DCIT, CC-I, Ludhiana V. M/s Vardhman Industries Ltd., New Delhi

ITA 798/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9834 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-10-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 30-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA KUMAR CAS; KANIKA GUP
• Assessee Lawyers: RENU AMITABH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! . .., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 798/CHD/2018 / ASSESSMENT YEAR : 2014-15 THE DCIT, CC-1, LUDHIANA M/S VARDHMAN INDUSTRIES LIMITED, 2 ND FLOOR, JEEVANDEEP BUILDING, PARLIAMENT BUILDING, NEW DELHI ./PAN NO: AAACV3229R / APPELLANT /RESPONDENT ! /ASSESSEE BY : SMT. RENU AMITABH, CIT DR ' ! / REVENUE BY : S/SHRI ASHWANI KUMAR & ADITYA KU MAR, CAS & MS. KANIKA GUPTA, CA # $ % /DATE OF HEARING : 25.10.2018 &'() % / DATE OF PRONOUNCEMENT : 27.11. 2018 %'/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 06.03.2018 OF THE COMMISSIONER OF INC OME TAX (APPEALS)-5, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE C IT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 (IN SHORT I.T. RULES) ON ACCOUNT OF EXPENSES RELA TABLE TO EARNING OF TAX EXEMPT INCOME. ITA NO.798/CHD/2018- M/S VARDHMAN INDS LTD, LUDHIANA 2 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL INGOTS, GP SHEET S / COILS, GC SHEETS, CCL SHEETS AND GENERATION OF POWER. THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE CERTAIN INVESTMENTS, THE INCOME RELATING TO WHICH WAS EXEMPT FROM TAXATION AS PER THE PROVISIONS OF THE INCOME TAX AC T. HOWEVER, THE ASSESSEE HAD NOT OFFERED ANY DISALLOWANCE OF EXPEND ITURE IN THIS RESPECT. THE ASSESSING OFFICER, HOWEVER, APPLIED RULE 8D OF THE I.T. RULES AND COMPUTED THE DISALLOWANCE U/S 14A OF THE ACT AT RS. 54,01,792/- BEING AGGRIEVED BY THE ABOVE DISALLOWANCE, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) DELETED THE ADDITION WHILE RELYING UP ON THE DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE OWN CAS E OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS 2008-09 TO 2010-11. BEFORE US, THE LD. AR HAS RELIED UPON THE VARIOUS DECISIONS OF THE HON'BLE HI GH COURT INCLUDING THAT OF THE JURISDICTIONAL HIGH COURT OF PUNJAB AND HAR YANA IN THE CASE OF CIT VS. WINSOME TEXTILES (2009) 319 ITR 204 (P&H) AND HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD VS. ITO (2015) 378 ITR 33 (DELHI) AND OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY P. LTD. (2014) 45 TAXMAN.COM 116 AND FURTHE R OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. M/S SH IVAM MOTORS (P) LTD (2014) 272 CTR (ALL) 277 AND VARIOUS OTHER CASE LAW S. IN ALL THE ABOVE REFERRED TO CASE LAWS, THE HON'BLE HIGH COURTS HAVE BEEN UNANIMOUS TO HOLD THAT NO DISALLOWANCE IS ATTRACTED U/S 14A IN CASE THE ASSESSEE HAS NOT EARNED ANY INCOME NOT FORMING PART OF THE TOTAL INC OME. ITA NO.798/CHD/2018- M/S VARDHMAN INDS LTD, LUDHIANA 3 IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THE AP PEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS HERE BY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.11.2018 SD/- SD/- ( . . , # $ / B.R.R. KUMAR) %& / ACCOUNTANT MEMBER ( / SANJAY GARG ) / JUDICIAL MEMBER DATED : 27.11.2018 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR