Abhinav Pictures (P) Ltd., Indore V. ITO-1(1), Indore

ITA 772/Ind/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9024 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 31-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

SMC - I.T.A. NO.772 OF 2019 SHRI ABHINAV PICTURS 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.772/IND/2019 ABHINAV PICTURES P. LTD., INDORE / VS. ITO-1(1), INDORE (APPELLANT) (REVENUE ) P.A. N. AABCA 6829 R APPELLANT BY WRITTEN SUBMISSION REVENUE BY SHRI R.P. MAURYA, SR. DR DATE OF HEARING: 14.10.2020 DATE OF PRONOUNCEMENT: 23 .11.2020 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), INDORE DATED 22.5.2019 CHALLENGING THE CONFIRMATION OF THE DISALLOWANCE OF RS.4,33,106/- MADE U/.S 14A OF THE INCOME TAX ACT. 2. FACTS, IN BRIEF, ARE THAT THE AO NOTED THAT THE ASSESSEES BALANCE-SHEET REFLECTED INVESTMENT OF RS.79 LACS IN SHARE AND INCOME SMC - I.T.A. NO.772 OF 2019 SHRI ABHINAV PICTURS 2 ARISING THEREFROM IS NOT TAKING PART OF THE TOTAL I NCOME. THE ASSESSEE WAS ASKED TO JUSTIFY INTEREST EXPENSES RELATABLE TO EXEMPT INCOME U/S 14A AND ALSO TO EXPLAIN APPLICABILITY OF SECTION 14 A R.W.R. 8D. IN RESPONSE, THE ASSESSEE FILED WRITTEN REPLY SUBMITTI NG THAT IT HAS NEVER RECEIVED ANY DIVIDEND ON INVESTMENT MADE BY IT AND NO EXPENSES WERE ATTRIBUTED TO THE MAKING AND MAINTAINING THESE INVESTMENTS. HOWEVER, THE AO DID NOT AGREE WITH THE SUBMISSION O F THE ASSESSEE AND MADE AN ADDITION OF RS.4,33,106/- ON ACCOUNT OF DISALLOWANCE U/S 14A R.W.R 8D. 3. BEING AGGRIEVED, THE ASSESSEE FILED WRITTEN SYN OPSIS WHEREIN IT IS CONTENDED THAT THE INVESTMENT MADE BY THE ASSESSEE IS PASSIVE INVESTMENT FOR WHICH THE ASSESSEE IS NOT REQUIRED T O INCUR ANY EXPENDITURE. FURTHER, THE INVESTMENTS WERE MADE IN F.Y. 2007-08, 2008-09 & 2009-10 AND THE LOAN ON WHICH INTEREST WA S PAID WAS RAISED IN F.Y. 2010-11. THUS, THERE WAS NO NEXUS BE TWEEN INTEREST FUND AND INVESTMENT, THEREFORE, NO DISALLOWANCE ON ACCOUNT OF INTEREST WAS REQUIRED TO BE MADE. THE ASSESSEE FURTHER REITE RATED THE SUBMISSION AS MADE IN THE WRITTEN SYNOPSIS AND PLAC ED RELIANCE ON THE ORDER OF THIS BENCH PASSED IN CASE OF RAVI SEED S & RESEARCH P. SMC - I.T.A. NO.772 OF 2019 SHRI ABHINAV PICTURS 3 LTD. (I.T.A. NO.976 & 978/IND/2016, ORDER DATED 18. 7.2018) CLAIMING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE . 4. ON THE CONTRARY LD. DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE LD. CIT(A) BUT COULD NOT CONT ROVERT THE SUBMISSION OF THE ASSESSEE BY BRINGING ANY CONTRARY MATERIAL ON RECORD. 5. I HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT THIS ISSUE HAS ALREADY BEEN DEALT WITH BY THIS BENCH IN CASE OF RAVI SEEDS & RESEARCH P. LTD. (I.T.A. NO.976 & 9 78/IND/2016, ORDER DATED 18.7.2018) WHEREIN THIS BENCH, FOLLOWIN G THE RATIO LAID DOWN IN THE CASE OF CHEMINVEST VS. CIT (2015) 61 TA XMANN.COM 118 (DEL) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE COPY OF THE SAME IS FILED IN THE PAPER BOOK FROM PAGE NOS.41 TO 50. I, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE DELH I HIGH COURT PASSED IN CASE OF CHEMINVEST VS. CIT (2015) 61 TAXMANN.COM 118 (DEL) HOLD THAT THE REVENUE AUTHORITIES WERE NOT JUSTIFIED IN MAKING/CONFIRMING THE DISALLOWANCE MADE U/S 14A R.W.R. 8D OF THE INCO ME TAX ACT. SMC - I.T.A. NO.772 OF 2019 SHRI ABHINAV PICTURS 4 6. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23 .11. 2020. SD/- (KUL BHARAT) JUDICIAL MEMBER INDORE; DATED : 23/11/2020 VYAS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE