ANJANEYA COLD STORAGE PRIVATE LIMITED, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 1(1)(1), MUMBAI

ITA 7085/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0864 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALDLD
• Assessee Lawyers: APURVA R SHAH LD
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A

Judgement Text

1 ITA NO.7085/MUM/2018 M/S. ANJANEYA COLD STORAGE PRIVATE LIMITED ASSESSMENT YEAR-2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.7085/MUM/2018 ( / ASSESSMENT YEAR: 2014-15) M/S. ANJANEYA COLD STORAGE PVT . LTD. ALLANA HOUSE, ALLANA ROAD, COLABA, MUMBAI-400 001. / VS. D CIT - CENTRAL CIRCLE - 1(1)(1) AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ./ ./PAN/GIR NO. AAACA-0597-R ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI APURVA R. SHAH- LD.AR / RESPONDENT BY : SHRI S. MICHAEL JERALD - LD. DR / DATE OF HEARING : 19/12/2019 / DATE OF PRONOUNCEMENT : 19/12/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME-TAX (APPEALS)-2, MUMBAI [IN SHORT REFERRED TO AS CIT(A )], APPEAL NO.CIT(A)- 2 ITA NO.7085/MUM/2018 M/S. ANJANEYA COLD STORAGE PRIVATE LIMITED ASSESSMENT YEAR-2014-15 2/IT-10255/2017-18 ORDER DATED 18/09/2018 ON FOLLOWING SOLE GROUND OF APPEAL: - THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, MUMBAI ERRED IN NOT ADJUDICATING THAT NO DISALLOWANCE U/S. 14A OUGHT TO BE DONE ON THOSE INV ESTMENTS THAT HAVE NOT YIELDED ANY INCOME DURING THE YEAR. AS EVIDENT FROM GROUNDS OF APPEAL, THE SOLE ISSUE I NVOLVED IN THE APPEAL IS DISALLOWANCE U/S14A. 2. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE ( AR), AT THE OUTSET, RELYING UPON THE ORDER OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR AY 2013- 14, ITA NO.924/MUM/2018 COMMON ORDER DATED 01/03/20 19, PLEADED THAT NO DISALLOWANCE SHOULD BE MADE AGAINST THOSE INVEST MENTS WHICH DID NOT YIELD ANY EXEMPT INCOME DURING THE YEAR. THE COPY O F THE ORDER HAS BEEN PLACED ON RECORD. THE LD. DR SUBMITTED THAT THE DIS ALLOWANCE WAS TO BE COMPUTED ON ALL INVESTMENTS IRRESPECTIVE OF THE FAC T WHETHER THE SAME YIELDED ANY EXEMPT INCOME OR NOT. WE HAVE DULY CONS IDERED THE RIVAL SUBMISSIONS AND THE CITED ORDER OF TRIBUNAL IN ASSE SSEES OWN CASE. 3. FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE B EING RESIDENT CORPORATE ASSESSEE WAS ASSESSED FOR YEAR UNDER CONS IDERATION U/S 143(3) ON 24/11/2017 WHEREIN THE ASSESSEE WAS SADDLED WITH DISALLOWANCE U/S 14A FOR RS.13.45 LACS IN VIEW OF THE FACT THAT IT E ARNED EXEMPT DIVIDEND INCOME OF RS.9.93 LACS. AGAINST THE SAME, THE ASSES SEE HAD OFFERED SUO- MOTO DISALLOWANCE OF RS.2,654/- IN ITS COMPUTATION OF INCOME. HOWEVER, NOT SATISFIED WITH ASSESSEES WORKING, LD.AO, INVOKING RULE 8D, COMPUTED EXPENSE DISALLOWANCE U/R 8D(2)(III) FOR RS.13.47 LA CS, BEING 0.5% OF 3 ITA NO.7085/MUM/2018 M/S. ANJANEYA COLD STORAGE PRIVATE LIMITED ASSESSMENT YEAR-2014-15 AVERAGE INVESTMENTS HELD BY THE ASSESSEE DURING THE YEAR. AFTER ADJUSTING SUO-MOTO DISALLOWANCE OFFERED BY THE ASSESSEE, NET DISALLOWANCE THUS WORKED OUT TO BE RS.13.45 LACS WHICH WAS ADDED TO T HE INCOME OF THE ASSESSEE. UPON FURTHER APPEAL, LD. FIRST APPELLATE AUTHORITY, DIRECTED LD. AO RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS.9.93 LACS I.E. EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE YEAR. STILL AGGRI EVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. UPON DUE CONSIDERATION, WE FIND THAT THE COORDIN ATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2013-14, HAS DIRECTED LD. AO TO COMPUTE DISALLOWANCE VIS--VIS ONLY THOSE INVESTMEN TS WHICH YIELDED EXEMPT INCOME DURING THE YEAR. RELIANCE WAS PLACED THE DECISION OF DELHI TRIBUNAL (SPECIAL BENCH) RENDERED IN ACIT VS. VIREET INVESTMENT (P.) LTD. [82 TAXMANN.COM 415] FOR THE SAID CONCLUSIONS. FACTS BEING PARI-MATERIA THE SAME, RESPECTFULLY FOLLOWING THE SAME, WE ISSUE SIMILAR DIRECTIONS TO LD.AO. 5. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER,2019. /- SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 19/12/2019 SR.PS:-JAISY VARGHESE 4 ITA NO.7085/MUM/2018 M/S. ANJANEYA COLD STORAGE PRIVATE LIMITED ASSESSMENT YEAR-2014-15 / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 3. $ ( ) / THE CIT(A) 4. $ / CIT CONCERNED 5. %& ''( , ( , / DR, ITAT, MUMBAI 6. &*+, / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.