Kesoram Industries Ltd., Kolkata V. D.C.I.T.,Circle-5(1), Kolkata

ITA 370/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9931 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 27-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D (VIRTUAL COURT HEARING), BENCH KOLKATA BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI S. S. GODARA, JM ./I.T.A NO.1196&370/KOL/2019 ( [ [ / ASSESSMENT YEARS: 2012-13&2013-14) KESORAM INDUSTRIES LIMITED 5/1, CLIVE ROW, 4 TH FLOOR, ROOM NO.125, KOL-1. VS. DCIT, CIRCLE-5(1), KOLKATA ./ ./PAN/GIR NO.: AABCK2417P (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI AKKAL DUDHEWALA, CA RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 16/06/2020 /DATE OF PRONOUNCEMENT : 19/06/2020 / O R D E R PER SHRI S. S. GODARA: THESE ASSESSEES TWO APPEALS FOR ASSESSMENT YEAR 2012-13 & 2013-14 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (A) 7, KOLKATA & COMMISSIONER OF INCOME TAX (A) - 22, KOLKATA SEPARATE ORDERS DATED 29.03.2019 & 31.12.2018 PASSED IN CASE NO.1007/CIT(A)-7/CIRCLE-5(1)/KOL/15-16 & NO.53/CIT(A)-22/13- 14/18-19/KOL INVOLVING PROCEEDINGS U/S 143(3) AND144C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. IT TRANSPIRES AT THE OUTSET DURING THE COURSE OF HEARING THAT THE ASSESSEES SOLE IDENTICAL GRIEVANCE IN BOTH THESE APPEALS CHALLENGES CORRECTNESS OF THE LOWER AUTHORITIES ACTION INVOKING SECTION 14A R.W.R 8D(2)(III) ADMINISTRATIVE EXPENDITURE DISALLOWANCE OF RS.33,04,500/- AND RS.33,18,000/- RELATING TO ITS EXEMPT INCOME OF RS.6,09,11,055/- AND RS.5,61,76,040/- ASSESSMENT YEAR WISE; RESPECTIVELY. SUFFICE TO SAY, THE ASSESSING OFFICER WENT BY 0.5% OF THE AVERAGE VALUE OF INVESTMENTS IN THE CORRESPONDING ASSESSMENTS FRAMED ON 20.03.2015 & I.T.A NO.1196&370/KOL/2019 KESORAM INDUSTRIES LIMITED PAGE | 2 23.12.2016 WHEREAS THE CIT(A) HOLDS THAT ONLY THE INVESTMENTS YIELDING EXEMPT INCOME IN ISSUE HAVE TO BE CONSIDERED FOR THE PURPOSE OF CALCULATING THE IMPUGNED ADMINISTRATIVE EXPENDITURE. 3. LEARNED COUNSELS ONLY CASE DURING THE COURSE OF HEARING IS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN MAKING THE IMPUGNED DISALLOWANCE SINCE THE DIVIDEND INCOME HAD BEEN DIRECTLY CREDITED TO THE ASSESSEES BANK ACCOUNT BY WAY OF ECS WITHOUT INCURRING ANY BANK CHARGES OR COLLECTION AS EXPENSES. AND ALSO THAT THERE WAS NO CHANGE IN INVESTMENT PORTFOLIO NOR THE ASSESSEE KEPT TRACK SCRIP PRICES MOVEMENT. WE FIND NO MERIT IN EITHER OF THESE ARGUMENTS. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE INSTANT SOLE ISSUE IS ACTUALLY AGAINST THE ASSESSEE AND IN REVENUES FAVOUR AS PER TRIBUNALS ORDERS IN ASSESSMENT YEAR 2008-09 TO 2009-10 INVOLVING ITA NO.1037/KOL/2012 AND ITA NO.773/KOL/2013 FOLLOWING REI AGRO LTD. VS. DCIT (2013) 144 ITD 141 (KOL-TRIB) AS UPHELD BY HONBLE JURISDICTIONAL HIGH COURT IN GA NO.3581 OF 2018 HOLDING THAT ONLY EXEMPT INCOME YIELDING INVESTMENTS HAVE TO BE TAKEN INTO CONSIDERATION FOR PURPOSE OF COMPUTING ADMINISTRATIVE EXPENDITURE DISALLOWANCE. NO REBUTTAL TO THIS CLINCHING LEGAL POSITION HAS COME FROM THE ASSESSEES SIDE. WE THUS CONFIRM THE CIT(A)S ACTION ISSUING NECESSARY DIRECTIONS TO THE ASSESSING OFFICER TO THIS EFFECT. THE ASSESSEE FAILS IN ITS SOLE SUBSTANTIVE GROUND IN BOTH THESE ASSESSMENT YEARS. 4. THIS TWO ASSESSEES APPEALS ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.06.2020. SD/- ( J. SUDHAKAR REDDY ) SD/- (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER /KOLKATA; / DATE:19/06/2020 RS I.T.A NO.1196&370/KOL/2019 KESORAM INDUSTRIES LIMITED PAGE | 3 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE APPELLANT- KESORAM INDUSTRIES LIMITED 2. THE RESPONDENT- DCIT, CIRCLE-5(1), KOLKATA 3. ( ) / THE CIT(A), KOLKATA [SENT THROUGH EMAIL] 4. / CIT 5. , , / DR, ITAT, KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.