Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 6820 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-07-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2013-2014
Appeal Filed On
15-04-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NOS.786 & 787/BANG/2019 ASSESSMENT YEARS : 2013-14 & 2014-15 THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-2(1)(1), BENGALURU. VS. M/S DECCAN MINING SYNDICATE PVT. LTD., S-7, NO.26, 2 ND FLOOR, ESTEEM ARCADE, RACE COURSE ROAD, BENGALURU-560 001. PAN AAACD 7081 R APPELLANT RESPONDENT AND CO NOS.46 & 47/BANG/2017 ASSESSMENT YEARS : 2013-14 & 2014-15 (BY ASSESSEE) REVENUE BY : SHRI R.N SIDDAPPAJI, ADDL. CIT ASSESSEE BY : SMT. SUMAN LUNKAR, CA DATE OF HEARING : 22.07.2019 DATE OF PRONOUNCEMENT : 26.07.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE APPEALS OF THE REVENUE AND THE CROSS OBJECTION S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-2, BENGALURU AND THEY RELATE TO THE ASSESSMENT YEARS 2 013-14 AND 2014-15. ALL THE APPEALS WERE HEARD TOGETHER AND H ENCE THEY ARE ITA NOS.786 & 787/BANG/2019 CO NOS.46 & 47/BANG/2019 PAGE 2 OF 6 BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAK E OF CONVENIENCE. 2. THE REVENUE IS CHALLENGING THE DECISION OF LD CIT(A) IN GRANTING PARTIAL RELIEF IN THE DISALLOWANCE MADE BY THE AO U/S 14A OF THE ACT IN BOTH THE YEARS. THE ASSESSEE, IN ITS CROSS OBJECTIONS, SEEKS DELETION OF THE ADDITION PARTIALLY CONFIRMED BY LD CIT(A) IN BOTH THE YEARS. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MINING IRON ORE. 4. WE SHALL FIRST TAKE UP THE APPEAL FILED BY T HE REVENUE FOR AY 2013-14. THE ASSESSEE HAD EARNED EXEMPT INCOME BY WAY OF SHARE INCOME FROM PARTNERSHIP FIRMS, GAIN ON REDEMPTION O F MUTUAL FUND, DIVIDEND INCOME AND INTEREST IN IIFCL BONDS TO THE TUNE OF RS.107.75 LAKHS. THE ASSESSEE HAD DISALLOWED A SUM OF RS.5,14,096/- ONLY U/S 14A OF THE ACT. THE AO, HOW EVER, APPLIED THE PROVISIONS OF RULE 8D AND ACCORDINGLY COMPUTED DISALLOWANCE U/S RULE 8D(2)(III) AT RS.194.91 LAKHS. ACCORDINGL Y, HE DISALLOWED A SUM OF RS.189.77 LAKHS AFTER GIVING SET OFF OF THE AMOUNT DISALLOWED BY THE ASSESSEE. THE LD CIT(A), BY PLACING RELIANC E ON THE DECISION RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENTS LTD (372 ITR 694) AND ALSO THE DECISION RENDERED BY THE CO-ORDINATE BENCH OF ITAT, BANGALORE IN THE CAS E OF TRANQUIL REALTY PRIVATE LIMITED (ITA NO.185/BANG/2016), HELD THAT THE DISALLOWANCE CANNOT EXCEED THE EXEMPTED INCOME. AC CORDINGLY HE CONFIRMED THE DISALLOWANCE U/S 14A OF THE ACT TO TH E EXTENT OF EXEMPT INCOME. ITA NOS.786 & 787/BANG/2019 CO NOS.46 & 47/BANG/2019 PAGE 3 OF 6 5. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. THOUGH THE LD D.R STRONGLY SUPPORTED THE ORDER OF T HE ASSESSING OFFICER, YET WE NOTICE THAT THE LD CIT(A) HAS FOLLO WED THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF TR ANQUIL REALTY PRIVATE LIMITED (SUPRA) AND THE DECISION RENDERED B Y HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENTS LTD (SU PRA) IN ORDER TO HOLD THAT THE DISALLOWANCE CANNOT EXCEED THE AMOUNT OF EXEMPTED INCOME. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 6. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REVENUE FOR AY 2014-15. IN THIS YEAR, THE ASSESSEE HAD DISALLOWED A SUM OF RS.6,29,283/- U/A 14A OF THE ACT. THE AO, HOWEVER, COMPUTED THE DISALLOWANCE AT RS.204.08 LAKHS U/R 8D(2)(III) OF I .T RULES AND ACCORDINGLY DISALLOWED A SUM OF RS.197.78 LAKHS AFT ER GIVING SET OFF OF AMOUNT DISALLOWED BY THE ASSESSEE. 7. BEFORE LD CIT(A), THE ASSESSEE CONTENDED THAT , FOR THE PURPOSE OF COMPUTING AVERAGE VALUE OF INVESTMENTS UNDER RUL E 8D, ONLY THOSE INVESTMENTS WHICH HAVE YIELDED DIVIDEND INCOM E SHOULD BE TAKEN INTO ACCOUNT. IN SUPPORT OF THIS PROPOSITION , THE ASSESSEE PLACED ITS RELIANCE ON THE DECISION RENDERED BY SPE CIAL BENCH OF DELHI ITAT IN THE CASE OF VIREET INVESTMENTS (P) LT D (2017)(82 TAXMANN.COM 415)(SB). THE LD CIT(A) ACCEPTED THE C ONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DIRECTED THE AO TO DIS ALLOWANCE BY CONSIDERING ONLY THOSE INVESTMENTS WHICH HAVE YIELD ED DIVIDEND INCOME. ITA NOS.786 & 787/BANG/2019 CO NOS.46 & 47/BANG/2019 PAGE 4 OF 6 8. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE DECIS ION RENDERED BY SPECIAL BENCH OF ITAT, DELHI IN DECIDING THIS ISSUE . ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS DECISI ON RENDERED ON THIS ISSUE. 9. WE SHALL NOW TAKE UP THE CROSS OBJECTIONS FI LED BY THE ASSESSEE FOR BOTH THE YEARS UNDER CONSIDERATION. THE LD A.R SUBMITTED THAT THE ASSESSEE SHALL NOT PRESS THE CROSS OBJECTIONS, IF THE APPEALS OF THE REVENUE ARE DISMISSED. ACCORDINGLY THESE CROSS OBJECTIONS WERE TAKEN AS HEARD WITH THE ANNOUNCEMENT THAT, IF THE B ENCH DECIDES THAT THE APPEALS OF THE REVENUE ARE REQUIRED TO BE ALLOWED/PARTLY ALLOWED, THEN ALL THE APPEALS SHALL BE FIXED FOR RE -HEARING. BOTH THE PARTIES AGREED TO THE SAME. SINCE WE HAVE UPHELD TH E ORDERS PASSED BY LD CIT(A) IN BOTH THE YEARS AND ACCORDINGLY DISM ISSED THE APPEALS OF THE REVENUE, KEEPING IN VIEW OF THE SUBM ISSION OF LD A.R THAT THE ASSESSEE SHALL NOT BE PRESSING THE CROSS O BJECTIONS, WE DISMISS THE CROSS OBJECTIONS FILED FOR BOTH THE YEA RS AS NOT PRESSED. 10. IN THE RESULT, BOTH THE APPEALS OF THE REVEN UE AND BOTH THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON JULY, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 26TH JULY, 2019. /VMS / ITA NOS.786 & 787/BANG/2019 CO NOS.46 & 47/BANG/2019 PAGE 5 OF 6 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NOS.786 & 787/BANG/2019 CO NOS.46 & 47/BANG/2019 PAGE 6 OF 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..
