M/s Cargo Motors Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 4439/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3559 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 07-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Section: 14A

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G, DELHI .. , , , ! BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.4439/DEL/2015 ASSESSMENT YEAR: 2012-13 CARGO MOTORS PVT. LTD. 1/9-B, JINDAL HOUSE, ASAF ALI ROAD, DELHI-110002 / VS. DCIT, CIRCLE-5(2), C.R. BUILDING, NEW DELHI-110002 ( %& /ASSESSEE) ( / REVENUE) PAN. NO. AAACC2744C + / DATE OF HEARING : 08 /11 /2017 + / DATE OF ORDER: 08 / 11 /2017 / REVENUE BY SHRI KAUSHLENDRA TIWARI DR %& / ASSESSEE BY SHRI ASHOK KHANDELWAL ITA NO. 4439/DEL./2015 CARGO MOTORS PVT LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER 30/04/2015 OF THE LD. FIRST APPELLATE AUTHORITY, NE W DELHI FOR ASSESSMENT YEAR 2012-13, CONFIRMING THE DISALLO WANCE OF RS.2,70,946/- U/S 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AS EXPENSES FOR EARNING DIVID END. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI ASHOK KHANDELWAL, CONTENDED THAT THE ASSESSEE DID NOT MADE ANY SUO-MOTO DISALLOWANCE AS THE DIVIDEND CAME THROUGH TCS AND NO ACTIVITY OF PURCHASE OR SALE WAS DONE BY THE ASSESSEE AND THE DIVIDEND INCOME WAS DIRECTLY C REDITED TO THE BANK ACCOUNT OF THE ASSESSEE. IT WAS ALSO PLEAD ED THAT IN EARLIER AY.2004-05, THE TRIBUNAL, IDENTICALLY, DECI DED IN FAVOUR OF THE ASSESSEE AND THEREAFTER IN ALL THE YE AR THE DISALLOWANCE, IF ANY, MADE BY THE AO WAS DELETED BY THE LD. CIT(A) BY FOLLOWING THE ORDER OF THE TRIBUNAL AGAIN ST WHICH NO APPEAL WAS FILED BY THE REVENUE. PLEA WAS RAISED TH AT CONSISTENCY HAS TO BE MAINTAINED. RELIANCE WAS PLAC ED UPON THE DECISION IN SOOD HARVESTER (2007) 164 TAXMAN 55 , HONBLE JURISDICTIONAL HIGH COURT IN CIT VS LAGAN K ALA UPVAN 259 ITR 489 AND DIT VS LOVELY BAL SHIKSHA PARISHAD (2004) ITA NO. 4439/DEL./2015 CARGO MOTORS PVT LTD. 3 266 ITR 349. THIS ASSERTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. HOWEV ER, THE LD. DR, SHRI KAUSHLENDRA TIWARI, CONTENDED THAT SOM E EXPENSES IN THE FORM OF ADMINISTRATION MIGHT HAVE B EEN INCURRED, THEREFORE, THE AO WAS WITHIN A JURISDICTI ON TO MAKE DISALLOWANCE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , AND THE BRIEF, ARE THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS.12,74,175/- AND DID NOT INCUR ANY EXPENDITURE FO R SUCH EARNING. EVEN THE LD. AO IN PARA-3 OF THE ASSESSME NT ORDER HAS ACCEPTED THE POSITION THAT THERE WERE NO EXPENS ES WHICH WERE DIRECTLY ATTRIBUTABLE TO THE EARNING OF SUCH D IVIDEND INCOME. EVEN OTHERWISE, NO INTEREST EXPENSES WERE I NCURRED BY THE ASSESSEE FOR THE DIVIDEND INCOME. THE LD. AO ON HYPOTHETICAL BASIS WORKED OUT THE DISALLOWANCE OF RS.2,70,946/, BEING 0.5% OF THE AVERAGE INVESTMENT IN SHARES BOTH DIVIDEND AND NON-DIVIDEND BEARING. SIMI LARLY, IDENTICAL DISALLOWANCE WAS DELETED BY THE LD. CIT(A ), WHICH WAS AFFIRMED BY THE TRIBUNAL FOR AY 2011-12. THE DE LHI BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE F OR AY ITA NO. 4439/DEL./2015 CARGO MOTORS PVT LTD. 4 2004-05 (ITA NO.2900/DEL/2008) ORDER DATED 18/05/20 09 DISMISSED THE APPEAL OF THE REVENUE. IDENTICALLY, T HE FOR AY 2007-08, THE LD. CIT(A) IN APPEAL NO.93/09-10 ORDER DATED 31/12/2010 DELETED THE DISALLOWANCE OF RS.2,97,596/ - MADE U/S 14A OF THE ACT. IDENTICAL IS THE SITUATION FOR AY 2008-09 ORDER DATED 05/07/2011 BY THE LD. CIT(A), WHERE THE DISALLOWANCE OF RS.3,01,667/- AND FOR AY 2009-10, T HE DISALLOWANCE OF RS.3,13,489/-, MADE U/S 14A OF THE ACT WAS DELETED. CONSIDERING THE TOTALITY OF FACTS, WE FIN D MERIT IN THE ASSERTION OF THE LD. COUNSEL FOR THE ASSESSEE. 2.2. IF THIS ISSUE IS ANALYZED WITH RESPECT TO PRI NCIPLE OF CONSISTENCY, IT IS ALSO NOTED THAT IN EARLIER ASSES SMENT YEARS, AS DISCUSSED ABOVE, THE DISALLOWANCE MADE BY THE AO WAS EITHER DELETED BY THE LD. FIRST APPELLATE AUTHORITY OR BY THE TRIBUNAL AS IS EVIDENT FROM THE ORDERS OF THE EARLI ER ASSESSMENT YEARS. IN VIEW OF THESE UNDISPUTED FACT S, THE LD. ASSESSING OFFICER IS EXPECTED TO FOLLOW THE PRINCIP LE OF CONSISTENCY UNLESS AND UNTIL CONTRARY MATERIAL/FACT S ARE BROUGHT ON RECORD. ON THE ISSUE OF CONSISTENCY, WE ARE SUPPORTED BY FOLLOWING DECISIONS:- ITA NO. 4439/DEL./2015 CARGO MOTORS PVT LTD. 5 I. PARSHURAM POTTERY WORKS LTD. VS ITO 106 ITR 1 (SC) II. SECURITY PRINTERS 264 ITR 276(DEL.) III. CIT VS NEO POLYPACK PVT. LTD. 245 ITR 492 (DEL.) IV. CWT VS ALLIED FINANCE PVT. LTD. 289 ITR 318 (DEL.) V. BERGER PAINTS INDIA LTD. VS CIT 266 ITR 99 (SC) VI. DCIT VS UNITED VANASPATI (275 ITR 124) (AT)(CHANDIGARH ITAT) VII. UNION OF INDIA VS KUMUDINI N. DALAL 249 ITR 219 (SC) VIII. UNION OF INDIA VS SATISH PANNALAL SHAH 249 ITR 221 IX. B.F.VARGHESE VS STATE OF KERALA 72 ITR 726 (KER.) X. CIT VS NARENDRA DOSHI 254 ITR 606 (SC) XI. CIT VS SHIVSAGAR ESTATE 257 ITR 59 (SC) XII. PRADIP RAMANLAL SETH VS UOI 204 ITR 866 (GUJ.) XIII. RADHASWAMY SATSANG VS CIT 193 ITR 321 (SC) XIV. AGGARWAL WAREHOUSING & LEASING LTD. 257 ITR 235 (MP) THE SUM AND SUBSTANCE OF THE AFORESAID JUDICIAL PRONOUNCEMENTS IS THAT ON THE BASIS OF PRINCIPLE OF JUDICIAL DISCIPLINE, CONSISTENCY HAS TO BE FOLLOWED AND ONCE IN A PARTICULAR YEAR, IF ANY VIEW IS TAKEN, IN THE ABSEN CE OF ANY CONTRARY MATERIAL, NO CONTRARY VIEW IS TO BE TAKEN AS FINALITY TO THE LITIGATION IS ALSO A PRINCIPLE WHICH HAS TO BE FOLLOWED. BEFORE US, NO CONTRARY FACTS OR ANY ADVERSE MATERIA L WAS BROUGHT ON RECORD BY THE REVENUE, THEREFORE, WE FIN D NO ITA NO. 4439/DEL./2015 CARGO MOTORS PVT LTD. 6 INFIRMITY IN THE FINDING/CONCLUSION OF THE LD. FIRS T APPELLATE AUTHORITY. WE AFFIRM HIS VIEW BEING UNCONTROVERTED ON FACTS. RESULTANTLY THE APPEAL OF THE ASSESSEE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF THE LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 08/11/2017. SD/- SD/- (N. K. SAINI) (JOGINDER SINGH) ' / ACCOUNTANT MEMBER # ' /JUDICIAL MEMBER DELHI; DATED : 08/11/2017 F{X~{T? P.S/. .. $#&' (' / COPY OF THE ORDER FORWARDED TO : 1. / / THE APPELLANT 2. 01/ / THE RESPONDENT. 3. 3 ( ) / THE CIT, NEW DELHI. 4. 3 / CIT(A)- , DELHI 5. 5 0 , , / DR, ITAT, DELHI 6. % / GUARD FILE. / BY ORDER, 15 0 //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, DELHI