Polaris Banyan Holding Pvt Ltd., CHENNAI V. ACIT Corporate Circle 5(2), CHENNAI

ITA 896/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0960 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 02-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G. SIVASUBRAMANIAN
• Keywords: Earning of tax free income
• Section: 143(3); 5(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.896/CHNY/2019 ! / ASSESSMENT YEAR : 2015-2016. POLARIS BANYAN HOLDING PVT. LTD, NO.244, CAREX CENTRE, ANNA SALAI, CHENNAI 600 006. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2) CHENNAI. [PAN AAJCA 4622N] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. G. SIVASUBRAMANIAN, CA &' '# $ % /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. ( ) $ * /DATE OF HEARING : 23-10-2019 +,! $ * /DATE OF PRONOUNCEMENT : 11-12-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3 , CHENNAI ITA NO.896/2019 :- 2 -: (CIT(A) FOR SHORT) DATED 01.02.2019 FOR THE A SSESSMENT YEAR (AY) 2015-2016. 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT NAMELY M/S. POLARIS BANYAN HOLDING P RIVATE LTD, IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF T HE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF INVESTMENT S. THE ORIGINAL RETURN OF INCOME FOR THE AY 2015-16 WAS FILED ON 30 .09.2015 DISCLOSING TOTAL INCOME OF RS. 1,49,07,530/- AND THE SAME WAS REVISED ON 22.11.2016 ADMITTING TOTAL INCOME OF @1,58,68,360/- . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY T HE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI (HEREINAFTER CALLED AO) VIDE ORDER DATED 26.12.20 17 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) AT TOTAL INCOME OF RS. 3,07,97,325/-. WHILE DOING SO, THE AO MADE DISALLOWANCE OF @1,42,98,965/- U/S.14A OF THE ACT AND @6,30,000/- D ISALLOWANCE OF ALLOWANCE IN DIMINUTION IN VALUE OF INVESTMENTS. 3. BEING AGGRIEVED, THE ASSESSEE-COMPANY PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDER CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER U/S.14A OF T HE ACT. ITA NO.896/2019 :- 3 -: 4. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT AMOUNT OF DISALLOWANCE MAY BE RESTRICTED TO THE EX TENT OF EXEMPT INCOME. IN THIS CONNECTION, HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PR. CIT VS. M/ S. MODERATE LEASING AND CAPITAL SERVICES PVT LTD. 2018-TIOL-431 -HON'BLE SUPREME COURT-IT, WHERE THE HON'BLE SUPREME COURT CONCURRE D WITH THE VIEW OF HONBLE DELHI HIGH COURT IN THE CASE JOINT INVESTMENTS P. LTD VS. CIT 372 ITR 694 , HOLDING THAT AMOUNT OF DISALLOWANCE U/S.14A OF TH E ACT MUST BE RESTRICTED TO THE QUANTUM OF EXEMPT INC OME EARNED DURING THE YEAR UNDER CONSIDERATION. 5. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRES ENTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD . WE ARE OF THE CONSIDERED OPINION THAT THE MAXIMUM DISALLOWANCE THAT COULD HAVE BEEN MADE BY THE ASSES SING OFFICER IS ONLY TO THE EXTENT OF EXEMPT INCOME CLAIMED BY THE ASSESSEE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE U/S.14A OF THE ACT TO THE EXTENT OF EXEMPT INCOME . ITA NO.896/2019 :- 4 -: 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 11TH DAY OF DECEMBER, 2019 , AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED: 11 TH DECEMBER, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF