DCIT, New Delhi V. M/s. Jalco Financial Services Pvt. Ltd., New Delhi

ITA 755/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7185 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-755/DEL /2014 (ASSESSMENT YEAR-2009- 10) DCIT, CIRCLE-4(1), NEW DELHI (APPELLANT) VS JALCO FINANCIAL SERVICES PVT.LTD., GROUND FLOOR, KALKAJI, NEW DELHI PAN-AAACJ2791E (RESPONDENT) APPELLANT BY MS. RISHPAL BEDI, SR.DR RESPONDENT BY NONE ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 13.11.2013 OF CIT(A) -VIII, NEW DELHI PERTAINING TO 2009-10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING DISALLOWANCE O F RS.55,42,112/- UNDER SECTION 14A R.W RULE 8D(II) & 8D(III)? 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND I S NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR FORGO ANY GROUND(S) OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE DES PITE THAT FACT THAT NOTICE WAS SENT TO THE ADDRESS GIVEN IN COLUMN NO.10 WHICH HAS COME BACK UNSERVED. THE LD. SR.DR SUBMITTED THAT THE IMPUG NED ORDER SUFFERS FROM THE INFIRMITY AS NEITHER ANY REMAND REPORT HAS BEEN SOU GHT NOR HAS THE CIT(A) VERIFIED THE FACTS AT HIS OWN LEVEL. IN THE FACTS O F THE PRESENT CASE IT WAS HER SUBMISSION THAT MERE STATEMENTS OF THE ASSESSEE WIT HOUT VERIFYING THEIR CORRECTNESS HAVE BEEN BLINDLY ACCEPTED. ACCORDINGL Y, A PRAYER WAS MADE THAT THE IMPUGNED ORDER MAY BE SET ASIDE FOR VERIFICATI ON ON FACTS AND RESTORE THE ISSUE BACK TO THE FILE OF THE AO. DATE OF HEARING 11.01.2016 DATE OF PRONOUNCEMENT 09.02.2016 I.T.A .NO.-755/DEL/2014 PAGE 2 OF 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ASSESSEE IN THE YEA R UNDER CONSIDERATION DECLARED A LOSS OF RS.46,13,98,767/- BY WAY OF FILING ITS RE TURN ON 30.09.2009. THE SAID RETURN WAS PROCESSED U/S 143(1). THEREAFTER, IT WA S SELECTED FOR SCRUTINY. A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSEE WAS S TATED TO BE ENGAGED IN THE BUSINESS OF INVESTMENT AND TRADING IN SHARES. CONS IDERING THE FACT THAT THE ASSESSEE AS PER ITS COMPUTATION OF INCOME HAD SHOWN IT HAD INVESTMENTS FROM SHARES AND INCOME WHICH DID NOT FROM PART OF THE TO TAL INCOME HE WAS REQUIRED TO EXPLAIN WHY DISALLOWANCE U/S 14A R.W. RULE 8D SH OULD BE NOT MADE. CONSIDERING THE EXPLANATION OFFERED AN ADDITION OF RS. 56,35,431/- WAS MADE BY THE AO BY WAY OF DISALLOWANCE. THE ASSESSEE AGITAT ED THE ISSUE IN APPEAL BEFORE THE CIT(A) WHERE APART FROM RELYING UPON THE ORDERS OF THE ITAT. THE ASSESSEE MADE VARIOUS SUBMISSIONS INCLUDING THE FOLLOWING SU BMISSIONS:- THE ASSESSEES AR ARGUED THAT THE SHARES ARE HELD BY APPELLANT AS STOCK IN TRADE. IN SUCH CASE AS PER THE ABOVE ITAT ORDER, NO DISALLOWANCE U./S 14A SHOULD BE MADE WHEN SHARES AR E HELD AS STOCK IN TRADE. IF THE SHARES ARE HELD AS INVESTME NT, THEN DISALLOWANCE U/S 14A IS CALLED FOR AND CAN BE MADE TO THE EXTENT OF ANY EXPENDITURE ATTRIBUTED TO EARNING OF SAID DIVID END INCOME 4. IN THE LIGHT OF THE SUBMISSION OF THE LD. SR. DR AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD WHEREIN WE FIND THAT APART FROM REFERRING TO CERTAIN DECISION OF THE ITAT THE LD. CIT(A) FAILED TO ADDRE SS THE FACTUAL POSITION ON RECORD AND GIVE HIS INDEPENDENT FINDING THEREON AFT ER VERIFYING THE FACTS FROM RECORD NOR HAS HE SOUGHT TO VERIFY THE POSITION FRO M THE AO BY WAY OF OBTAINING A REMAND REPORT. IN VIEW OF THIS PATENT INFIRMITY, WE FIND THAT THE IMPUGNED ORDER DESERVES TO BE SET ASIDE. ACCORDINGLY, CONSI DERING THE SUBMISSIONS OF THE LD.SR. DR THE ISSUE IS RESTORED TO THE FILE OF THE AO AS THE LD. SR.DR HAS CANVASSED THAT VERIFICATION IS TO BE DONE AT THE A SSESSING OFFICERS LEVEL. 4.1. FOR THE REASONS GIVEN HEREINABOVE, THE ISSUE I S RESTORED TO THE FILE OF THE AO WHO IS DIRECTED TO PASS A SPEAKING ORDER IN ACCO RDANCE WITH LAW. NEEDLESS TO SAY THAT A REASONABLE OPPORTUNITY OF BEING HEARD SHOULD BE GRANTED TO THE ASSESSEE. I.T.A .NO.-755/DEL/2014 PAGE 3 OF 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 OF FEBRUARY, 2016. SD/- SD/- (L.P.SAHU) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/02/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTAN T REGISTRAR ITAT NEW DELHI