CHANDRAN BHAVANI, COIMBATORE V. ITO, NCW-2(1), COIMBATORE

ITA 3382/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3088 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 11-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR
• Keywords: Difference of opinion; Change of opinion; Rule 8D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , ! '!# $ , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ! ./ ITA NO.3382/CHNY/2018 & /ASSESSMENT YEAR: 2012-13 SMT. CHANDRAN BHAVANI NO.9-A, VALLUVAR STREET, SIVANANDA COLONY, COIMBATORE 641 012 VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 2(1), CBE, INCOME TAX OFFICE, 63 RACE COURSE ROAD, COIMBATORE. [PAN: AANPB 9359G] ( ' /APPELLANT) ( ()' /RESPONDENT) ' * + / APPELLANT BY : SHRI G. BASKAR, ADVOCATE ()' * + /RESPONDENT BY : SHRI KANNAN NARAYANAN, JCIT , * -. /DATE OF HEARING : 19.11.2019 /0& * -. / DATE OF PRONOUNCEMENT : 19.11.2019 1 / O R D E R PER SHRI GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -2, COIMBATORE (HEREINAFTER CALLED AS CIT(A)) IN APPEAL NO.116/1 7-18 DATED 28.11.2018 FOR THE ASSESSMENT YEAR 2012-13. ITA NO.3382/CHNY/2018 :- 2 -: 2. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS CHALL ENGED THE REOPENING OF THE ASSESSMENT IN GROUNDS 1.1 AND 1.2. 3. THE LEARNED AUTHORIZED REPRESENTATIVE DREW OUR A TTENTION TO PAGE NOS.12 TO 14 OF THE PAPER BOOK, WHICH WAS THE REPLY TO THE ASSESSING OFFICER IN RESPECT OF THE REASONS RECORDED FOR REOP ENING. IT WAS A SUBMISSION THAT THE ORIGINAL ASSESSMENT WAS COMPLET ED U/S.143(3), ALL THE DETAILS WERE AVAILABLE AND CONSEQUENTLY THE REO PENING WAS UNSUSTAINABLE. 4. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATIV E VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED AUTHORIZED REPRE SENTATIVE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 6. THE ASSESSEE HAS NOT BEEN ABLE TO POINT OUT ANYT HING TO SHOW THAT THE ASSESSING OFFICER HAD ARRIVED AT AN OPINION WHEN CO MPLETING THE ORIGINAL ASSESSMENT U/S.143(3) IN RESPECT OF THE DISALLOWANC E U/S.14A OF THE INCOME TAX ACT, 1961. IN THE ABSENCE OF APPLICATION OF MI ND AND FORMATION OF OPINION IN RESPECT OF THE DISALLOWANCE MADE U/S.14A IN THE ORIGINAL ASSESSMENT ORDER, IT CANNOT BE SAID THAT THERE IS A CHANGE OF OPINION . THIS BEING SO, WE ARE OF THE VIEW THAT THE REOPENING OF THE ASSESSMENT HAS BEEN VALIDLY DONE. CONSEQUENTLY, THE GROUNDS 1.1 AND 1.2 OF THE ASSESS EES APPEAL STANDS DISMISSED. ITA NO.3382/CHNY/2018 :- 3 -: 7. IN RESPECT OF THE GROUNDS 2.1 TO 2.3, IT WAS SUB MITTED THAT THE ISSUE WAS AGAINST THE DISALLOWANCE U/S.14A OF THE ACT. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE DREW OUR ATTENTION TO PAGE NO. 2 OF THE PAPER BOOK, WHICH WAS THE STATEMENT OF TOTAL INCOME. IN THE SAID STATEMENT, THE DIVIDEND EXEMPTED U/S.10(34) OF THE ACT HAS BEEN SHOWN AT RS.1,13,62,330/-. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER DR EW OUR ATTENTION TO PAGE NO.4 OF THE PAPER BOOK WHICH WAS A COPY OF THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31.03.2012. IT WAS A SU BMISSION THAT THE TOTAL EXPENDITURE WAS IN RESPECT OF THE BANK CHARGES OF R S.110/-, TOWARDS CAR MAINTENANCE AMOUNTING TO RS.23,564/- AND DEPRECIATI ON ON THE CAR TO THE EXTENT OF RS.2,18,534/-. IT WAS A SUBMISSION THAT AS NO SPECIFIC EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE, THOUGH THE DISAL LOWANCE IS COMPUTED AS PER THE PROVISO OF RULE 8D, NO DISALLOWANCE CAN BE MADE AS SUCH EXPENDITURE IS NOT AVAILABLE FOR DISALLOWANCE. 10. IN REPLY, THE LEARNED DEPARTMENTAL REPRESENTATI VE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 12. THE PERUSAL OF THE INCOME AND EXPENDITURE STATE MENT SHOWS THAT THE MAXIMUM EXPENDITURE AVAILABLE FOR DISALLOWANCE IS O NLY RS.110/- REPRESENTING ITA NO.3382/CHNY/2018 :- 4 -: BANK CHARGES. THE REST OF THE EXPENDITURE ARE RELA TABLE TO CAR HIRE. THE ASSESSEE HAS NOT INCURRED ANY OTHER EXPENDITURE NOR HAS SHE CLAIMED ANY EXPENDITURE. IN FACT, THE PROVISO TO RULE 8D CLEARL Y PROVIDES THAT THE DISALLOWANCE IS NOT TO EXCEED THE EXPENDITURE CLAIM ED. IN THE PRESENT CASE, NO EXPENDITURE IS AVAILABLE FOR DISALLOWANCE EXCEPT EX PENDITURE TO THE EXTENT OF RS.110/- REPRESENTING BANK CHARGES. THIS BEING SO, NO DISALLOWANCE U/S.14A OF THE ACT IS CALLED FOR IN THE ASSESSEES CASE. C ONSEQUENTLY, THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY T HE LEARNED CIT(A) STANDS DELETED. 13. IN THE RESULT, THE GROUNDS 2.1 TO 2.3 STANDS AL LOWED 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH NOVEMBER, 2019 IN CHENNAI. SD/- SD/- ( '!# $ ) (INTURI RAMA RAO) . /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 2! /DATED: 19 TH NOVEMBER, 2019 . IA, SR. P.S 1 * (-34 54&- /COPY TO: 1. ' /APPELLANT 2. ()' /RESPONDENT 3. , 6- ( )/CIT(A) 4. , 6- /CIT 5. 4 78 (- /DR 6. 89 : /GF