M/s. Tamil Nadu Transport Development Finance Corproation Ltd., CHENNAI V. ACIT, CHENNAI

ITA 3253/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7579 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 29-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.3253/CHNY/2018 ! ' / ASSESSMENT YEAR : 2013-2014. M/S. TAMILNADU TRANSPORT DEVELOPMENT FINANCE CORPORATION LTD, NO.2, 4 TH FLOOR, TOURISM COMPLEX, WALLAJAH ROAD, TRIPLICANE, CHENNAI 600 002. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE III(1) CHENNAI 600 034. [PAN AAACT 0747L] ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. K. SANTHANAKRISHNAN, C.A &' # $ % /RESPONDENT BY : SHRI. R. CLEMENT RAMESH KUMAR, ADDL. CIT. ( ) $ * /DATE OF HEARING : 22-07-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 23-07-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 1, CHENNAI (CIT(A) FOR SHORT) DATED 24.09.2018 FOR THE ASS ESSMENT YEAR (AY) 2013-2014. ITA NO.3253/2018. :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE HONORABLE CIT(A) ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE. 2. THE HONORABLE CIT(A) FAILED TO CONSIDER THAT THE APPELLANT DID NOT MAKE ANY CLAIM FOR EXEMPTION. 3. THE HONORABLE CIT(A) FAILED TO CONSIDER THE ENTI RE INVESTMENT PORTFOLIO OF THE APPELLANT AS ON 30-03-2 013 AMOUNTING TO RS. 52,37,3 1,000 AND ON THE FIRST DAY OF THE YEAR ON 0 1-04-2012 AMOUNTING TO RS.49,37,31,000/- WERE CONSISTING OF ONLY TAXABLE INCOME(INTEREST INCOME) GENERATING INVESTMENTS. THE APPELLANT COMPANY RECEI VED ONLY INTEREST AND NET DIVIDEND. 4. THE HONORABLE CIT(A) FAILED TO NOTE THAT THE DEC ISIONS OF SUPREME COURT IN THE CASES OF M/S GODREJ AND BOYCE MANUFACTURING CO. LTD, (CA.7020/2011) & MAXOPP INVESTMENT LIMITED DOES NOT APPLY TO THE APPELLANT AS THERE WAS NO POSSIBILITY OF RECEIVING DIVIDEND INCOME AND INCOME ON INVESTMENTS WERE ONLY INTEREST INCOME SUBJECT TO TAX . 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY M/S. TAMILNADU TRANSPORT DEVEL OPMENT FINANCE CORPORATION LTD IS A GOVERNMENT OF TAMIL NA DU UNDERTAKING IS FORMED FOR THE PURPOSE OF FINANCING GOVERNMENT TRANSPORT CORPORATIONS. THE RETURN OF INCOME FOR THE AY 2013- 14 WAS FILED ON 23.09.2017 DISCLOSING TOTAL INCOME OF RS. 6,79,83,5 01/- . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. CIT, CORPORATE CIRCLE-3(1), CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 22.06.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN ITA NO.3253/2018. :- 3 -: SHORT THE ACT) AFTER DISALLOWING A SUM OF RS. 27 ,69,280/- INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. 4. BEING AGGRIEVED BY THE ABOVE ASSESSMENT ORDER, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNE D ORDER CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. IT IS SUBMITTED BEFORE US THAT ASS ESSEE HAD NOT EARNED EXEMPT INCOME DURING THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THEREFORE R ESORT TO THE PROVISIONS OF SECTION 14A OF THE ACT CANNOT BE MAD E. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRES ENTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT GRO UNDS OF APPEAL RELATES TO DISALLOWANCE U/S.14A OF THE ACT. THE LA W IS SETTLED TO THE EXTENT THAT IN THE ABSENCE OF ANY EXEMPT INCOME EAR NED DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CO NSIDERATION, RESORT TO THE PROVISIONS OF SECTION 14A OF THE ACT CANNOT BE MADE. RELIANCE IN THIS REGARD CAN BE MADE ON THE DECISION OF JURI SDICTIONAL HIGH COURT IN THE CASE OF REDINGTON (INDIA) LTD. VS. ACIT (201 7) 77 TAXMANN.COM 257. FURTHER, FACTUM OF NOT HAVING EARNED EXEMP T INCOME DOES NOT EMANATES FROM THE ORDERS OF THE LOWER AUTHORITIES AND THEREFORE THE ITA NO.3253/2018. :- 4 -: MATTER REQUIRES REMISSION TO THE FILE OF THE ASSESS ING OFFICER FOR LIMITED PURPOSE OF VERIFYING THE FACT THAT WHETHER THE ASSESSEE EARNED ANY EXEMPT INCOME OR NOT. IN THE CIRCUMSTANCES, WE REMAND THIS ISSUE BACK TO THE FILE OF THE AO FOR LIMITED PURPO SE FOR EXAMINING THE ISSUE ON THE ABOVE LINES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 23RD DAY OF JULY, 2019, AT CHE NNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED: 23RD JULY, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF