Jatinder Singh Anand, New Delhi V. ITO, New Delhi

ITA 5018/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7096 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 05-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 22-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ATUL KUMAR
• Keywords: Earning of tax free income
• Section: 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 5018/DEL/2016 : ASSTT. YEAR : 2012 - 1 3 JATINDER SINGH ANAND, B - 36, VISHAL E NCLAVE, RAJOURI GARDEN, DELHI - 110027 VS INCOME TAX OFFICER, WARD - 45(5 ), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A FWPA6377D ASSESSEE BY : SH. ATUL KUMAR, ADV. REVENUE BY : NONE DATE OF HEARING : 0 5 .01 .201 7 DATE OF PRONOUNCEMEN T : 10 .01 .201 7 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 20.07.2016 OF LD. CIT(A) - XV , NEW DELHI . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. A.O. WAS WRONG, UNJUSTIFIED AND HAS ERRED IN L AW AND IN FACTS BY LEV YING AN ADDITION OF RS. 460,904/ - U/S 14A READ WITH RULE 8D OF THE INCOME TAX ACT, 1961 TO THE RETURNED INCOME ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENSE RELATABLE TO EXEMPT INCOME FROM INVESTMENT. 2. THE LD. A.O. WAS WRONG, UNJU STIFIED AND HAS ERRED IN LAW AND IN FACTS BY LE VYING AN ADDITION OF RS. 30,923/ - U/S 14A READ WITH RULE 8D OF THE INCOME TAX ACT, 1961 TO THE RETURNED INCOME ON ACCOUNT OF CHARGEABILITY OF DISALLOWANCE U/S 14A. ITA NO . 5018 /DEL /201 6 JATINDER SINGH ANAND 2 3. FURTHER, THE LD. A.O. WAS WRONG, UNJUSTIFI ED AND HAS ERRED IN LAW AND ON FACTS BY PASSING AN ORDER IMPOSING ADDITIONAL INTEREST U/S 234B AND 234C OF THE INCOME TAX ACT, 1961. 4. FURTHER, THE LD. A.O. WAS WRONG, UNJUSTIFIED AND HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT HAS DELIBE RATELY & KNOWINGLY FILED INACCURATE PARTICULAR OF HIS INCOME AND CONCEALED HIS ACTUAL INCOME TO THE EXTENT OF RS. 460.904/ - . 5. FURTHER, THE LD. A.O. WAS WRONG, UNJUSTIFIED AND HAS ERRED IN LAW AND ON FACTS IN COMPUTING THE DISALLOWANCE UNDER RULE 8D(2)(I I), BY CONSIDERING THE VALUE OF TOTAL ASSETS NET OF CURRENT LIABILITIES. 6. THE LD. A.O. WAS WRONG, UNJUSTIFIED AND HAS ERRED IN LAW AND IN FACTS BY NOT CONSIDERING THAT THE INTENTION BEHIND MAKING THE INVESTMENT BY THE ASSESSEE IS NOT FOR THE PURPOSE OF EARNING EXEMPT INCOME BUT FOR STRATEGIC REASONS AND BUSINESS EXPEDIENCY. 7. THE APPELLANT CRAVES LEAVE FOR MAKING ANY ADDITION, ALTERATION, DELETION OR MODIFICATION IN THE GROUNDS OF APPEAL BEFORE THE DISPOSAL OF THE APPEAL. 3 . FROM THE ABOVE GROUNDS, I T IS GATHERED THAT THE GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF ADDITION MADE BY THE AO U/S 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) R.W. RULE 8D OF THE INCOME TAX RULES, 196 2 AND THE CHARGING OF INTEREST U/S 234B AND 234C OF THE ACT. ITA NO . 5018 /DEL /201 6 JATINDER SINGH ANAND 3 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2012 DECLARING AN INCOME OF RS.11,94,630/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO MADE TH E ADDITION OF RS.4,60,904/ - AND RS.30,923/ - U/S 14A OF THE ACT R.W. RULE 8D OF THE INCOME TAX RULES, 1962. HE ALSO ADDED RS.4,207/ - BEING THE DIFFERENCE IN THE FIGURES OF FORM NO. 26AS. 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT (A) WHO SUSTAINED THE ADDITIONS MADE BY THE AO. 6 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE DID NOT DISPUTE THE ADDITION U/S 14A OF THE ACT BUT STATED THAT THERE WAS MISTAKE IN THE CALCULATIONS OF THE FIGURE WORKED OUT BY THE AO FO R THE ADDITION U/S 14A OF THE ACT AND THE MAIN MISTAKE IS IN THE FIGURES OF AVERAGE INVESTMENT WHICH HAD WRONGLY BEEN TAKEN BY THE AO AT RS.61,84,692/ - INSTEAD OF RS.30,92,346/ - . HE REQUESTED TO RESTORE THE MATTER TO THE AO FOR VERIFICATION AND WORKING OUT THE CORRECT FIGURE. NOBODY WAS PRESENT ON BEHALF OF THE DEPARTMENT. 7 . I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT APPEARS THAT INADVERTENTLY THE AO HAD TAKEN TOTAL FIGURE OF INVESTMENT INSTEAD OF AVERAGE INVESTMENT WHILE WORKING OUT THE DISALLOWANCE U/S 14A OF THE ACT. IN THAT VIEW OF THE MATTER, THIS ISSUE IS SET ASIDE BACK TO THE FILE OF ITA NO . 5018 /DEL /201 6 JATINDER SINGH ANAND 4 THE AO FOR RE - ADJUDICATION IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (O RDER PRONOUNCED IN THE COURT ON 10 /01/2017 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 10 /01/2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR