ACIT, Sangrur V. M/s Satyam Home Furnishing Pvt. Ltd., Barnala

ITA 620/CHANDI/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4530 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2014-2015
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Earning of tax free income; Proportionate interest
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH !, ' # $ , . .. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R. KUMAR , A M ./ ITA NO. 1238/CHD/2016 / ASSESSMENT YEAR : 2013-14 THE ACIT CIRCLE SANGRUR M/S SATYAM HOME FURNISHING PVT. LTD. MANSA ROAD, BARNALA ./ PAN NO: AABCJ8398J / APPELLANT / RESPONDENT ./ ITA NO. 620/CHD/2017 / ASSESSMENT YEAR : 2014-15 THE ACIT CIRCLE SANGRUR M/S SATYAM HOME FURNISHING PVT. LTD. MANSA ROAD, BARNALA ./ PAN NO: AABCJ8398J / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI. ASHWANI KUMAR # ! ' / REVENUE BY : SHRI. MANJIT SINGH $ % ! &/ DATE OF HEARING : 30/05/2019 '()* ! &/ DATE OF PRONOUNCEMENT : 30/05/2019 ')/ ORDER PER DR. B.R.R. KUMAR, A.M: BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE REVEN UE AGAINST THE SEPARATE ORDER OF LD. CIT(A), PATIALA. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 1238/CHD/2016 : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX, ACT, 1961. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF WASTAGE/SCRAP ACCOUNT. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET AS IDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2.1 REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO. 620/CHD/2017 : 2 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), PATIALA HAS ERRED IN DELETING THE ADDITION OF RS. 7,58,969/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF PROPORTIONATE INTEREST U NDER SECTION 14A OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE JUDGM ENT GIVE BY HONBLE PUNJAB & HARYANA HIGH COURT INT EH CASE OF M/S AVON CYCLES LTD., LUDHIANA VS. CIT LUDHIANA & OTHERS (ITS NO. 277 OF 2013) AND ALS O ON CIRCULAR NO. 5 OF 2014 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), PATIALA HAS ERRED IN DELETING THE ADDITION OF RS. 71,38,683/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHORT GENERATION OF WASTAGE/SCRAP DUR ING THE MANUFACTURING PROCESS. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET AS IDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. APROPOS GROUND NO. 1 OF ITA NO. 620 AND ITA 1238 , WE FIND THAT THE ASSESSEE HAS NOT CLAIMED ANY INCOME AS EXEMPT IN IT S COMPUTATION AND HENCE THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. SINCE THERE IS NO CLAIM OF EXEMPT INCOME CLAIMED BY THE A SSESSEE AND THE DECISION OF THE LD. CIT(A) IS IN CONSONANCE WITH THE APEX COURT JUDGMENT IN THE CASE OF MAXOPP INVESTMENTS LTD. VS. CIT IN C.A. NOS. 104-10 9 OF 2015, [91 TAXMANN.COM 154 (SC)] AND THE JUDGMENTS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. LAKHANI MARKETING INC. 49 TAXMA NN.COM 257 (P&H) WE HEREBY DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A). 4. APROPOS GROUND NO. 2 OF ITA 620 AND ITA 1238 REG ARDING THE SHORT GENERATION OF WASTE DURING THE MANUFACTURING PROCES S WE FIND THAT THE ASSESSING OFFICER HELD THAT THE WASTAGE SHOWN AT 0. 11% IS ON A LOWER SIDE AND ESTIMATED A WASTAGE OF .075% THUS ENHANCING WASTAGE BY 0.64% WITHOUT BRINGING ABSOLUTELY ANYTHING ON RECORD AND ASSIGNIN G ANY SPECIFIC REASON FOR HOLDING SO WITH REGARD TO THE WASTAGE IN THE BUSINE SS OF DYEING THE FABRIC CLOTH. THE ASSESSING OFFICER HAS DULY EXAMINED THE BOOKS O F ACCOUNT BUT COULD NOT BRING OUT ANY DISCREPANCY. NO RATIONALE WHATSOEVER HAS BEEN POINTED OUT BY THE ASSESSING OFFICER WHILE THE ASSESSEE HAS DULY M AINTAINED DAY TO DAY QUANTITATIVE RECORD FOR THE GENERATION AND SALE OF WASTE. SINCE THE DETERMINATION OF THE WASTAGE HAS BEEN DONE BY THE A SSESSING OFFICER WITHOUT 3 ANY COGENT REASONS, WE HEREBY ESPOUSE THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. 5. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ! . .. . & , (DIVA SINGH) (DR. B.R.R. KUMAR) ' #/ JUDICIAL MEMBER '( #/ ACCOUNTANT MEMBER AG DATE: 30/05/2019 (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH GUARD FILE