PHARMED LTD, MUMBAI V. DCIT CIR 2(2)(2), MUMBAI

ITA 6222/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6144 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 11-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C B ENCH MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO. 6222/MUM/2017 (ASSESSMENT YEAR 2013-14) PHARMED LTD. PHARMED HOUSE, WALCHAND HIRACHAND MARG, MUMBAI-400023. PAN: AAACP2191A VS. DCIT-2(2)(2) ROOM NO. 549, AAYAKAR BHAVAN, M.K. MARG, MUMBAI-20. APPELLANT RESPONDENT APPELLANT BY : SHRI ANUJ KISNADWALA (AR) RESPONDENT BY : SHRI D.G. PANSARI (DR) DATE OF HEARING : 16.01.2019 DATE OF PRONOUNCEMEN T : 16.01.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-5, (THE LD. CIT(A) DATED 01.08 .2017 FOR ASSESSMENT YEAR 2013-14. THOUGH THE ASSESSEE HAS RAISED AS MAN Y AS FIVE GROUNDS OF APPEAL, HOWEVER, IN OUR CONSIDERED VIEW THE SOLE GR OUND OF APPEAL RELATES TO DISALLOWANCE UNDER SECTION 14A OF THE I.T. ACT. 2. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUND OF APPEAL RAISED B Y ASSESSEE IS COVERED BY VARIOUS DECISION OF TRIBUNAL AS WELL AS DECISION OF HONBLE DELHI HIGH I TA NO. 6222/MUM2017 PHARMED LIMITED 2 COURT IN JOINT INVESTMENTS VS. CIT (372 ITR 694), P UNJAB & HARYANA HIGH COURT IN PCIT VS. STATE BANK OF PATIALA (393 ITR 47 6). THE LD. AR FURTHER SUBMITS THAT DURING THE RELEVANT FINANCIAL YEAR, TH E ASSESSEE EARNED EXEMPT INCOME OF RS. 28,005/-, THEREFORE, IN VIEW OF THE D ECISION REFERRED ABOVE, THE DISALLOWANCE UNDER SECTION 14A SHOULD NOT EXCEED TH E EXEMPT INCOME.THE LD. AR OF THE ASSESSEE ALSO FURNISHED THE COPY OF V ARIOUS DECISIONS WHICH ARE AS FOLLOWS: (I) PR. CIT V. STATE BANK OF PATIALA [393 ITR 476 (P&H) ]. (II) JOINT INVESTMENTS VS. CIT [372 ITR 694 (DEL)]. (III) DCIT VS. M/S STORE ONE RETAIL INDIA LTD. IN ITA NO. 4731/MUM/2017. (IV) GOLD SEAL ENGINEERING PRODUCTS P. LTD. V. ACIT IN I TA NO. 6259/MUM/2016. (V) DCIT V. MIRC ELECTRONICS LTD. IN ITA NO. 3845/MUM/2 018. (VI) M/S SLYVEX CABLE CO. PVT. LTD. V. DY.CIT IN ITA NO. 8581/MUM/2011. (VII) INDUS VALLEY INVESTMENTS. VS. DCIT IN ITA NO. 3763/ DEL/2013. (VIII) M/S DAGA GLOBAL CHEMICALS V. ASST. CIT IN ITA NO. 5592/MUM/2012. 3. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE AFTER GOING THROUGH THE GROUNDS OF APPEAL S UBMITS THAT DURING THE RELEVANT FINANCIAL YEAR, THE ASSESSEE HAS SHOWN TO HAVE EARNED DIVIDEND INCOME OF RS. 28,005/- AND BY FOLLOWING THE DECISIO N OF TRIBUNAL AND THE DECISION OF HONBLE HIGH COURT IN JOINT INVESTMENTS VS. CIT(SUPRA), HONBLE P&H HIGH COURT IN STATE BANK OF PATIALA (SU PRA), WHICH IS AFFIRMED BY HONBLE APEX COURT, THE ISSUE IS COVERED. I TA NO. 6222/MUM2017 PHARMED LIMITED 3 4. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AN D HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THERE IS NO DISPUTE TH AT DURING THE RELEVANT FINANCIAL YEAR, THE ASSESSEE HAS EARNED DIVIDEND IN COME OF RS. 28,005/-. THEREFORE, FOLLOWING THE VARIOUS DECISIONS OF DECIS ION OF HONBLE DELHI HIGH COURT IN JOINT INVESTMENTS VS. CIT (372 ITR 69 4), PUNJAB & HARYANA HIGH COURT IN PCIT VS. STATE BANK OF PATIALA (393 I TR 476), WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE UNDE R SECTION 14A TO THE EXTENT OF DIVIDEND INCOME. IN THE RESULT, GROUND OF APPEAL RAISED BY ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/ 01/2019. SD/ SD/- RAMIT KOCHAR PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 16.01.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR C BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI