Maruti Insurance Distribution Service Ltd., New Delhi V. DCIT, CIRCLE- 16(1), New Delhi

ITA 7315/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9548 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ROHIT JAIN ADV MS SONIYA JAIN
• Keywords: Rule 8D
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.7315/DEL/2017 (ASSESSMENT YEAR 2013-14) M/S. MARUTI INSURANCE DISTRIBUTION SERVICES LTD. [THROUGH ITS SUCCESSOR-IN- INTEREST M/S. MARUTI SUZUKI INDIA LIMITED] PLOT NO.1, NELSON MANDELA ROAD, VASANT KUNJ, NEW DELHI-110 070. PAN AADCM 3497P VS. DY. CIT, CIRCLE-16(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. ROHIT JAIN, ADV. MS. SONIYA JAIN, CA. RESPONDENT BY MS. RAKHI VIMAL, SR. DR DATE OF HEARING 04.01.2021 DATE OF PRONOUNCEMENT 04.01.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST OR DER DATED 22.09.2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-37, NEW DELHI {CIT(A)} FOR ASSESSMEN T YEAR 2013-14. 2 ITA NO.7315/DEL/2017 M/S MARUTI INSURANCE DISTRIBUTION SERVIC ES LTD. VS. DCIT THE ONLY ISSUE UNDER CHALLENGE IS THE UPHOLDING OF THE DISALLOWANCE OF RS.8,28,036/- U/S 14A OF THE INCOME TAX ACT, 196 1 (HEREINAFTER CALLED THE ACT). 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY IS A 100% OWNED SUBSIDIARY COMPANY OF M/S MARUIT SUZ UKI INDIA LIMITED (FORMERLY KNOWN AS MARUTI UDYOG LIMITED). I T HAS TIED UP WITH NEW INDIA ASSURANCE COMPANY LTD. AS ITS LICENSED CORPORATE INSURANCE AGENT FOR VEHICLE INSURANCE. THE RETURN F OR THE YEAR UNDER CONSIDERATION WAS FILED DECLARING A LOSS OF RS .11,20,235/- AND AS PER THE PROVISIONS OF SECTION 115JB OF THE A CT, THE BOOK PROFIT WAS CALCULATED AT RS.1,34,53,447/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED AT A L OSS OF RS.2,92,199/- AFTER MAKING A DISALLOWANCE OF RS.8,2 8,036/- IN TERMS OF RULE-8D OF THE INCOME TAX RULES, 1962 R.W.S 14A OF THE ACT. 3.0 THE ASSESSEES APPEAL BEFORE THE LD. CIT(A) WAS DISMISSED AND NOW THE ASSESSEE IS BEFORE THIS TRIBUNAL CHALLEN GING THE UPHOLDING OF THE IMPUGNED DISALLOWANCE. 3 ITA NO.7315/DEL/2017 M/S MARUTI INSURANCE DISTRIBUTION SERVIC ES LTD. VS. DCIT 4.0 THE LD. AUTHORIZED REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSING OFFICER HAD MADE THE IMPUGNED DISALLO WANCE IN TERMS OF PROVISION OF RULE 8D(2) (III), WHICH WAS INCORREC T BECAUSE THERE WAS NO OPENING AND CLOSING BALANCE OF INVESTMENTS IN THE ASSESSEES BOOKS ON THE FIRST DAY AND THE LAST DAY OF THE YEAR UNDER CONSIDERATION. IT WAS SUBMITTED THAT IF THE AVERAGE VALUE OF ASSETS WAS NIL, THE DISALLOWANCE WOULD ALSO BE NIL. IT WAS AL SO SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AN INCORRECT AS SERTION IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD MADE A SUO MOTU DISALLOWANCE OF RS.67,853/- (BEING THE DIVIDEND EARN ED DURING THE INCOME) IN TERMS OF SECTION 14A OF THE ACT. IN THE ALTERNATIVE, THE LD. AUTHORIZED REPRESENTATIVE PLEADED THAT THE DISA LLOWANCE MAY BE RESTRICTED TO THE DIVIDEND EARNED DURING THE YEAR I .E., RS.67, 853/-. 5.0 PER CONTRA, THE LD. SR. DEPARTMENTAL REPRESENT ATIVE (DR) SUBMITTED THAT THE DISALLOWANCE HAD BEEN CORRECTLY C ALCULATED. SHE PLACED RELIANCE ON THE ORDERS OF BOTH THE LOWER AUT HORITIES. 6.0 HAVING HEARD THE RIVAL SUBMISSIONS AND AFTER H AVING GONE THROUGH THE RECORDS, WE NOTE THAT THE ASSESSING OFF ICER HAS 4 ITA NO.7315/DEL/2017 M/S MARUTI INSURANCE DISTRIBUTION SERVIC ES LTD. VS. DCIT MENTIONED SPECIFICALLY IN PARA 3.3 OF THE ASSESSMEN T ORDER THAT THE ASSESSEE HAS SUO MOTU DISALLOWED AN AMOUNT OF RS.67,853/- AS DISALLOWANCE U/S 14A OF THE ACT. ALTHOUGH, THE LD. A UTHORIZED REPRESENTATIVE HAS ARGUED THAT NO SUCH SUO MOTU DISALLOWANCE WAS MADE BY THE ASSESSEE IN ITS COMPUTATION OF INCOME, FOR WANT OF EVIDENCES WE CANNOT LOOK INTO THE ISSUE AT THIS JUN CTURE. CONSIDERING THE SMALLNESS OF THE AMOUNT AND ALSO TH E ALTERNATE PLEA OF THE LD. AUTHORIZED REPRESENTATIVE ON OVERAL L FACTS OF THE CASE, WE DIRECT THAT THE DISALLOWANCE BE RESTRICTED TO RS.67,853/- I.E. THE AMOUNT OF DIVIDEND EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 7.0 IN THE FINAL RESULT, THE APPEAL OF T HE ASSESSEE STANDS PARTLY ALLOWED. ABOVE DECISION WAS ANNOUNCED ON CONCLUSION OF VIRTUAL HEARING ON 4 TH JANUARY, 2021. SD/- SD/- (N.K. BILLAIYA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/01/2021 PK/PS 5 ITA NO.7315/DEL/2017 M/S MARUTI INSURANCE DISTRIBUTION SERVIC ES LTD. VS. DCIT COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI