JCIt, Corp Cir 2(2), Chennai V. Hyundai Steel india P Ltd, Kancheepuram

ITA 595/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7816 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: TAXATION; K RAJU GENERAL MANAGER LEGAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 143(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.595/CHNY/2019 / ASSESSMENT YEAR :2014-15 THE JOINT COMMISSIONER OF INCOME TAX (OSD), CORPORATE CIRCLE 2(2), ROOM NO. 512, 5 TH FLOOR, WANAPARTHY BLOCK, NO. 121, M. G. ROAD, CHENNAI 600 034. VS. M/S. HYUNDAI STEEL INDIA P. LTD., NO. 49, SENGADU VILLAGE, MANAVALA NAGAR, SRIPERUMPUDUR, KANCHEEPURAM 602 002. [PAN:AABCH7074D] ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT / RESPONDENT BY : SHRI K. RAJU, GENERAL MANAGER, LEGAL & TAXATION / DATE OF HEARING : 02.07.2019 /DATE OF PRONOUNCEMENT : 19.07.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 6, CHENNAI DATED 16.11.2018 RELEVANT TO THE ASSESSMENT YEAR 2014-15. THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT R.W. RULE 8D. 2. THE APPEAL FILED BY THE REVENUE IS DELAYED BY 3 DAYS, FOR WHICH, THE REVENUE HAS FILED A PETITION FOR CONDONATION OF THE DELAY, TO WHICH; THE LD. I.T.A. NO.595/M/19 2 COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY SERIOUS OBJECTION. CONSEQUENTLY, SINCE THE REVENUE WAS PREVENTED BY SUFFICIENT CAUSE, THE DELAY OF 3 DAYS IN FILING OF THE APPEAL STANDS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 30.11.2014 DECLARING AN INCOME OF .9,23,94,570/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. THE ASSESSING OFFICER COMPLETED SCRUTINY ASSESSMENT UNDER SECTION 143(3)OF THE ACT DETERMINING THE ASSESSED TOTAL INCOME AT . 9,93,85,631/- AFTER MAKING DISALLOWANCE OF .69,69,630/- UNDER SECTION 14A OF THE ACT. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FACTS OF THE CASE AND BY FOLLOWING THE DECISION IN THE CASE OF CIT V. CHETTINAD LOGISTICS (P) LTD. [2017] 80 TAXMANN.COM 221 (SC), THE LD. CIT(A) DELETED DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. IT WAS THE SUBMISSION OF THE LD. DR THAT A PROPOSAL IN THE CASE OF CIT V. CHETTINAD LOGISTICS (P) LTD. (SUPRA) HAS BEEN SENT TO THE LD. PR. DGIT (L&R), NEW DELHI FOR FILING OF REVIEW PETITION BEFORE THE HONBLE SUPREME COURT AND THEREFORE, PLEADED THAT THE ORDER PASSED BY THE LD. CIT(A) SHOULD BE REVERSED AND RESTORED THAT OF THE ASSESSING OFFICER. I.T.A. NO.595/M/19 3 5. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SLP PREFERRED BY THE DEPARTMENT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT AND PRAYED FOR CONFIRMING THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES, PERUSE THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER IN HIS ORDER OBSERVED THAT THE ASSESSEE HAS MADE INVESTMENTS WHOSE INCOME IS NOT INCLUDABLE IN THE TOTAL INCOME OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 14A OF THE ACT AND DISALLOWED THE EXPENSES DETERMINED IN ACCORDANCE WITH RULE 8D OF THE INCOME TAX RULES. ON APPEAL, BY FOLLOWING THE DECISION IN THE CASE OF CIT V. CHETTINAD LOGISTICS (P) LTD. (SUPRA), WHEREIN, WHILE DISMISSING THE SLP FILED BY THE DEPARTMENT, IT WAS HELD THAT WHERE NO EXEMPT INCOME I.E., DIVIDEND, WAS EARNED IN THE RELEVANT ASSESSMENT YEAR BY THE ASSESSEE, SECTION 14A OF THE ACT COULD NOT BE INVOKED, THE LD. CIT(A) DELETED THE ADDITION OF .69,69,631/- MADE UNDER SECTION 14A OF THE ACT. AGAINST THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE ABOVE REFERRED CASE, THE HONBLE SUPREME COURT DISMISSED THE SLP PREFERRED BY THE DEPARTMENT AND NO OTHER ORDER AGAINST THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT WAS BROUGHT ON RECORD. IN VIEW OF THE ABOVE, WE I.T.A. NO.595/M/19 4 FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). ACCORDINGLY, THE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 19 TH JULY, 2019 AT CHENNAI. SD/- SD/- (S. JAYARAMAN) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 19.07.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.