M/s. Interglobal Steels Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4587/DEL/2012

• Counselvise Citation: 458720114 RSA 2012
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH SENIOR
• Assessee Lawyers: P D MITTAL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) SHRI I.C. SUDHIR, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMEBR ITA NO.4587/DEL./2012 (ASSESSMENT YEAR : 2007-08) INTERGLOBAL STEELS PVT. LTD., VS. DCIT, CIRCLE 11 (1), 35, LINK ROAD, 2 ND FLOOR, NEW DELHI. LAJPAT NAGAR III, NEW DELHI 110 024. (PAN : AAACS0304A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.D. MITTAL, CA REVENUE BY : SHRI SATPAL SINGH, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE CIT (APPEALS)-XV, NEW DELHI DATED 02.07.2012. THE GROU NDS TAKEN BY THE ASSESSEE IN THE APPEAL READ AS UNDER :- 1. THAT THE LEARNED ASSESSING OFFICER AS WELL AS L EARNED CIT (APPEAL) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE COMPANY IS PRIMARILY A TRADING COMPANY AND INVESTME NTS HAS BEEN MADE OUT OF THE ADDITIONAL CAPITAL AVAILABLE W ITH THE ITA NO.4587/DEL/2012 2 ASSESSEE COMPANY. FURTHER, THEY HAVE ALSO FAILED TO APPRECIATE THAT ALL THE EXPENSES RELATE TO THE TRADING ACTIVIT IES AND THERE IS NO AMOUNT OF EXPENDITURE DIRECTLY RELATED TO THE IN VESTMENT MADE I DIVIDEND INCOME EARNED. 2. THAT THE LEARNED ASSESSING OFFICER IS WRONG WHIL E APPLYING THE PROVISION OF SECTION 14A READ WITH RULE 8D INSPITE OF THE FACT THAT THE PERIOD UNDER REFERENCE FALL PRIOR TO THE A MENDMENT / INSERTION OF THE SAID PROVISIONS. THE ABOVE VIEW HA S BEEN UPHELD IN THE FOLLOWING CASE LAW. CIT VS HERO CYCLE 323 ITR 518 (P&H) ACIT VS EICHER LIMITED 101 TTJ 369 (DEL) MARUTI UDYOGS VS DCIT 92 ITD 119 (DEL) 3. THAT THE LEARNED CIT (APPEAL) THOUGH ACCEPTED TH E ABOVE PROPOSITION BUT FOLLOWED THE SAME PRINCIPLES FOR WO RKING OUT THE DISALLOWANCE VIS 14A. THE ACT OF THE LEARNED CI T (APPEAL) IS THUS AGAINST THE VIEW TAKEN IN THE ABOV E CASE LAW. 4. THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOPP INVESTMENT LIMITED VS CIT HAS ALSO HELD THAT ONLY T HE REAL EXPENDITURE CAN BE DISALLOWED. 5. THAT THE DISALLOWANCE MADE BY THE LEARNED ASSESS ING OFFICER AS WELL AS BY THE LEARNED CIT (APPEAL) IS WRONG, AR BITRARY, UNJUST AGAINST THE FACT AS WELL AS AGAINST THE LAW. 6. THAT THE APPELLANT CRAVES, LEAVE, TO AMEND ANYON E OR MORE OF THE GROUND OF APPEAL AS STATED ABOVE AND AS & WHEN THE NEED FOR DOING SO ARISE. 2. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT THE ASSESSMENT YEAR INVOLVED IS 2007-08 AND THE ASSESSING OFFICER HAS APPLIED THE PROVISIONS OF RULE 8D FOR MAKING THE DISALLOWANCE U/S 14A OF THE INCOME-TAX ACT, 1961. IT WAS PLEADED BEFORE US THAT THE ISSUE MAY BE SET ASIDE T O THE FILE OF THE ASSESSING OFFICER ITA NO.4587/DEL/2012 3 TO BE DECIDED IN VIEW OF THE DECISION OF HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF MAXOPP INVESTMENT LIMITED VS. CIT REPORTED IN (2011) 246 CTR 162 (DEL.). AFTER HEARING BOTH THE SIDES, WE FIND IT A PPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOPP INVE STMENT LIMITED VS. CIT, CITED SUPRA. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2012. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 30 TH DAY OF OCTOBER, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI