INCOME TAX OFFICER, WARD-1-1, KOTA V. SHRI TAIYAB ALI, KOTA

ITA 478/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6335 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNAM RAI
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 478/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 THE ITO, WARD-1(1), KOTA. CUKE VS. SHRI TAIYAB ALI 256, SHOPPING CENTRE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABSPB 8068 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : SMT. PUNAM RAI (DCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 18/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 20/07/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 09.01.2018 OF CIT(A), KOTA FOR THE ASSESSMENT YEAR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS AS UNDER:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 41,901/- MADE BY THE AO U/S 14A R.W. RULE 8D. (II) THE APPELLANT CRAVES LIBERTY TO RAISE ADDITION AL GROUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HE ARING. ITA NO. 478/JP/2018 ITO VS SHRI TAIYAB ALI 2 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE-RESP ONDENT THIS APPEAL WAS CALLED FOR HEARING HOWEVER, WE FIND TAX EFFECT IN THIS APPEAL IS ONLY RS. 15,000/- AND THEREFORE, EVEN NOT EXCEED ING RS. 10 LACS WHEREAS AS PER THE CIRCULAR NO. 3/2018 DATED 11.07. 2018 OF CBDT THE DEPARTMENT SHALL WITHDRAW ALL THE APPEALS HAVING TA X EFFECT NOT EXCEEDING RS. 20 LACS PENDING BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT AS IT IS APPARENT FROM THE GROUNDS O F APPEAL THE ISSUE FALLS IN THE EXCEPTION UNDER PARA 8(B) OF THE CIRCU LAR NO. 21/2015 AND PARA 10(B) OF CIRCULAR NO. 3/2018. 3. WE FIND THAT THE AO MADE DISALLOWANCE OF RS. 41, 901/- U/S 14A WHICH WAS DELETED BY THE LD. CIT(A) BY RECORDING TH E FACT THAT THE ASSESSEES OWN INTEREST FREE FUND WAS MORE THAN SUF FICIENT FOR THE INVESTMENT IN QUESTION AND THEREFORE, THE DISALLOWA NCE MADE BY THE AO ON ACCOUNT OF INTEREST EXPENDITURE IS NOT CALLED FO R. AT THE OUTSET WE NOTE THAT THE CIT(A) HAS DELETED THE DISALLOWANCE M ADE BY THE AO BY GIVING A FINDING OF FACT THAT NO EXPENDITURE WAS IN CURRED BY THE ASSESSEE FOR EARNING EXEMPT INCOME. FURTHER, AS PER CLAUSE (B) OF PARA 8 OF CIRCULAR NO. 21/2015 OR CLAUSE (B) OF PARA 10 OF CIRCULAR NO. 3/2018 THE ISSUE WHICH INVOLVES THE BOARD ORDER, NO TICES, INSTRUCTION AND CIRCULAR WHICH HAS BEEN HELD TO BE ILLEGAL OR U LTRA VIRES ARE REQUIRED ITA NO. 478/JP/2018 ITO VS SHRI TAIYAB ALI 3 TO BE CONTESTED ON MERITS. EVEN IF THE TAX EFFECT I S LESS THAN MANDATORY LIMIT PRESCRIBED IN THESE CIRCULAR. THE ISSUE OF DI SALLOWANCE MADE U/S 14A DOES NOT INVOLVE THE QUESTION OF HOLDING ANY BO ARD ORDER, NOTICES, INSTRUCTION AND CIRCULAR AS ILLEGAL OR ULTRA VIRES. ACCORDINGLY, THIS ISSUE DOES NOT FALL IN THE EXCEPTION AS CLAIMED BY THE DE PARTMENT. HENCE, WHEN THE TAX EFFECT IN THIS APPEAL OF THE REVENUE I S NOT EXCEEDING THE LIMITS PROVIDED IN THE CIRCULAR NO. 21/2015 AS WELL AS CIRCULAR NO. 3/2018 THE SAME IS NOT MAINTAINABLE. ACCORDINGLY TH E APPEAL OF THE REVENUE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/07/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/07/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD-1(1), KOTA. 2. IZR;FKHZ@ THE RESPONDENT- SHRI TAIYAB ALI, KOTA. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 478/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR