M/s Shaw Wallace Breweries Ltd., V. CIT,

ITA 524/BANG/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5442 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOWMYA ACHAR ADDITIONAL
• Keywords: Source of fund
• Section: 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.524/BANG/2013 ASSESSMENT YEARS : 2008-09 M/S. SW FINANCE CO. LTD., (FORMERLY KNOWN AS M/S. SHAW WALLACE BREWERIES LTD.,) UB TOWERS, 6 TH FLOOR, 24, VITTAL MALLYA ROAD, BENGALURU-560001. PAN : AAFCS3230E VS. COMMISSIONER OF INCOME TAX, BENGALURU-III, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SMT. SHREYA LOYALKA, C. A. REVENUE BY : SMT. SOWMYA ACHAR, ADDITIONAL CIT DATE OF HEARING : 05.04.2017 DATE OF PRONOUNCEMENT : 28.04.2017 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIRE CTED AGAINST THE ORDER OF THE LEARNED CIT DATED 22.03.20 13 PASSED BY HIM UNDER SECTION 263 FOR THE ASSESSMENT YEAR 20 12-13. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ITA NO.524/BANG/2013 PAGE 2 OF 6 2. LEARNED AR OF THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ITA NO.524/BANG/2013 PAGE 3 OF 6 1. ACCEL LTD., VS. DCIT 54 SOT 174 (CHENNAI) 2. CIT VS. DLF LTD., 350 ITR 555 (DELHI) 3. PRIYA EXHIBITORS (P.) LTD., VS. ACIT, ITA NO. 17 07 (DELHI) 2011 4. CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC) . 3. BY PLACING RELIANCE ON THE ABOVE JUDGMENTS, THIS WA S THE ARGUMENT OF THE LEARNED AR OF THE ASSESSEE THAT LEA RNED CIT HAS TO GIVE A FINDING IN THE ORDER PASSED BY HIM UN DER SECTION 263 THAT CERTAIN AMOUNT CLAIMED BY THE ASSESSEE AS DEDUCTION AGAINST COMPUTATION OF INCOME DEFACTO RELATED TO EA RNING OF TAX- FREE INCOME AND IN THE ABSENCE OF SUCH FINDING, IT IS NOT POSSIBLE TO HOLD THAT THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND THEREFORE, UNDER THESE FACTS, THE REV ISION ORDER PASSED BY HIM IS NOT JUSTIFIED. IT IS SUBMITTED TH AT IN THE PRESENT CASE ALSO, THE LEARNED CIT IN THE IMPUGNED ORDER HA S NOT GIVEN SUCH FINDING AND THEREFORE, IN THE PRESENT CASE ALS O, THE ORDER U/S 263 IS NOT JUSTIFIED. 4. THE LEARNED DR OF THE REVENUE SUPPORTED THE ORDER PASSED BY THE CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE ASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 143 (3) OF THE IT ACT ON 25.11.2010, THERE IS NO DI SCUSSION IN THE ORDER REGARDING ANY ENQUIRY BY THE AO WITH REGARD T O INCURRING OF ITA NO.524/BANG/2013 PAGE 4 OF 6 EXPENDITURE FOR EARNING EXEMPTED INCOME. LEARNED AR OF THE ASSESSEE DID NOT BRING ON RECORD ANY EVIDENCE TO SH OW THAT ANY QUERY WAS RAISED BY THE A. O. IN COURSE OF ASSESSME NT PROCEEDINGS ON THIS ISSUE. IT IS NOTED BY CIT ON PA GE NO. 4 OF HIS ORDER THAT IT WAS SUBMITTED BY THE ASSESSEE BEFORE HIM THAT THE ASSESSEE HAS EARNED DIVIDEND INCOME IN THE PRESENT YEAR OF RS.520485/-. IT WAS ALSO NOTED BY HIM THAT THE ASS ESSEE HAS SUBMITTED THAT THE ASSESSEE HAS DEBITED THE EXPENDI TURE TO THE TUNE OF RS.98.30 LAKHS OUT OF WHICH THE ASSESSEE IT SELF HAS ADDED BACK THE AMOUNT OF RS.69.03 LAKHS INCURRED