Positive Comsol Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6597/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7594 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJAT JAIN C AS
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 659 7 /DEL/20 13 AY: 200 9 - 10 POSITIVE COMSOL P.LTD. VS. ITO, WARD 14(3) 701, ARUNACHAL BLDG. NEW DELHI 19, BARAKHAMBA ROAD, C.P. NEW DELHI 110 001 PAN: AABCK 4672 L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AKSHAT JAIN & SH.RAJAT JAIN, CAS . RESPONDENT BY : SH. T. JAMES SINGSON, SR. D.R. ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF I NCOME T AX ( A PPEALS) - X VI I, NEW DELHI DATED 24 .10.2013 PERTAINING TO THE ASSESSMENT YEAR (HEREINAFTER REFERRED TO AS THE A.Y.) 200 9 - 10 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT S CASE THE LD.CIT(A) ERRED BOTH IN FACT AND IN LAW IN CONFIRMING ESTIMATED DISALLOWANCE OF EXPENSES OF RS.29,68,654/ - U/S 14A OF THE ACT R.W. RULE 8D MADE BY THE A.O. WITHOUT APPRECIATING THE FACTS THAT THE EXPENSES CLAIMED BY THE APPELLANT WAS INCURRED IN RELATION TO INCOME WHICH WAS INCLUDIBLE IN TOTAL INCOME AND NO EXPENSES WERE INCURRED BY THE APPELLANT IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. ITA 6597/DEL/2013 A.Y. 2009 - 10 M/S POSITIVE COMSOL PVT.LTD., NEW DELHI 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT S CASE THE LD. CIT(A) ERRED BOTH IN FACT AND IN LAW IN HOLDING THAT PREMIUM PAID ON SHARES OVER AND ABOVE PAID UP VALUE OF SHARES SHOULD BE TREATED AS INVESTMENT FOR THE PURPOSE OF DETERMINING ESTIMATED DISALLOWANCE OF EXPENSES U/S 14A BY INVOKING RULE 8D WITHOUT APPRE CIATING THE FACT THAT PREMIUM PAID ON SHARES IS NOT AN ELIGIBLE AMOUNT ON WHICH EXEMPTED DIVIDEND INCOME WILL ACCRUE/ARISE. 3. THE APPELLANT MAY BE ALLOWED TO MODIFY OR ADD ANY OTHER GROUND WHICH MAY BE RELEVANT TO THE APPEAL. 2. WE HAVE HEARD SHRI AKSHAT JAIN, THE LD.COUNSEL FOR THE ASSESSEE AND SHRI T. JAMES SINGSON, LD.SR.D.R. ON BEHALF OF THE REVENUE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF MATERIAL ON RECORD, ORDERS OF LOWER AUTHORITIES, CASE LAWS CITED, WE H OLD AS FOLLOWS. 3. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS NOT EARNED ANY INCOME DURING THE YEAR WHICH IS EXEMPT FROM TAX . HENCE NO DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961 (THE ACT ) CAN BE MADE IN VIEW OF THE FOLLOWING DECISIONS OF THE JURISDICTIONAL HIGH COURT. - CHEMINVEST LTD. VS. CIT (2015) 61 TAXMAN.COM 118 DELHI - JT.INVEST MENTS (P) LTD. VS. CIT (2005) 59 TAXMAN.COM 2 95 DEL 3.1. THEREFORE, WE DELETE THE DISALLOWANCE AND ALLOW THE APPEAL OF THE ASSESSEE . 4. IN THE RESULT THE APP EAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2016. SD/ - SD/ - (H. S. SIDHU) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 26 TH M AY, 2016 *MANGA ITA 6597/DEL/2013 A.Y. 2009 - 10 M/S POSITIVE COMSOL PVT.LTD., NEW DELHI 3 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR