M/s. Tirupati Cylinders Ltd., New Delhi V. ACIT, New Delhi

ITA 6528/DEL/2014

• Counselvise Citation: 652820114 RSA 2014
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 02-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: AMIT GOEL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO: 6528/DEL/2014 ASSTT. YEAR : - 2010-11 TIRUPATI CYLINDERS LTD. VS. ACIT D-14, 2 ND FLOOR, CIRCLE 16-1, PREET VIHAR NEW DELHI. NEW DELHI 110 092 (PAN AAACT4801H) (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI AMIT GOEL, CA RESPONDENT BY :SHRI MANOJ KUMAR CHOPRA, SR. DR DATE OF HEARING :14.7.2015 DATE OF PRONOUNCEMENT : 17 .7.2015 O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIR ECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 7.8.201 4 FOR THE ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION O F RS. 2,18,833/- MADE BY ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE U/S 14 A OF INCOME TAX ACT, 1961. 2. WE HAVE HEARD SHRI MANOJ KUMAR CHOPRA, S R. DR ON BEHALF OF THE REVENUE AND SHRI AMIT GOEL ON BEHALF OF THE ASSESSEE. 3. ON A CAREFUL CONSIDERATION OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF T HE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- ITA NO. 6528/DEL/2014 TIRUPATI CYLINDE RS LTD. VS. ACIT 2 4. LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THA T THE INVESTMENTS IN QUESTION WERE MADE BEFORE 31 ST MARCH, 2008. AT PAGE 13 OF THE ASSESSEES PAPER BO OK, THE BALANCE SHEET AS ON 31.3.2008 IS ENCLOSED. THE SHARE HOLDER FUNDS ARE 6.90 CRORES AND WHEREAS THE INVESTMENTS ARE RS. 31.80 LA CS. 5. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HDFC BANK LTD. REPORTED IN 2014 49 TAXMAN.COM 335 BOMBAY APPLIED THE RATIO OF THE DECISIONS OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIE S & POWER LTD. 313 ITR 340 AND HELD AS FOLLOWS : SECTION 14A OF THE INCOME-TAX ACT, 1961 EXPENDIT URE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME (DIVIDENDS )-ASSESSMENT YEARS 2001- 02 TO 2005-06 - WHETHER WHERE ASSESSEES OWN FUNDS AND OTHER NON INTEREST BEARING FUNDS WERE MORE THAN INVESTMENT IN TAX FREE SECURITIES, IMPUGNED ORDER PASSED BY ASSESSING OFFICER DISALLOWING A PAR T OF INTEREST PAYMENTS UNDER SECTION 14A, WAS TO BE SET ASIDE- HELD, YES ( PARA 5) (IN FAVOUR OF ASSESSEE) 6. HONBLE DELHI HIGH COURT IN THE CASE OF CI T VS. ORIENTAL STRUCTURAL ENGINEERS (P.) LTD. (2013) 35 TAXMANN.COM 210(DELHI) HELD AS FOLLOWS :- SECTION 14A OF THE INCOME-TAX ACT, 1961 EXPENDIT URE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME (INTEREST) ASSESSMENT YEAR 2008-09 COMMISSIONER (APPEALS) FOUND THAT ONLY A PART OF IN TEREST WAS PAID ON FUNDS THAT WAS UTILIZED FOR MAKING INVESTMENTS ON WHICH EXEMPT ED INCOME WAS RECEIVABLE, WHILE MAJOR INVESTMENT WAS MADE IN SUBSIDIARY COMPA NY TO FORM SPECIAL PURPOSE VEHICLE TO OBTAIN NHAI CONTRACT- FURTHER, TRIBUNAL HELD THAT EXPENSES WHICH HAD BEEN CLAIMED BY ASSESSEE WERE NOT TOWARDS EXEMPTED INCOME WHETHER IN VIEW OF FACTUAL FINDING RECORDED BY TRIBUNAL, DISALLOWAN CE WAS TO BE LIMITED HELD, YES (PARA 3) (IN FAVOUR OF ASSESSEE) 7. APPLYING THE PROPOSITION LAID DOWN THEREIN TO THE FACTS OF THE CASE WE DELETE THE DISALLOWANCE OF INTEREST MADE U/S 14A FOR THE A SSTT. YEAR 2010-11. AS FAR AS THE DISALLOWANCE REGARDING OTHER EXPENSES ARE CONCERNED , WE UPHOLD THE ORDER OF THE ITA NO. 6528/DEL/2014 TIRUPATI CYLINDE RS LTD. VS. ACIT 3 FIRST APPELLATE AUTHORITY AND DISMISS THIS GROUND O F THE ASSESSEE. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS A LLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 TH JULY, 2015. SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 17 TH JULY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 14.7.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 14.7.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER