Shriram Wealth Advisors Ltd., CHENNAI V. DCIT, CHENNAI

ITA 407/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9550 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R SIVARAMAN
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.407/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 M/S SHRIRAM WEALTH ADVISORS LTD., MOOKAMBIKA COMPLEX, NO.4, LADY DESIKA ROAD, MYLAPORE, CHENNAI 600 004. PAN : AAMCS 0723 P V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1), CHENNAI 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. R. SIVARAMAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 0 . 1$ / DATE OF HEARING : 13.04.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 05.05.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) 15, CHENNAI, DATED 24.09.2015 AND PERTAINS TO ASSESSMEN T YEAR 2012- 13. 2 I.T.A. NO.407/MDS/16 2. SHRI R. SIVARAMAN, THE LD. COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS WITH REGARD TO DISALLOWANCE OF ` 35,852/- MADE UNDER SECTION 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY DIVIDEND INCOME DURIN G THE ASSESSMENT YEAR UNDER CONSIDERATION AND THERE WAS N O FRESH INVESTMENT ALSO. EVEN THOUGH THE JUDGEMENT OF DELH I HIGH COURT IN CHEM INVESTMENTS LIMITED V. CIT (234 TAXMANN 761) A ND THE JUDGEMENT OF GUJARAT HIGH COURT IN CIT V. CORRTECT ENERGY PVT. LTD. (45 TAXMANN.COM 116) WERE BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW, THE ASSESSING OFFICER DISALLOWED THE CLAIM O F THE ASSESSEE BY APPLYING THIRD LIMB OF RULE 8D(2) OF THE INCOME- TAX RULES, 1962. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, WHEN THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE, THERE IS NO QUEST ION OF ANY DISALLOWANCE. 3. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER BY APPLYING THIRD LIMB OF RULE 8D(2) DISALLOWED THE AMOUNT EQUAL TO 0.5% OF AVERAGE VALUE OF INVESTMENT, INCOME FROM WH ICH DOES NOT 3 I.T.A. NO.407/MDS/16 OR SHALL NOT FORM PART OF TOTAL INCOME, AS APPEARIN G IN THE BALANCE SHEET OF THE ASSESSEE ON THE FIRST DAY AND LAST DAY OF THE PREVIOUS YEAR. THIS COMPUTATION MADE BY THE ASSESSING OFFIC ER WAS NOT FOUND INCORRECT BY THE ASSESSEE, THEREFORE, IT IS N OT CORRECT TO SAY THAT THERE WAS NO INVESTMENT DURING THE YEAR UNDER CONSIDERATION. ACCORDING TO THE LD. D.R., RULE 8D IS MANDATORY FOR THE YEAR UNDER CONSIDERATION. THEREFORE, THE CIT(APPEALS) HAS RIG HTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS A SPECIFIC CASE OF THE ASSESSEE BEFORE THIS TRIBUNAL THAT THER E WAS NO INVESTMENT DURING THE YEAR UNDER CONSIDERATION AND THERE WAS NO DIVIDEND INCOME EARNED BY THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT NO EXPENDITURE WAS INCURRED TO EARN T HE DIVIDEND INCOME. THE ASSESSING OFFICER, HOWEVER, COMPUTED T HE AVERAGE INVESTMENT AND AN AMOUNT EQUAL TO 0.5% OF THE SAME, THE INCOME FROM WHICH DOES NOT FORM PART OF TOTAL INCOME, AND DISALLOWED. THEREFORE, WE HAVE TO VERIFY WHETHER ANY INVESTMENT WAS MADE DURING THE YEAR UNDER CONSIDERATION, WHICH REFLECTE D IN THE BALANCE SHEET ON THE FIRST DAY AND LAST DAY OF THE PREVIOUS YEAR. IT ALSO 4 I.T.A. NO.407/MDS/16 NEEDS TO BE EXAMINED WHETHER ANY INCOME WAS EARNED BY THE ASSESSEE ON THE INVESTMENT MADE. SINCE NO MATERIAL WAS AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE MATTER NEEDS TO BE RE-EXAMINED. ACCORDINGLY, THE ORDERS O F THE LOWER AUTHORITIES ARE SET ASIDE. THE ISSUE OF DISALLOWAN CE UNDER SECTION 14A OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE SHALL BRING ON RECORD THE ACTUAL INVES TMENT MADE BY IT, WHICH IS APPEARING IN THE BALANCE SHEET ON THE FIRST DAY AND LAST DAY OF THE PREVIOUS YEAR AND THE INCOME EARNED WHIC H DOES NOT FORM PART OF TOTAL INCOME. THEREAFTER, THE ASSESSI NG OFFICER SHALL COMPUTE THE DISALLOWANCE BY APPLYING PROVISIONS OF RULE 8D(2), AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE . 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO CRED IT FOR TDS FOR ` 33,536/-. 6. SHRI R. SIVARAMAN, THE LD. COUNSEL FOR THE ASSES SEE, SUBMITTED THAT TAX WAS DEDUCTED TO THE EXTENT OF ` 33,536/-. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN CREDIT FOR THE TDS AMOUNT. THEREFORE, THE CIT(APPEALS) DIRECTED THE A SSESSING OFFICER TO RECONCILE THE TDS CERTIFICATE AND FORM NO.26AS A ND THEREAFTER TO GIVE DUE CREDIT AS PER THE PROVISIONS OF LAW. 5 I.T.A. NO.407/MDS/16 7. WE HAVE HEARD SHRI P. RADHAKRISHNAN, THE LD. DEP ARTMENTAL REPRESENTATIVE ALSO. THE LD. DEPARTMENTAL REPRESEN TATIVE HAS VERY FAIRLY SUBMITTED THAT THE ASSESSING OFFICER MA Y BE ASKED TO VERIFY THE TDS CREDIT AND RECONCILE THE TDS CERTIFI CATE AND FORM NO.26AS AND THEREAFTER DECIDE THE ISSUE IN ACCORDAN CE WITH LAW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. TAX DEDUCTED AT SOURCE NEEDS TO BE GIVEN CREDIT AS PER THE PROVISIO NS OF LAW IN RESPECT OF THE INCOME WHICH WAS OFFERED FOR TAXATIO N. THEREFORE, IT IS FOR THE ASSESSEE TO RECONCILE THE CREDIT BEFORE THE ASSESSING OFFICER. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY D IRECTED THE ASSESSING OFFICER TO VERIFY THE TDS CERTIFICATE AND FORM NO.26AS AND GIVE DUE CREDIT TO THE AMOUNT REFLECTED THEREIN AFTER EXAMINATION. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. 6 I.T.A. NO.407/MDS/16 ORDER PRONOUNCED ON 5 TH MAY, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 5 TH MAY, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-15, CHENNAI 4. 0 81 /CIT-6, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.