ACIT, Rohtak V. M/s. Haryana Gramin Bank, Rohtak

ITA 587/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3028 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 587/DEL/2014 (ASSESSMENT YEAR: 2010 - 11 ) ACIT, ROHTAK CIRCLE, ROHTAK VS. HARYANA GRAMIN BANK, DELHI ROAD, ROHTAK PAN:AAALH0138G (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ROBIN RAWAL, SR. DR RESP ONDENT BY: SH NAVEEN KUMAR GOYAL, CA DATE OF HEARING 08 /01/2016 DATE OF PRONOUNCEMENT 07 / 03 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1 . TH IS APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER DATED 22.11.2013 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), ROHTAK FOR THE ASSESSMENT YEAR 2010 - 11. 2 . THE ONLY GROUND OF APPEAL IS THE DISALLOWANCE U/S 14A OF THE INCOME TAX ACT OF RS.9146980/ - DELETED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS). 3 . THE BRIEF FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARED TOTAL INCOME OF RS.583929411/ - ON 20.09.2010. THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS.9201123.53 DURING THE YEAR AND THE ASSESSEE SUBMITTED A REVISED COMPUTATION OF INCOME SHOWING THAT THE EXEMPT INCOME IS RS.11838675/ - FOR THE REASON THAT LOSS ON SALE OF MUTUAL FUND OF RS. 2637551/ - HAS BEEN DEDUCTED FROM THE DIVIDEND INCOME. ON 21.11.2012 AO ASKED THE A SSESSEE TO FURNISH DETAILS OF EXPENDITURE RELATING TO EXEMPT INCOME AS DISALLOWANCE WAS SHOW BY ASSESSEE TO BE NIL. THEREFORE THE AO APPLIED PAGE 2 OF 3 PROPORTIONATE METHOD AND DISALLOWED RS. 9146980/ - U/S 14A OF THE ACT . AGAINST THIS ASSESSEE CARRIED THE MATTER B EFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), WHO DELETED THE ADDITION. AT THE TIME OF ALLOWING THE APPEAL OF THE ASSESSEE REVISED COMPUTATION OF INCOME WHERE ASSESSEE HAS CHANGE D THE TOTAL INCOME FROM RS. 583879411/ - TO RS. 5138860/ - . THE COM PUTATION OF CALCULATION OF EXPENSES DISALLOWABLE U/S 14A WAS ALSO SUBMITTED WHICH SHOWS NIL EXPENDITURE AND THEREFORE DISALLOWANCE U/S 14A WAS DELETED BY CIT (A) . THEREFORE REVENUE IS IN APPEAL. 4 . BEFORE US THE LD AR SUBMITTED THAT THERE IS NO SATISFACTIO N RECORDED BY THE AO AND THE MANNER OF DISALLOWANCE IS AD HOC BASIS BY THE AO AND THEREFORE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ON CONSIDERATION OF THIS FACT HAS DELETED THE ADDITION. 5 . THE LD DR SUBMITTED THAT THE COMPUTATION MADE BY THE ASSESSEE IS INCORRECT AS IT DOES NOT HAVE AVERAGE VALUE OF INVESTMENTS AND THEREFORE IT NEEDS VERIFICATION. 6 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION WE FIND THAT THE AO HAS NOT RECORDED ANY FINDING ABOUT THE EXPENSES INCURRED BY THE ASSESSEE FOR EXEMPT INCOME SHOWN AT NIL. 7 . FURTHER THE CALCULATION OF EXPENSES SUBMITTED BY THE ASSESSEE PRIMA FACIE DOES N OT SHOW THAT HOW AVERAGE VALUE OF INVESTMENT CAN BE NIL. THESE FACTS REQUIRE VERIFICATION FROM THE SIDE OF REVENUE. IF THE AVERAGE VALUE OF INVESTMENT IS NIL THEN THE COMPUTATION OF DISALLOWANCE MADE BY THE ASSESSEE MAY BE CORRECT. BEFORE US NEITHER THE LD DR NOR THE LD AR OF THE ASSESSEE SUBMITTED ANY DETAILS ABOUT THE WORKING OF RULE 14A AND RELEVANT DOCUMENTS AS THE BALANCE SHEET ETC OF THE ASSESSEE. THE LEARNED PAGE 3 OF 3 COMMISSIONER OF INCOME - TAX (APPEALS) HAS ALSO NOT LOOK ED INTO THE FACT S AS TO HOW THE AVERAG E VALUE OF INVESTMENT CAN BE NIL WHEN THE ASSESSEE HAS EARNED SUCH A HUGE AMOUNT OF EXEMPT INCOME. THEREFORE IN THE INTEREST OF JUSTICE THE WHOLE ISSUE OF DISALLOWANCE U/S 14A OF THE ACT AS WELL AS REVISED COMPUTATION OF TOTAL INCOME FURNISHED BY THE AS SESSEE IS SET ASIDE TO THE FILE OF AO FOR DETAILS VERIFICATION AND THEN COMPUT E DISALLOWANCE U/S 14A OF THE ACT AND GRANT THE REVISION IN INCOME AS SHOWN BY THE ASSESSEE, IF FOUND IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT AO SHALL CONSIDER ALL THE JUD ICIAL PRONOUNCEMENT AVAILABLE AND ALSO GIVEN THE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8 . IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 / 03 /2016 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 7 / 03 / 2016 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI