ITO, W-4(2), Chandigarh V. M/s Punjab Agro Industries Corp. Ltd., Chandigarh

ITA 820/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9836 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANJIT SINGH
• 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. 820/CHD/2018 / ASSESSMENT YEAR : 2014-15 THE ITO, WARD-4(2),2 CHANDIGARH M/S PUNJAB AGRO INDUSTRIES CORPORATION LTD, PLOT NO. 2-A, SECTOR 28-A, CHANDIGARH ./PAN NO: AAACP9905G / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI MANJIT SINGH, SR. DR ' ! / REVENUE BY : SHRI PRIKSHIT AGGARWAL, CA # $ % /DATE OF HEARING : 25.10.2018 &'() % / DATE OF PRONOUNCEMENT : 21.11 . 2018 %'/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 21.03.2018 OF THE COMMISSIONER OF INC OME TAX (APPEALS)-2, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)]. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE RAISED IN THE PRESENT APPEAL RELATES TO THE ADDITION MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTIO N 14A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') READ WITH RULE 8D O F THE INCOME TAX RULES IS SQUARELY COVERED BY THE RECENT DECISION OF THE C HANDIGARH BENCH OF THE TRIBUNAL ORDER DATED 23.7.2018 IN ITA NO. 1320/CHD/ 2017, IN THE OWN CASE OF THE ASSESSEEE, A COPY OF THE SAME HAS BEEN PLACE D ON RECORD. ITA NO.820/CHD/2018- M/S PUNJAB AGRO INDUSTRIES CORPN LTD., CHANDIGARH 2 3. WE HAVE GONE THROUGH THE ORDER PASSED BY THE COO RDINATE BENCH OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE VIDE O RDER DATED 23.7.2018 FOR ASSESSMENT YEAR 2013-14, WHEREIN, THE TRIBUNAL IN TURN RELYING UPON DECISIONS OF THE MUMBAI BENCH OF THE TRIBUNAL IN DA GA GLOBAL CHEMICAL PVT LTD, ITA NO. 5592/MUM/2012 DATED 1.1.2015 AS AL SO OF HON'BLE DELHI HIGH COURT IN JOINT INVESTMENT PVT LTD VS. CIT, H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE. THE RELEVANT PART OF THE ORDER IS REPRODUCED HEREIN UND ER:- 10. WE HAVE PERUSED THE SUBMISSIONS OF BOTH THE PARTIES. 11. HONBLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENTS PVT. LTD. VS. CIT AND IN CASE OF DABA G LOBAL CHEMICAL PVT. LTD. COORDINATE BENCH OF ITAT MUMBAI, HELD THAT DISALLOWANCE UNDER SECTION 14A R.W.R 8D O F THE RULES CANNOT EXCEED THE EXEMPT INCOME. IF ANY DISALLOWANCE COULD BE MADE THAT IS TO BE RESTRICTED TO THE TAX EXEMPT INCOME. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINV EST LTD. SIMILAR VIEW WAS TAKEN BY THE HONBLE HIGH CO URT OF PUNJAB AND HARYANA IN THE CASE OF MASCOT FOOWARE O N WHICH LD.CIT(A) RELIED UPON. THE MATTER STANDS SETT LED WITH THE JUDGEMENT OF APEX COURT IN THE CASE OF MAXOPP INVESTMENT LTD. DT. FEBRUARY 12, 2018 12. HENCE, KEEPING IN VIEW THE JUDICIAL PRONOUNCEMENT ON THE ISSUE, THE FACT THAT THE ASSES SEE HAS NOT BORROWED ANY FUNDS OR LOANS FOR INVESTMENT PURPOSE WHICH YIELDED THE DIVIDEND AND THE INVESTME NTS HAS BEEN DONE OUT OF THE SURPLUS FUNDS AND BASED ON THE ARGUMENTS OF THE LD. AR , WE HEREBY DIRECT THE DISALLOWANCE BE RESTRICTED TO THE DIVIDEND INCOME EARNED. 4. THE LD. CIT(A) IN THIS CASE HAS ALSO RESTRICTED THE DISALLOWANCE U/S 14A TO THE EXTENT OF DIVIDEND INCOME EARNED BY THE ASSESSEE. ITA NO.820/CHD/2018- M/S PUNJAB AGRO INDUSTRIES CORPN LTD., CHANDIGARH 3 WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE CIT(A) AND THE APPEAL OF THE REVENUE IS THEREFORE, DISMIS SED 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