BY THE ASSESSEE ON ACCOUNT OF INVESTMENT REDEMPTION LOSS. ON PAGE NO. 6 OF HIS ORDER, IT IS NOTED BY THE LEARNED CIT THAT THE ASSESSEE BEING A FINANCING & INVESTMENT COMPANY HAS ONLY 2 SOURCES OF INCOME I.E., INTEREST INCOME AND DIVIDEN D INCOME AND ALL THE EXPENDITURE DEBITED BY THE ASSESSEE TO P & L ACCOUNT ARE RELATED ONLY TO EARNING OF THESE 2 INCOMES. FROM T HIS FINDINGS OF LEARNED CIT, IT COMES OUT THAT HE HAS GIVEN A CATEG ORICAL FINDING THAT THE ASSESSEE HAS INCURRED ADMINISTRATIVE EXPEN SES OF RS.98.30 LAKHS (-) RS.69.03 LAKHS FOR WHICH DEDUCTI ON HAS BEEN CLAIMED BY THE ASSESSEE AND SUCH EXPENSES ARE CLAIM ED IN RESPECT OF THESE 2 INCOMES I.E., INTEREST INCOME AN D DIVIDEND INCOME. IN VIEW OF THESE FINDINGS OF THE LEARNED C IT IN THE IMPUGNED ORDER, IN OUR CONSIDERED OPINION, THE JUDG MENTS ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED AR AR E NOT APPLICABLE BECAUSE THE FACTS ARE DIFFERENT. IN THO SE CASES, IT IS ITA NO.524/BANG/2013 PAGE 5 OF 6 NOTED BY THE TRIBUNAL THAT NO SUCH FINDING HAS BEEN GIVEN BY THE LEARNED CIT THAT ANY EXPENDITURE HAS BEEN CLAIMED B Y THE ASSESSEE WHICH IS RELATABLE TO EARNINGS OF TAX FREE INCOME. HENCE THESE JUDGMENTS DO NOT RENDER ANY HELP TO THE ASSESSEE IN THE PRESENT CASE. WE ALSO FIND THAT THE CIT HAS FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN TH E CASE OF CIT VS. GALILEO INDIA PVT. LTD., (2012) 211 TAXMAN 35 (DELHI) WHEREIN IT WAS HELD THAT IF THE AO DOES NOT MAKE AN Y ENQUIRY WHICH IS REQUIRED AND THE ORDER BY THE AO IS NOT IN CONFORMITY WITH THE ACT, IT IS ERRONEOUS AND CAN BE REVISED B Y THE CIT. IN THIS CASE ALSO, THE AO DID NOT MAKE ANY ENQUIRY ABO UT DISALLOWANCE UNDER SECTION 14A OF THE IT ACT. THER EFORE, RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE HONBLE DELHI HIGH COURT, WE DECLINE TO INTERFERE IN THE ORDER OF THE CIT. REGARDING RELIANCE PLACED BY THE LEARNED AR OF THE ASSESSEE O N THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. VEGETABLES PRODUCTS LTD., (SUPRA), WE FIND THAT IT WAS HELD BY HONBLE APEX COURT IN THIS CASE THAT IF TWO REASONA BLE CONSTRUCTIONS OF A TAXING PROVISIONS ARE POSSIBLE T HEN CONSTRUCTION IN FAVOUR OF THE ASSESSEE MUST BE ADOP TED. IN THE PRESENT CASE, THIS IS NOT SHOWN BY THE LEARNED AR O F THE ASSESSEE AS TO HOW THERE CAN BE A REASONABLE CONSTR UCTION OF SECTION 14A OF THE IT ACT WHICH MAY BE IN FAVOUR OF THE ASSESSEE BY SHOWING THAT MAKING NO ENQUIRY BY THE A O IN RESPECT OF EXPENSES INCURRED BY THE ASSESSEE FOR EA RNING ITA NO.524/BANG/2013 PAGE 6 OF 6 DIVIDEND INCOME IS A POSSIBLE VIEW. HENCE THIS JUD GMENT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESE NT CASE. 6. IN VIEW OF THE ABOVE DISCUSSION, WE FIND NO INFIRMI TY IN THE IMPUGNED ORDER OF THE CIT PASSED BY HIM UNDER SECTI ON 263 OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF APRIL, 2017. SD/- (LALIET KUMAR) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 28.04.2017 /NSHYLU/ * COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE