ITO, Corp Ward 6(3), Chennai V. Sical Iron Ore Terminals Ltd, Chennai

ITA 638/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7799 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Earning of tax free income; Revised return; Rule 8D
• Section: 143(3); 14A

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.638/CHNY/2019 / ASSESSMENT YEAR :2011-12 THE INCOME TAX OFFICER, CORPORATE WARD 6(3), AAYAKAR BHAVAN, NEW BLOCK, 7 TH FLOOR, 121, M. G. ROAD, CHENNAI 600 034. VS. M/S. SICAL IRON ORE TERMINALS LTD., NO. 73, SOUTH INDIA HOUSE, ARMENIAN STREET, CHENNAI 600 001. [PAN:AAKCS5773M] ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT / RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE / DATE OF HEARING : 04.07.2019 /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) 16, CHENNAI DATED 28.12.2018 RELEVANT TO THE ASSESSMENT YEAR 2011-12. THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN RESTRICTING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT R.W. RULE 8D TO THE EXTENT OF EXEMPT INCOME EARNED BY THE ASSESSEE. I.T.A. NO.638/M/19 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 08.09.2011 AND REVISED RETURN ON 05.11.2011 AND 28.08.2012 ADMITTING A LOSS OF .3,09,25,602/-. THE ASSESSING OFFICER COMPLETED SCRUTINY ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DETERMINING THE ASSESSED TOTAL INCOME AT . NIL AFTER MAKING DISALLOWANCE OF .2,42,88,095/- UNDER SECTION 14A OF THE ACT. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FACTS OF THE CASE, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO THE EXTENT THE ASSESSEE EARNED THE EXEMPT INCOME. 3. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. IT WAS THE SUBMISSION OF THE LD. DR THAT THE PROVISION OF SECTION 14A OF THE ACT DOES NOT PERMIT ANY RESTRICTION AND THEREFORE, PLEADED FOR REVERSING THE ORDER PASSED BY THE LD. CIT(A). ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A) BESIDES, PLACING RELIANCE ON THE DECISION IN THE CASE OF JOINT INVESTMENTS PVT. LTD. V. CIT 372 ITR 694 (DELHI). 4. WE HAVE HEARD BOTH THE PARTIES, PERUSE THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE HAS ADMITTED DIVIDEND INCOME OF .93,46,582/-, WHEREAS, THE ASSESSING OFFICER MADE DISALLOWANCE OF .2,42,88,095/- UNDER SECTION 14A I.T.A. NO.638/M/19 3 R.W. RULE 8D. BY CONSIDERING VARIOUS DECISIONS, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO THE EXTENT OF EXEMPTED INCOME EARNED BY THE ASSESSEE. WE HAVE ALSO PERUSED THE CASE LAW PLACED ON RECORD IN THE CASE OF JOINT INVESTMENTS PVT. LTD. V. CIT (SUPRA), WHEREIN, THE HONBLE DELHI HIGH COURT HAS ALSO HELD THAT THE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D SHOULD BE RESTRICTED TO THE EXTENT OF EXEMPT INCOME EARNED. IN VIEW OF THE ABOVE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). ACCORDINGLY, THE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 5. 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.