Pola Venkataramaiah & Sons, Kurnool V. Income Tax Officer, Ward-1, Adoni

ITA 724/Hyd/2019

• Counselvise Citation: [2019] 113 COUNSELVISE.COM (IT) 6414 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 14-11-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E N HANGHAL
• Assessee Lawyers: A C GANGAIAH
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

ITA NO 724 OF 2019 POLA VE NKATARAMAIAH AND SONS KURNOOL. PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.724/HYD/2019 ASSESSMENT YEAR: 2014-15 POLA VENKATARAMAIAH & SONS, KURNOOL PAN:AABFP7281R VS. INCOME TAX OFFICER WARD-1, ADONI (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.C. GANGAIAH REVENUE BY : SMT. E.N. HANGHAL, DR DATE OF HEARING: 14/11/2019 DATE OF PRONOUNCEMENT: 21/11/2019 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2014-15 AGAIN ST THE ORDER OF THE CIT (A)-KURNOOL, DATED 05.03.2019. 2. IN THIS APPEAL, THE ASSESSEE IS CHALLENGING THE DISALLOWANCE MADE U/S 14A OF THE ACT. THE ASSESSEE HAS ALSO FILE D ADDITIONAL GROUND OF APPEAL STATING THAT WHERE THE ASSESSEE HAS NOT E ARNED ANY EXEMPT INCOME DURING THE RELEVANT FINANCIAL YEAR, THEN THE AO COULD NOT HAVE INVOKED THE PROVISIONS OF SECTION 14A OF THE ACT. A N APPLICATION FOR THE ADMISSION OF THIS GROUND IS ALSO FILED BEFORE THE T RIBUNAL. TAKING THE SAME INTO CONSIDERATION, I AM INCLINED TO ADMIT THE SAME BECAUSE IT IS A LEGAL GROUND AND ALL THE RELEVANT FACTS ARE ON RECO RD. 3. I FIND THAT THE AO HAS ONLY CONSIDERED THAT THE ASSESSEE HAS MADE INVESTMENTS IN SHARES OF COMPANIES AND OBSERVI NG THAT THE INCOME THERE FROM IS EXEMPT FROM TAX, HE HAS MADE D ISALLOWANCE U/S 14A R.W. RULE 8D OF THE I.T. RULES. THE CIT (A) HAS ALSO CONFIRMED THE ITA NO 724 OF 2019 POLA VE NKATARAMAIAH AND SONS KURNOOL. PAGE 2 OF 2 ORDER OF THE AO. SINCE I HAVE ADMITTED THE ADDITION AL GROUND OF APPEAL RAISED BY THE ASSESSEE, I DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE IF T HE ASSESSEE HAS EARNED ANY EXEMPT INCOME DURING THE RELEVANT A.Y AND IF NO SUCH INCOME HAS BEEN EARNED, THEN NO DISALLOWANCE U/S 14A SHALL BE MADE AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINV EST LTD VS. CIT IN ITA 749/2014, DATED 2 ND SEPTEMBER, 2015. IF THE ASSESSEE HAS EARNED SOME EXEMPT INCOME, THEN THE DISALLOWANCE SHALL BE RESTRICTED TO SUCH EXEMPT INCOME EARNED BY THE ASSESSEE. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2019. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 21 ST NOVEMBER, 2019. VINODAN/SPS COPY TO: 1 M/S. POLA VENKATARAMAIAH & SONS, 18/670 GOSHA HOS PITAL ROAD, ADONI, KURNOOL 518301, A.P 2 ITO WARD-1 ADONI, KURNOOL A.P 3 CIT (A)-KURNOOL 4 PR. CIT - KURNOOL 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER