ARYADOOT TRANSPORT P. LTD, MUMBAI V. DCIT CEN CIR 6(4), MUMBAI

ITA 7078/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0759 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.7078/MUM/2016 : ASST.YEAR 2011-2012 M/S.ARYADOOT TRANSPORT PVT.LTD. UNIT NO.801, GODREJ COLISEUM, C WING OFF SOMAIYA HOSPITAL ROAD, SION MUMBAI 400 022. PAN : AAACA4793K. / VS. THE ASST.COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 39 MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI HITESH TRIVEDI /RESPONDENT BY : SHRI B.SATYANARAYANA RAJU / DATE OF HEARING : 15.05.2017 / DATE OF PRONOUNCEMENT : 15.05.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 28.04.2014 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS.4,05,199/- BEING 0.5% OF AVERAGE INVESTMENT OF RS.8,30,39,847/- WITHOUT APPRECIATING THE FACT THAT IT HAS BEEN HELD IN THE CASE OF M/S.MAGNA PUBLISHING CO.LTD. V. ITO IN ITA NO.5536/MUM/2014 AND ALSO IN THE CASE OF ACIT VS. PUNJAB STATE COOP & MARKETING FED LTD. IN ITA NOS.548/CHD/2011 THAT NO DISALLOWANCES UNDER SECTION 14A OF THE ACT CAN BE MADE WHERE NO EXEMPT INCOME IS EARNED. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMPLIFY, MODIFY, REFRAME OR DELETE ANY OF THE AFORESAID GROUNDS AT OR BEFORE THE HEARING. ITA NO.7078/MUM/2016. M/S.ARYADOOT TRANSPORT PVT.LTD. 2 3. AT THE OUTSET, IN THE CASE THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ASSESSEE HAS NOT EARNED / RECEIVED ANY EXEMPT INCOME DURING THE CONCERNED FINANCIAL YEAR, HENCE THE LEARNED COUNSEL PLEADED THAT NO DISALLOWANCE U/S 14A SHOULD BE DONE. FOR THIS PROPOSITION, THE LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE UPON SEVERAL DECISIONS INCLUDING THAT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. V. CIT [(2015) 378 ITR 33 (DELHI)] AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF REDINGTON (INDIA) LTD. V. ADDL.CIT [(2017) 77 TAXMANN.COM 257 (MADRAS)] . IN THE LIGHT OF THESE CASE LAWS, THE LEARNED COUNSEL PLEADED THAT NO DISALLOWANCE U/S 14A IS PERMISSIBLE. 4. UPON CAREFUL CONSIDERATION, I NOTE THAT THE AUTHORITIES BELOW HAVE RELIED UPON A SPECIAL BENCH CASE OF THE ITAT DELHI BENCH IN THE CASE OF CHEMINVEST LTD. HOWEVER, THE SAME STANDS REVERSED BY THE HONBLE DELHI HIGH COURT. IN THE ABOVE DECISION, THE HONBLE DELHI HIGH COURT AND THE HONBLE MADRAS HIGH COURT HAVE HELD THAT NO DISALLOWANCE U/S 14A IS PERMISSIBLE AS THERE IS NO EXEMPT INCOME EARNED. HOWEVER, I NOTE THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS OBSERVED THAT DIVIDEND INCOME HAS BEEN RECEIVED BY THE ASSESSEE. THIS IS QUITE CONTRARY TO THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE. HENCE IN THE INTEREST OF JUSTICE, I REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL FACTUALLY EXAMINE WHETHER ANY EXEMPT INCOME HAS BEEN EARNED OR NOT. IF ANY EXEMPT INCOME HAVE BEEN EARNED, THEN AS PER THE RATIO EMANATING FROM THE ABOVE HIGH COURT DECISIONS, NO DISALLOWANCE U/S 14A NEEDS TO BE DONE. ITA NO.7078/MUM/2016. M/S.ARYADOOT TRANSPORT PVT.LTD. 3 5. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 15 TH DAY OF MAY, 2017. SD/- ( SHAMIM YAHYA ) / ACCOUNTANT MEMBER MUMBAI; DATED : 15 TH MAY, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A)-54, MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.