M/s Octal Suppliers Pvt. Ltd., Kolkata V. DCIT, Circle -12, Kolkata, Kolkata

ITA 865/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75102 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2012
• Court: TRIBUNAL
• Department Lawyers: A K SINGH LD CITSR
• Assessee Lawyers: RAVI TULSIYAN FCA LD
• Keywords: Earning of tax free income; Retrospective amendment
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C,KOLK ATA (BEFORE HONBLE SHRI SHAMIM YAHYA, AM & & HONB LE SHRI GEORGE MATHAN, JM.) I.T.A.NO. 865/KOL/2012 A.Y 2006-07 M/S. OCTAL SUPPLIERS PVT. LTD -VS- D .C.I.T, CIRCLE-12, KOLKATA PAN: AAACO3505D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI TULSIYAN, FCA LD.AR RESPONDENT BY : SHRI A.K. SINGH, LD.CIT/SR.DR DATE OF HEARING : 26-03-2014 DATE OF PRONOUNCEMENT : 26 -03-2014 : O R D E R : SHRI GEORGE MATHAN : JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXIV, KOLKATA IN APPEAL NO. 968/CIT(A)- XXIV/CIR-12/11-12 DATED 15-03-2012 FOR THE ASSESSM ENT YEAR 2006-07. 2. SHRI RAVI TULSIYAN, FCA , LEARNED AR REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI A.K SINGH, LEARNED CIT/SR.DR REPRESENTED O N BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL IN ITA NO. 865/KOL/2012 FOR THE A.Y 2006-07, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE ERRONEOUS, ARBITRARY, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF DEPRECIAT ION ON WINDMILL TO THE EXTENT OF RS.7,70,43,760/- , WITHOUT GIVING ANY REASONS OF HIS OWN FOR HIS DECISION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.75 ,000/- U/S. 94(7) OF THE INCOME-TAX ACT, 1961, WITHOUT GIVING ANY REA SONS OF HIS OWN FOR HIS DECISION. 4. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION/DISALLOWANC E OF RS.51,59,509/- U/S. 14A OF THE INCOME-TAX ACT, 196 1, WITHOUT GIVING ANY REASONS OF HIS OWN FOR HIS DECISION. (B) WITHOUT ANY PREJUDICE TO ABOVE, THE LEARNED CI T(A) ERRED IN UPHOLDING THE COMPUTATION OF THE DISALLOWANCE U/S. 14A OF THE ACT, ITA NO. 865/KOL/12-C-JM 2 MADE BY IMPLIED APPLICATION OF RULE 8D OF THE INCOM E- TAX RULES, 1962, WITHOUT APPRECIATING THAT SUCH RULE DID NOT HAVE ANY RETROSPECTIVE EFFECT IN THE YEAR UNDER PRESENT APPE AL. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION/DISALLOWANCE OF RS.71,250/- U/S. 40(A)(IA) OF THE INCOME-TAX ACT, 1961, WITHOUT GIVING ANY REASONS OF HIS OWN FOR HIS DECISION, AND WITHOUT A PPRECIATING THAT THE ACTUAL PAYMENTS OF THE RELEVANT AMOUNTS OF TA XES OF RS. 434/- AND OF RS.2,550/- HAD BEEN MADE BEFORE THE DUE DA TE FOR FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON AND HENCE, NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT WAS CALLED FOR. 4. GROUND NOS. 1 AND 6 ARE GENERAL IN NATURE. THE S AME ARE DISMISSED. THE LEARNED AR FOR THE ASSESSEE HAS SUBMITTED THAT HE DID NOT PRESS GROUND NOS.2,3 AND 5. CONSEQUENTLY, THE SAID GROUND NOS. 2,3 AND 5 STAND DISMISSED AS NOT PRESSED. 5. IN RESPECT OF GROUND NOS.4(A) AND 4(B), IT WAS S UBMITTED BY THE LEARNED AR FOR THE ASSESSEE THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) IN UPHOLDING THE ADDITION/DISALLOWANCE MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 14A R.W.R 8D OF THE IT RULES 1962 WITHOUT GIVING ANY RE ASONS. IT WAS THE SUBMISSION THAT THE PROVISIONS OF RULE 8D OF THE I.T RULES 1962 WER E APPLICABLE FROM THE A.Y 2008- 09 ONWARDS AND WERE NOT RETROSPECTIVE IN OPERATIO N. IT WAS THE SUBMISSION THAT THE ASSESSMENT YEAR UNDER APPEAL WAS ASSESSMENT YEAR 20 06-07. HOWEVER, IT WAS FAIRLY AGREED BY THE LEARNED AR FOR THE ASSESSEE THAT THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF CIT, KOL IV, KOLKATA VS. M/S. RR SEN & BROTHERS (P) LTD REPORTED IN GA NO.3019 OF 2012 I.T.A.T NO. 243 OF 2 012 DATED JANUARY 4, 2013 HAD UPHELD THE VIEW CONSISTENTLY HELD BY THE TRIBUNAL A T 1% OF THE EXEMPT INCOME. IT WAS SUBMITTED BY HIM THAT HE HAD NO OBJECTION IF THE D ISALLOWANCE IS RESTRICTED TO 1% OF THE EXEMPT DIVIDEND INCOME. 6. IN REPLY, THE LEARNED CIT/DR HAS VEHEMENTLY SUP PORTED THE ORDERS OF THE AO AND THE LD.CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ASSESSMENT YEAR UNDER APPEAL IS THE ASSESSMENT YEA R 2006-07 AND AS THE PROVISIONS OF RULE 8D OF THE I.T RULES 1962 ARE PROSPECTIVE IN A PPLICATION FROM THE ASSESSMENT YEAR 2008-09, RESPECTFULLY FOLLOWING THE SAID DECIS ION OF THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF M/S. RR SEN & B ROTHERS (P) LTD (REFER TO SUPRA) ITA NO. 865/KOL/12-C-JM 3 THE AO IS DIRECTED TO RESTRICT THE ADDITION/DISALLO WANCE MADE BY INVOKING THE PROVISIONS OF SECTION 14A OF THE I.T ACT 1961[R.W.R 8D OF THE I.T RULES 1962] TO 1% OF THE DIVIDEND INCOME, WHICH HAS BEEN CLAIMED AS E XEMPT INCOME. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED AS STATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 26-03-2014 SD/- SD/- (SHAMIM YAHYA ) ( GEORGE MATHAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 26-03-2014 *P.PAUL(SR.P.S.) COPY OF THE ORDER IS FORWARDED TO :- 1) M/S. OCTAL SUPPLIERS PVT. LTD R.NO.42, 3 RD FL., 9 OLD CHINA BAZAR ST, KOL-1. 2) THE DCIT, CIRCLE-12, KOLKATA. 3) C.I.T.(APPEALS)- 4) C.I.T., 5) D.R., I.T.A.T. (TRUE COPY) BY ORDER ASSTT. REGISTRAR I.T.AT., KOLKATA