DCIT, New Delhi V. M/s. Minda Investment Ltd., Delhi

ITA 6350/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97661 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K KAPOOR
• Assessee Lawyers: P DAM KANUNJNA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.INTURI RAMA RAO, ACCOUNTANT MEMBER I.T.A .NO. - 6350 /DEL/201 3 (ASSESSMENT YEAR - 2000 - 11 ) DCIT, CIRCLE - 6(1), ROOM NO.0413, C.R.BUILDING, I.P.ESTATE, NEW DELHI ( APPELLANT) VS MINDA INVESTMENT LTD., B - 64/1, WAZIRPUR INDUSTRIAL AREA, DELHI - 110052. PAN - AAACL1433F (RESPONDENT ) APPELLANT BY SH. R.K.KAPOOR, CA RESPONDENT BY SH.P.DAM.KANUNJNA, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE REVENUE ASSAILING THE CORRECTNESS OF THE ORDER DATED 23.09.2013 OF CIT(A) - IX, NEW DELHI PERTAINING TO 2010 - 11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS ERRED IN RECOMPUTING THE DISALLOWANCE U/S 14A WITHOUT APPRECIATING THE PROVISION OF RULE 8D? 1.1 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS ERRED IN REDUCING INTEREST ON TERM LOAN OF RS.1,41,56,376/ - AND INTEREST INCOME OF RS.33,37,053/ - FROM THE TOTAL INTEREST PAID OF RS. 3,72,93,705/ - FOR COMPUTATION OF DISALLOWANCE U/S 14A? 1.2 WHETHER ON THE FACTS AND CIRCUMS TANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN REDUCING INTEREST INCOME OF RS. 33,37,053/ - FROM THE TOTAL INTEREST PAID OF RS.3,72,93,705/ - FOR COMPUTATION OF DISALLOWANCE U/S 14A WITHOUT APPRECIATING THE PROVISION OF RULE 80 AS THERE IS NO CONCEPT O F NET INCOME FOR COMPUTING DISALLOWANCE U/S 14A READ WITH RULE 8D? DATE OF HEARING 01 . 1 0.2015 DATE OF PRONOUNCEMENT 16 . 1 0 .2015 I.T.A .NO. - 6350/ DEL/20 13 PAGE 2 OF 4 1.3 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN REDUCING INTEREST ON TERM LOAN OF RS. 1,41,56,376/ - FROM THE TOTAL INTEREST PAID OF RS.3,72,93,7 05/ - FOR COMPUTATION OF DISALLOWANCE U/S 14A ENTIRELY ON THE BASIS OF THE CONTENTION OF THE ASSESS THAT THE ABOVE TERM LOAN HAS BEEN TAKEN FOR RENOVATION OF BUILDING ETC. COMPLETELY IGNORING THE FACT THAT THE ASSESSEE FAILED TO FURNISH AN SUPPORTING EVIDEN CE REGARDING THE ABOVE CLAIM BEFORE THE ASSESSING OFFICER IF THE ASSESSEE HAS SUBMITTED THE EVIDENCE BEFORE THE LD. CIT(A) THEN THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE WITHOUT PROVIDING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN VIOLATION OF RULE 46A? 1.4 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) ERRED IN REDUCING THE INVESTMENT AS ON 31.03.2010 BY RS. 15,40,61,338/ - FOR THE COMPUTATION OF DISALLOWANCE U/S 14A READ WITH RULE 80 ON THE GROUND THAT THE ASSES SEE HAS INVESTED THE ABOVE AMOUNT FROM ITS FUNDS WITHOUT APPRECIATING THE FACT THAT THERE IS NO SUCH DISTINCTION BETWEEN THE ASSETS ACQUIRED OUT OF BORROWING FUNDS AND ASSETS ACQUIRED OUT OF OWN FUND IN THE PROVISION OF RULE 8D? 1.5 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN REDUCING THE INVESTMENT AS ON 31.03.2009 BY RS.2,97,40,478/ - WITHOUT ASSIGNING ANY REASON? 2. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT T HE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR FORGO ANY GROUND (S) OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. (EMPHASIS PROVIDED) 2. ADDRESSING THE GRIEVANCE POSED IN GROUND NO.1.3 THE LD. AR STATED THAT HE WOULD NOT BE IN A POSITION TO ADDRESS THE ISSUE WHETHER ANY FRESH EVIDENCE WAS FILED BEFORE THE CIT(A) OR NOT . ADDRESSING THE ISSUES RAISED IN THE PRESENT APPEAL AND INVITING ATTENTION TO THE MANNER IN WHICH THE GROUND HAS BEEN WORDED BY USING WORDS LIKE IFS & BUTS . IT WAS SUBMITTED THAT SINCE THESE APPEAR TO BE AN ASSERTION THAT SOME STATEMENT WAS MADE WHICH WAS ACCEPTED BY THE CIT(A). IN THESE CIRCUMSTANCES IT WAS HIS SUBMISSION T H A T HE WOULD HAVE NO OBJE CTION IF THE ISSUE IS RESTORED TO THE FILE TO THE AO BY ALLOWING THE DEPARTMENTAL GROUNDS WHEREIN THE ASSESSEE RELIES ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF JOINT INVESTMENT PVT. LTD. VS CIT 2015 - TIOL - 574 - HC - DEL - IT WHEREIN THE DECI SION OF THE SPECIAL BENCH IN THE CASE I.T.A .NO. - 6350/ DEL/20 13 PAGE 3 OF 4 CHEM INVESTMENT LTD. HAS BEEN OVER - RULED AS PER TAXSUTRA 504 - HC - 2015. IT WAS HIS SUBMISSION THAT THUS THE AO MAY THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW. MR. P. DAM. KANUNJNA, SR. DR IN THE CIRCUMSTANCES WH ERE THE DEPARTMENTAL GROUNDS WERE TO BE ALLOWED, HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE AO DIRECTING HIM TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ASSESSEE DECLARED A TAXABLE INCOME OF RS. 2,34,08,293/ - INCLUDING LONG TERM CAPITAL GAIN OF RS.1,21,24,809/ - THE SAID RETURN WAS PROCESSED U/S 143(1) AND SELECTED FOR SCRUTINY AFTER ISSUANCE OF NOTICE U/S 143(2) ETC. THE ASSESSEE HAD DECLARED THAT DIVIDEND OF RS.4 3,10,502/ - HAD BEEN EARNED AND I T WAS CLAIMED AS EXEMPT U/S 10(34). A DISALLOWANCE OF RS.8,08,585/ - U/S 14A OF THE INCOME TAX ACT, 1961 WAS MADE SUOMOTO BY THE ASSESSEE AND ADDED BACK TO ITS INCOME . HOWEVER THE WORKING THEREOF WAS NOT GIVEN. NOT SATISFIED WITH THE CORRECTNESS OF THE SAME, THE AO FOLLOWING THE CASE OF C H EMINVEST LTD. VS ITO [2009] 317 ITR (AT) 86 (DELHI SP ECIAL BENCH) MADE A DISALLOWANCE U/S 14A AS PER RULE 8D AMOUNTING TO RS.2,42, ,25,663/ - . IN APPEAL , THE DISALLOWANCE WAS SUBSTANTIALLY REDUCED TO RS.87,65,371/ - AND RELIEF TO THE EXTENT OF RS. 1,54,60,292/ - WAS GRANTED. THE REASONING AND FINDING QUA THIS RELIEF IS ASSAILED BY THE REVENUE IN THE PRESENT PROCEEDINGS. IN VIEW OF TH E ABOVE IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH WHERE DEPARTMENT AS PER ITS GROUNDS STATES THAT THE ASSESSEE S CONTENTION THAT THE TERM LOAN HAD BEEN TAKEN FOR RENOVATION FOR BUILDING HAD BEEN ACCEPTED WITHOUT ANY EVIDENCE AND THE L D.AR WAS UNABLE TO STATE WHE THER ANY FRESH EVIDENCES WERE FILED HAS STATED THAT HE HAS NO OBJECTION IF THE ISSUE IS RE - LOOKED INTO AGAIN O N THE BASIS OF THE DECISION ON THE ISSUE A N D ON FACTS WHICH THE AO CAN CONSIDER. THE SAID REQUEST WAS NOT OBJECTED TO BY THE LD. SR. DR. IN VIEW OF THE AFORE - SAID PECULIAR FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES ON FACTS AS CANVASSED, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE AO WITH THE DIRECTION TO RE - EXAMINE THE ISS UE DENOVO AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE AND REASONABLE OPPORTUNITY OF BEING HEARD. I.T.A .NO. - 6350/ DEL/20 13 PAGE 4 OF 4 4 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 6 T H OF OCTOBER , 2015. S D / - S D / - (INTURI RAMA RAO) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 6 /10 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI