Assistant Commissioner Of Income Tax, Circle-1, Kota V. Shri Ajay Kumar Jain, Kota

ITA 792/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3721 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Earning of tax free income; Tax effect; Rule 8D
• Section: 14A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 792/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 THE ACIT, CIRCLE-1, KOTA. CUKE VS. SHRI AJAY KUMAR JAIN 277, SHOPPING CENTRE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AANPJ 1861 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (J.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/07/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 08.03.2018 OF CIT(A), KOTA FOR THE ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUND AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 48,727/- MADE BY THE AO U/S 14A R.W. RULE 8D. ITA NO. 792/JP/2018 ACIT VS. SHRI AJAY KUMAR JAIN 2 (II) THE APPELLANT CRAVES LIBERTY TO RAISE ADDITION AL GROUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HE ARING. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE-RESP ONDENT THIS APPEAL WAS CALLED FOR HEARING. THE ONLY GRIEVANCE O F THE REVENUE IS AGAINST THE ADDITION OF RS. 48,727/- MADE U/S 14A O F THE ACT DELETED BY THE LD. CIT(A). UNDISPUTEDLY TAX EFFECT IN THIS APPEAL OF THE REVENUE IS NOT EXCEEDING RS. 20 LACS WHEREAS AS PER THE CIR CULAR NO. 3/2018 DATED 11.07.2018 OF CBDT THE DEPARTMENT SHALL WITHD RAW ALL THE APPEALS HAVING TAX EFFECT NOT EXCEEDING RS. 20 LACS PENDING BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT AS IT IS AP PARENT FROM THE GROUNDS OF APPEAL THE ISSUE FALLS IN THE EXCEPTION UNDER PARA 10(B) OF CIRCULAR NO. 3/2018. 3. WE FIND THAT THE AO MADE DISALLOWANCE OF RS. 48, 727/- U/S 14A WHICH WAS DELETED BY THE LD. CIT(A) BY RECORDING TH E FACT THAT THE ASSESSEES OWN INTEREST FREE FUND WAS MORE THAN SUF FICIENT FOR THE INVESTMENT IN QUESTION AND THEREFORE, THE DISALLOWA NCE MADE BY THE AO ON ACCOUNT OF INTEREST EXPENDITURE IS NOT CALLED FOR. AT THE OUTSET WE NOTE THAT THE CIT(A) HAS DELETED THE DISALLOWANC E MADE BY THE AO BY GIVING A FINDING OF FACT THAT NO EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR EARNING EXEMPT INCOME. FURTHER, AS PER CLAUSE (B) OF PARA ITA NO. 792/JP/2018 ACIT VS. SHRI AJAY KUMAR JAIN 3 10 OF CIRCULAR NO. 3/2018 THE ISSUE WHICH INVOLVES THE BOARD ORDER, NOTICES, INSTRUCTION AND CIRCULAR WHICH HAS BEEN HE LD TO BE ILLEGAL OR ULTRA VIRES ARE REQUIRED TO BE CONTESTED ON MERITS EVEN IF THE TAX EFFECT IS LESS THAN MANDATORY LIMIT PRESCRIBED IN THESE CI RCULAR. THE ISSUE OF DISALLOWANCE MADE U/S 14A DOES NOT INVOLVE THE QUES TION OF HOLDING ANY BOARD ORDER, NOTICES, INSTRUCTION AND CIRCULAR AS ILLEGAL OR ULTRA VIRES. ACCORDINGLY, THIS ISSUE DOES NOT FALL IN THE EXCEPTION AS CLAIMED BY THE DEPARTMENT. HENCE, WHEN THE TAX EFFECT IN TH IS APPEAL OF THE REVENUE IS NOT EXCEEDING THE LIMITS PROVIDED IN THE CIRCULAR NO. 3/2018 THE SAME IS NOT MAINTAINABLE. ACCORDINGLY THE APPEA L OF THE REVENUE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/07/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/07/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- SHRI AJAY KUMAR JAIN, KOTA. 3. VK;DJ VK;QDR@ CIT ITA NO. 792/JP/2018 ACIT VS. SHRI AJAY KUMAR JAIN 4 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 792/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR