DCIT, New Delhi V. M/s. Jindal Equipment Leasing & Consultency Services Ltd., New Delhi

ITA 5514/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6799 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5514/DEL./2015 (ASSESSMENT YEAR : 2007-08) DCIT, CIRCLE 13 (1), VS. M/S. JINDAL EQUIPMENT LEA SING & NEW DELHI. CONSULTANCY SERVICES LTD., 37, NAJAFGARH ROAD, NEW DELHI. (PAN : AAACJ0091P) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. NIDHI SRIVASTAVA, CIT DR DATE OF HEARING : 24.04.2019 DATE OF ORDER : 25.04.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT, CIRCLE 13 (1), NEW DELHI (HER EINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 21.07.2015 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, DELHI, QUA THE ASSESSMENT YEAR 2007-08 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF DISALLOWANCE MADE U/S 14A TO THE BOOK PROFIT U/S 154 OF THE INCO ME TAX ACT, 1961. ITA NO.5514/DEL./2015 2 2. THAT THE ORDER OF LD. CIT (A) IS ERRONEOUS AND I S NOT TENABLE ON FACTS AND IN LAW. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO THE BUSI NESS OF DEALING IN SHARES AND SECURITIES, INVESTMENTS AND ADVANCING LO ANS ETC. ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS EAR NED DIVIDEND INCOME OF RS.7,02,12,550/- WHICH HAS BEEN CLAIMED A S EXEMPT INCOME UNDER SECTION 10 (34) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). AO BY INVOKING THE PROVISIONS CO NTAINED U/S 14A OF THE ACT READ WITH RULE 8D OF THE INCOME-TAX RULE S, 1962 (FOR SHORT THE RULES) MADE THE DISALLOWANCE TO THE TUN E OF RS.92,20,419/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE APPEAL. FEE LING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. C IT DR AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.5514/DEL./2015 3 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, OR DERS PASSED BY THE LOWER REVENUE AUTHORITIES AND ARGUMENTS ADDR ESSED BY THE LD. DR FOR THE REVENUE, THE SOLE QUESTION ARISES FO R DETERMINATION IN THIS CASE IS :- AS TO WHETHER SECTION 154 OF THE ACT CAN BE INVOKE D ON THE ISSUES WHICH ARE DEBATABLE ONE? 7. UNDISPUTEDLY, ORIGINAL ASSESSMENT WAS FRAMED U/S 143 (3) OF THE ACT MAKING ADDITION OF RS.92,20,419/- U/S 14A O F THE ACT WHICH WAS REDUCED TO RS.77,06,410/- BY THE LD. CIT (A) ON APPEAL. IT IS ALSO NOT IN DISPUTE THAT IN THE SECOND APPEAL FILED BEFORE THE TRIBUNAL, THE ISSUE OF SECTION 14A WAS SENT BACK TO AO TO DECIDE AFRESH WHO HAS PASSED THE ORDER ON 07.11.2012 BY MA KING ADDITION OF RS.77,06,410/- U/S 14A IN THE NORMAL COMPUTATION BUT NO SUCH ADDITION WAS MADE TO THE BOOK PROFIT. IT IS ALSO N OT IN DISPUTE THAT TAXABLE INCOME AS PER THE BOOK PROFIT HAS BEEN CLAI MED BY THE ASSESSEE AT RS.1,90,67,455/- WHICH WAS ACCEPTED BY THE AO. 8. HOWEVER, SUBSEQUENTLY AO HAS RECTIFIED ITS EARLI ER ORDER WHICH WAS SET ASIDE BY THE TRIBUNAL, U/S 154 ON 23. 12.2013 BY INCREASING THE BOOK PROFIT U/S 154JB TO THE TUNE OF RS.77,06,410/-. ITA NO.5514/DEL./2015 4 9. LD. CIT (A) HAS DELETED THE ADDITION BY FOLLOWIN G THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF VOLKART BROTHERS 82 ITR 50 AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RTCL LTD. 348 ITR 320 ON THE GROUND THAT WHEN THE ISSUE IS DEBATABLE SECTION 154 CANNOT BE I NVOKED. SINCE THE LD. CIT (A) HAS DELETED THE ADDITION BY FOLLOWI NG THE SETTLED PRINCIPLE OF LAW THAT WHEN ISSUE IS DEBATABLE ONE S ECTION 154 CANNOT BE INVOKED TO MAKE FURTHER ADDITION, WE FIND NO ILLEGALITY OR PERVERSITY IN THE IMPUDENT ORDER PASSED BY THE LD. CIT (A), HENCE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF APRIL, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 25 TH DAY OF APRIL, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-5, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.