. IN APPEAL THE ASSESSEE RELIED UPON VARIOUS DECISIONS INCLUDING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HOLCIM INDIA PRIVATE LIMITED [2014] 90 CCH 081 DEL-HC AND CIT VS HERO CYCLES 323 ITR 518 (P & H) AMONGST OTHERS . NOT CONVINCED WITH THE EXPLANATION THE ADDITION WAS UPHELD. IN THE SAID BACKGROUND THE LD. AR INVI TING ATTENTION TO THE ORDER OF THE CO-ORDINATE BENCH AND THE DECISION OF THE JURISDICT IONAL HIGH COURT IN THE CASE OF JOINT INVESTMENTS PRIVATE LTD (CITED SUPRA) SUBMITT ED THAT THE DISALLOWANCE UNDER SECTION 14A CANNOT EXCEED THE EXEMPT INCOME. IN THE ABSENCE OF ANY REPRESENTATION ON THE PART OF THE REVENUE AND FINDING THE FACTS AV AILABLE ON RECORD SUPPORTING THE CLAIM OF THE ASSESSEE, THE ASSESSEES APPEAL IS ALL OWED. THE ASSESSING OFFICER IS DIRECTED TO LIMIT THE DISALLOWANCE TO RS.5,300/- I. E. THE EX-EXEMPT INCOME. I.T.A .NO.-32/DEL/2016 PAGE 3 OF 3 3. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 06 O F MAY, 2016. SD/- (DIVA SINGH) JUD ICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT A SSISTANT REGISTRAR ITAT NEW DELHI