Asstt. Commissioner of Income Tax, Ludhiana V. Sh.Shiv Parshad Aggarwal, Ludhiana

ITA 336/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9803 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 336/CHD/2016 ASSESSMENT YEAR: 2012-13 THE ACIT, VS SHRI SHIV PARSHAD AGGARWAL, CIRCLE 4, C/O M/S SALIGRAM SHIV PARSHAD LUDHIANA. G.T.ROAD, MILLER GANJ, LUDHIANA. PAN: ABKPA7653E & C.O. NO. 9/CHD/2016 IN ITA NO. 336/CHD/2016 ASSESSMENT YEAR: 2012-13 SHRI SHIV PARSHAD AGGARWAL, VS THE ACIT, C/O M/S SALIGRAM SHIV PARSHAD CIRCLE 4, G.T.ROAD, MILLER GANJ, LUDHIANA. LUDHIANA. PAN: ABKPA7653E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MITTAL RESPONDENT BY : SHRI SUBHASH AGGARWAL DATE OF HEARING : 19.07.2016 DATE OF PRONOUNCEMENT : 20.07.2016 O R D E R PER BHAVNESH SAINI, JM THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDE R OF 2 LD. CIT(APPEALS)-2, LUDHIANA DATED 27.01.2016 FOR ASSESSMENT YEAR 2012-13. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS T HE CROSS OBJECTION, THE SAME IS THEREFORE, DISMISSED A S NOT PRESSED. 4. THE REVENUE IN THE DEPARTMENTAL APPEAL CHALLENGE D THE DELETION OF ADDITION OF RS. 62,08,816/- UNDER SECTION 14A OF THE INCOME TAX ACT. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS A CONSIGNMENT AGENCY TISCO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED THA T THE ASSESSEE HAD SHOWN INVESTMENTS IN THE BALANCE SHEET, INCOME FROM WHICH DO NOT FORM PART OF THE TO TAL INCOME. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD INCURRED INTEREST EXPENDITURE OF RS. 98,52,232/- DU RING THE YEAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN WHY THE EXPENDITURE INCURRED IN RELATION TO THE EARNING OF EXEMPT INCOME MAY NOT BE DISALLOWED UNDE R SECTION 14A READ WITH RULE 8D. THE ASSESSEE SUBMIT TED THAT INVESTMENTS WERE MADE FROM INTERNAL CASH ACCRU ALS. THE ASSESSING OFFICER CONSIDERED ASSESSEE'S SUBMISS ION AND ALSO REFERRED TO PROVISIONS OF SECTION 14A OF T HE ACT AS ALSO THE MEMORANDUM EXPLAINING THE PROVISIONS ON 3 THIS ISSUE. THE ASSESSING OFFICER REFERRED TO JUDI CIAL PRONOUNCEMENTS ON THE ISSUE AND HELD THAT IN ASSESSEE'S CASE, THE EXPENDITURE INCURRED IN RELATI ON TO EARNING OF EXEMPT INCOME WAS TO BE DISALLOWED UNDER SECTION 14A OF THE INCOME TAX ACT AND ACCORDINGLY M ADE THE ABOVE ADDITION. 6. THE ASSESSEE'S WRITTEN SUBMISSION IS QUOTED IN T HE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAI NED THAT ASSESSEE EARNED DIVIDEND INCOME OF RS. 3,85,18 3/- ON THE INVESTMENT OF RS. 15.01 CR WHICH WAS MADE IN THE SHARES AND MUTUAL FUNDS OUT OF INTERNAL CASH ACCRUALS. OUT OF THIS, INVESTMENT OF RS. 14.84 CR IS OLD ONE AND INVESTMENT DURING THE YEAR IS ONLY A SUM OF RS. 17,20,200/- WHICH IS OUT OF INCOME OF THE YEAR WHIC H, AS PER THE PROFIT & LOSS ACCOUNT, IS A SUM OF RS. 5.99 CRORES AND ASSESSEE HAS FURTHER AVAILABILITY OF THE INCOME. THEREFORE, NO INTEREST COULD BE DISALLOWED . THE ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPORT O F THE CONTENTION. 7. THE LD. CIT(APPEALS) FOUND THAT IDENTICAL ISSUE WAS CONSIDERED BY HIM IN ASSESSMENT YEAR 2009-10 IN WHI CH SIMILAR DISALLOWANCE WAS MADE BUT THE ITAT CHANDIGA RH BENCH VIDE ORDER DATED 27.03.2014 IN ITA 927/2012 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE L D. CIT(APPEALS) REPRODUCED THE ORDER OF THE TRIBUNAL A ND FOLLOWING THE SAME, DELETED THE ADDITION. 4 8. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THE DEPARTMENTAL APPEAL. IT IS ADMITT ED FACT THAT THE IDENTICAL ISSUE WAS DECIDED BY THE TR IBUNAL IN THE CASE OF THE SAME ASSESSEE FOR PRECEDING ASSESSMENT YEAR 2009-10 AND SIMILAR DISALLOWANCE HA S BEEN DELETED. THE ISSUE IS, THEREFORE, COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE TRIBUNAL IN ASSESSM ENT YEAR 2009-10. NO INFIRMITY HAVE BEEN POINTED OUT I N THE ORDER OF THE LD. CIT(APPEALS). WE, THEREFORE, DISM ISS THE DEPARTMENTAL APPEAL. 9. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH JULY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD