Agrawal Roadlines Pvt.Ltd., Gandhidham V. The ACIT.,Circle-1, Ahmedabad

ITA 623/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94660 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Keywords: Earning of tax free income; Question of law
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 623/AHD/2012 / ASSESSMENT YEAR: 2008-09 AGARWAL ROADLINES PVT. LTD., PLOT NO. 356, GOKUL PARK, WARD 12-B, TAGORE ROAD, GANDHIDHAM PAN : AABCA 6667 M THE ACIT, CIRCLE-1, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR HEMANI, AR REVENUE BY : SHRI D.C. MISHRA, SR. DR. !'# / DATE OF HEARING : 28/08/2015 / DATE OF PRONOUNCEMENT: 30/10/2015 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-6, AHMEDABAD D ATED 08.12.2011 PASSED FOR ASSESSMENT YEAR 2008-09. 2. THE REGISTRY HAS POINTED OUT THAT THE APPEAL IS TIME BARRED BY 31 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY. IT IS PLEADED IN THE APPLICA TION THAT THE LEARNED CIT(A) HAS DECIDED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 08.12.2011. THIS ORDER WAS RECEIVED BY THE ASSESSEE ON 12.12.20 11. THE PAPERS WERE HANDED OVER TO THE ACCOUNTANT OF THE ASSESSEE FOR A PPOINTING THE COUNSEL IN AHMEDABAD AND HANDING OVER THE PAPERS. THE APPEAL OUGHT TO HAVE BEEN FILED ON OR BEFORE 20.02.2012, BUT THE APPEAL WAS F ILED BEFORE THE TRIBUNAL ON ITA NO.623/AHD/2012 AGARWAL ROADLINES PVT LTD VS ACIT FOR AY: 2008-09 2 17.03.2012. THE ACCOUNTANT HAS INADVERTENTLY MISPL ACED THE PAPERS AND FAILED TO BRING THIS FACT TO THE NOTICE OF THE ASSE SSEE. DUE TO THIS REASON, THE APPEAL COULD NOT BE FILED WELL IN TIME. ON THE STR ENGTH OF THE APPLICATION, THE ASSESSEE PRAYED THAT THE DELAY IN FILING THE AP PEAL MAY BE CONDONED AND THE APPEAL MAY BE DECIDED ON MERIT. 3. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE OPPOSED THE PRAYER OF THE ASSESSEE. 4. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE ARE OF THE OPINION THAT THERE IS NO DELIBERATE ATTEMPT AT THE END OF THE ASSESSEE FOR MAKING ITS APPEAL TIME BARRED, BECAUSE BY FILING TH E APPEAL LATE THE ASSESSEE WILL NOT GAIN ANYTHING. THE ERROR OCCURRED AT THE END OF THE ACCOUNTANT IS A PLAUSIBLE HUMAN ERROR AND THERE IS NO MALAFIDE IN SUCH EXPLANATION. THEREFORE, WE CONDONE THE DELAY IN FILING THE APPEA L AND PROCEED TO DECIDE THE APPEAL ON MERIT. 5. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LEARNED CIT(A) HAS CONFIRMED THE DISALLOWANCE OF EXPENSES AT RS.6,69,2 58/- WHICH WAS DISALLOWED BY INVOKING PROVISIONS OF SECTION 14A RE AD WITH RULE 8D OF THE INCOME-TAX RULES BY THE ASSESSING OFFICER. ON THE STRENGTH OF THE HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF CIT VS. CORRTECH ENERGY P. LTD, REPORTED IN [2015] 372 ITR 97 (GUJ.), THE LEARNED C OUNSEL FOR THE ASSESSEE CONTENDED THAT IF THERE IS NO EXEMPT INCOME IN THE HANDS OF THE ASSESSEE DURING THE YEAR, THEN NO DISALLOWANCE U/S 14A COULD BE MADE. HE TOOK US THROUGH THE COMPUTATION OF INCOME AND THE COPIES OF THE ACCOUNTS. HE ALSO DREW OUR ATTENTION TOWARDS THE PROFIT & LOSS ACCOUN TS AT PAGE NO.13 AND THE SCHEDULE OF OTHER INCOME IS BEING GIVEN UNDER O. THE SCHEDULE O IS AVAILABLE AT PAGE NO.28 OF THE PAPER-BOOK. BY TAKI NG THROUGH THIS SCHEDULE, HE CONTENDED THAT THERE IS NO DIVIDEND INCOME WHICH IS CLAIMED AS EXEMPT ITA NO.623/AHD/2012 AGARWAL ROADLINES PVT LTD VS ACIT FOR AY: 2008-09 3 INCOME BY THE ASSESSEE DURING THE YEAR. THE LEARNE D DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES BELOW. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE HONBLE GUJARAT HIGH COURT H AS CONSIDERED THIS ISSUE IN THE CASE OF CIT VS. CORRTECH ENERGY P. LTD (SU PRA) AND HELD THAT IF THERE IS NO EXEMPT INCOME CLAIMED BY THE ASSESSEE, THEN T HERE IS NO DISALLOWANCE OUGHT TO BE MADE U/S 14A OF THE INCOME-TAX ACT. THE FOLLOWING OBSERVATIONS ARE WORTH TO NOTE:- COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSESSIN G OFFICER AS WELL AS CIT(APPEALS) HAD APPLIED FORMULA OF RULE 8D OF THE I NCOME TAX RULES, SINCE THIS CASE AROSE AFTER THE ASSESSMENT YEAR 2009-2010 . SINCE IN THE PRESENT CASE, WE ARE CONCERNED WITH THE ASSESSMENT YEAR 200 9-2010, SUCH FORMULA WAS CORRECTLY APPLIED BY THE REVENUE. WE HOWEVER, N OTICE THAT SUB-SECTION(1) OF SECTION 14A PROVIDES THAT FOR THE PURPOSE OF COM PUTING TOTAL INCOME UNDER CHAPTER IV OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHIC H DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IN THE PRESENT CASE, THE TRIBUNAL HAS RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS TH AT THE TRIBUNAL HELD THAT DISALLOWANCE UNDER SECTION 14A OF THE ACT COULD NOT B E MADE. IN THE PROCESS TRIBUNAL RELIED ON THE DECISION OF DIVISION BENCH O F PUNJAB AND HARYANA HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX V WINSOME TEXTILE INDUSTRIES LTD REPORTED IN (2009) 319 ITR 204 (P & H ) IN WHICH ALSO THE COURT HAD OBSERVED AS UNDER (PAGE 207): '7. WE DO NOT FIND ANY MERIT IN THIS SUBMISSION. TH E JUDGEMENT OF THIS COURT IN ABHISHEK INDUSTRIES LTD (2006) 286 IT R 1 (P&H) WAS ON THE ISSUE OF ALLOWABILITY OF INTEREST PAID ON LO ANS GIVEN TO SISTER CONCERNS, WITHOUT INTEREST. IT WAS HELD THAT DEDUCT ION FOR INTEREST WAS PERMISSIBLE WHEN LOAN WAS TAKEN FOR BUSINESS PURPOS E AND NOT FOR DIVERTING THE SAME TO SISTER CONCERN WITHOUT HAVING NEXUS WITH THE BUSINESS. THE OBSERVATIONS MADE THEREIN HAVE TO BE READ IN THAT CONTEXT. IN THE PRESENT CASE, ADMITTEDLY THE ASSESS EE DID NOT MAKE ANY CLAIM FOR EXEMPTION. IN SUCH A SITUATION SECTION 14 A COULD HAVE NO APPLICATION.' ITA NO.623/AHD/2012 AGARWAL ROADLINES PVT LTD VS ACIT FOR AY: 2008-09 4 5. WE DO NOT FIND ANY QUESTION OF LAW ARISING, TAX APPEAL IS THEREFORE DISMISSED. THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE AB OVE DECISION OF HONBLE GUJARAT HIGH COURT. WE, THEREFORE, ALLOW T HE APPEAL OF THE ASSESSEE AND DELETE THE DISALLOWANCE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 30/10/2015 BIJU T., PS !&''()(*' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # ( ) / THE CIT(A) 5. &'( ! , ! , / DR, ITAT, AHMEDABAD 6. (- ./ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD