DCIT, New Delhi V. M/s. Sunstar Overseas Ltd., New Delhi

ITA 6650/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3935 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 08-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.6650/DEL/2014 ASSESSMENT YEAR:2010-11 DCIT CIRCLE 24(2) NEW DELHI V. M/S SUNSTAR OVERSEAS LTD. 4119/7, 1 ST FLOOR, NAYA BAZAR DELHI TAN/PAN:AAACS9693J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KAUSHLENDRA TIWARI, D.R. RESPONDENT BY: NONE DATE OF HEARING: 24 10 2017 DATE OF PRONOUNCEMENT: 24 10 2017 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST IMPUGNED ORDER DATED 19/9/2014, PASSED BY THE LD. CIT (APPEALS)-XII, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEAR 2010-11. THE SOLE GROUND RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL IS AS UNDER:- 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS IN DELETING THIS ALLOWANCES OF RS.52,16,685/- MADE BY THE ASSESSING OFFICER UNDER SECTION 14A R/W RULE 8D OF THE I.T. RULES. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE, THEREFORE, WE ARE PROCEEDING TO DECIDE THE MATTER ON MERITS AFTER HEARING THE LD. D.R. 2 3. THE SOLE ISSUE RAISED IN THIS APPEAL BY THE REVENUE RELATES TO THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF RS.52,16,685/-. 4. AT THE OUTSET, IT IS NOTICED THAT DIVIDEND INCOME WHICH HAS BEEN CLAIMED AS EXEMPT IS ONLY RS.11,444/- AND AS AGAINST THIS, DISALLOWANCE UNDER SECTION 14A HAS BEEN MADE AT RS.52,16,685/- WHICH CONSTITUTE DISALLOWANCE OF INTEREST UNDER RULE 8D(2)(II) OF RS.48,57,136/- AND INDIRECT EXPENDITURE OF RS.3,59,549/- UNDER RULE 8D(2)(III). 5. THE LD. CIT(A), HAS DIRECTED THE ASSESSING OFFICER TO RE- WORK THE DISALLOWANCE UNDER SECTION 14A KEEPING IN VIEW THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT REPORTED IN [2011] 64 DTR (DEL) 122. 6. SINCE EXEMPT INCOME IS ONLY RS.11,444/-, THEREFORE, IN VIEW OF THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS. CIT REPORTED IN [2015] 378 ITR 33 (DEL), WE HOLD THAT DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME AND ACCORDINGLY, DISALLOWANCE IS RESTRICTED TO RS.11,444/- AND THE BALANCE IS DIRECTED TO BE DELETED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH OCTOBER, 2017. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24 TH OCTOBER, 2017 JJ:2510 3 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR DATE 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.