DCIT, Faridabad V. M/s. Lakhani Rubber Udyog P. Ltd., Faridabad

ITA 4314/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4963 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES D, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4314/DEL/2016 : ASSTT. YEAR : 2012-13 DCIT CIRCLE-1, BLOCK-B, NEW CGO COMPLEX, FARIDABAD. VS LAKHANI RUBBER UDYOG P. LTD. PLOT NO. 131, SECTOR-24, FARIDABAD. (APPELLANT) (RESPONDENT) PAN NO. AAACL3111E REVENUE BY : SH. DEEPAK GARG, SR. DR ASSESSEE BY : NONE DATE OF HEAR ING: 16 . 10 .201 9 DATE OF PRONOUNCEMENT: 07 .1 1 .201 9 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER DATED 24.05.2016 PASSED BY THE LD. CIT(AP PEALS), FARIDABAD RELATING TO AY 2012-13 ON THE FOLLOWING G ROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS. 2,48,16,539/- MADE ON ACCOUNT O F DISALLOWANCE OF INTEREST ON INVESTMENT U/S 14A OF T HE INCOME TAX ACT READ WITH RULE 8D(2)(II) OF THE INCO ME TAX RULES, 1962. ITA NO. 4314/DEL/2016 LAKHANI RUBBER UDYOG P. LD . 2 2. SCHEDULE 10 OF THE BALANCE SHEET OF THE ASSESSEE REFLECT ED THE FOLLOWING INVESTMENTS: DESCRIPTION AMOUNT IN RS. AS ON 01.04.2011 AMOUNT IN RS. AS ON 31.03.2012 INVESTMENT IN EQUITY SHARES OF M/S LAKHANI FOOTCARE PVT. LTD. 4,77,571 4,77,571 INVESTMENT IN EQUITY SHARES OF M/S LAKHANI DETERGENTS & SOAPS P. LTD. 3,58,179 3,58,179 INVESTMENT IN EQUITY SHARES OF M/S LAKHANI INDIA LTD. 2,38,785 2,38,785 INVESTMENT SUBSCRIPTION IN M/S LAKHANI VARDAAN AUTO PVT. LTD. 2,05,15,733 2,05,15,733 INVESTMENT SUBSCRIPTION IN M/S LAKHANI HITECH RUBBER PVT. LTD. 3,99,22,508 3,99,22,508 INVESTMENT SUBSCRIPTION IN M/S LAKHANI AUTO COMPONENTS PVT. LTD. 4,51,18,929 4,51,18,929 INVESTMENT SUBSCRIPTION IN M/S LAKHANI MEDICARE PVT. LTD. 5,05,06,299 5,05,06,299 INVESTMENT SUBSCRIPTION IN M/S LAKHANI PLATINUM LIFESTYLE PVT. LTD. 19,16,236 19,16,236 INVESTMENT SUBSCRIPTION IN M/S LAKHANI FASHION (INDIA) PVT. LTD. 7,04,29,938 7,04,29,938 TOTAL 22,94,84,178 22,94,84,178 ITA NO. 4314/DEL/2016 LAKHANI RUBBER UDYOG P. LD . 3 3. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS MADE CAPITAL INVESTMENTS WITH A VIEW TO EARNED DIVIDENDS. THE ASSESSIN G OFFICER FURTHER HELD THAT THE ASSESSEE HAS NOT ALLOCATED ANY COMP ONENT OF EXPENDITURE IN RELATION TO THE INVESTMENTS MADE TO BE DISALLOWED U/S 14A OF THE I.T. ACT. 4. BEFORE US DURING ARGUMENTS, IT IS BROUGHT TO OUR NO TICE THAT THE ASSESSEE HAS NOT EARNED ANY DIVIDEND INCOME DURING THE YE AR WHICH HAS BEEN CLAIMED AS EXEMPT. LD. DR HAS NOT CONTROVERTED TH IS FACT. HENCE, RELYING ON THE JUDGMENT OF HONBLE DELHI HIGH COURT I N THE CASE CHEMINVEST LTD. VS CIT IN ITA NO. 749/2014 DATED 02.0 9.2015, WHEREIN IT WAS HELD THAT NO DISALLOWANCE IS REQUIRED TO BE MADE, WHEREIN THE ASSESSEE HAS NOT CLAIMED ANY EXEMPT INCOME, WE HEREBY DIR ECT THAT NO DISALLOWANCE U/S 14A IS REQUIRED TO BE MADE BY THE ASSESSI NG OFFICER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 07/11/2019. SD/- SD/- (BHAVNESH SAINI) (DR. B . R. R. KUMAR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 07/11/2019 *KAVITA ARORA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 4314/DEL/2016 LAKHANI RUBBER UDYOG P. LD . 4