SSE Commodities Pvt. Ltd., New Delhi V. ITO WARD - 24(2), New Delhi

ITA 9173/DEL/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8485 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: SAURABH GOYAL
• Keywords: Opportunity of being heard; Rule 8D; Set aside
• Section: 14A; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC-1: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.9173/DEL./2019 ASSESSMENT YEAR 2010-11 SSE COMMODITIES PVT. LTD. 6926, FF, JAIPURIA MILLS, CLOCK TOWER, SUBZI MANDI, NEW DELHI. PAN NO. AAKCS7804F VS. ITO WARD 24(2) C.R. BUILDING, I.P. ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SAURABH GOYAL, CA FOR REVENUE : SHRI PRAKASH DUBEY, SR. DR DATE OF HEARING : 0 4 .01.2021 DATE OF PRO NOUNCEMENT : 14 .01.2021 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-XXV, NEW DELHI DATED 26.0 9.2019 FOR AY 2010-11. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 3. LD. COUNSEL FOR ASSESSEE DID NOT PRESS GROUND NO . 1 & 2 OF THE APPEAL, CHALLENGING THE REOPENING OF THE ASS ESSMENT, THE SAME ARE DISMISSED AS NOT PRESSED. 2 ITA.NO 9173/DEL./2019 4. ON GROUND NO. 3 & 4 ASSESSEE CHALLENGED THE DISALLOWANCE OF RS. 1,03,162/- U/S 14A READ WITH RU LE 8D OF THE I.T. ACT. LD. COUNSEL FOR ASSESSEE SUBMITTED T HAT AO DID NOT MAKE ANY ADDITION U/S 14A OF THE ACT. THE LD. CIT(A) ENHANCED THE ASSESSMENT BY MAKING DISALLOWANCE U/S 14A AND MADE THE ADDITION OF RS. 1,03,162/- U/S 14A OF THE ACT. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE HA S EXPLAINED BEFORE THE CIT(A) THAT ASSESSEE HAS EARNE D DIVIDEND AMOUNTING TO RS. 25,015/- FROM KOTAK ARBITAGE FUND WHICH IS NOT CLAIMED AS EXEMPT IN THE COMPUTATION OF INCOME AND INCLUDED IN THE TOTAL INCOME. HE HAS SUBMITTED THA T ASSESSEE HAS PAID TAX ON THE SAME DIVIDEND INCOME ALSO. HE HAS REFERRED TO PB 25 WHICH IS DETAILS OF INCOME TO SHO W ASSESSEE HAS DIVIDEND RECEIVED FROM KOTAK ARBITAGE FUND AMOU NTING TO RS. 25,014.92 IN ASSESSMENT YEAR UNDER APPEAL. HE HAS, THEREFORE, RESTRICTED HIS ARGUMENTS TO THE POINT TH AT ADDITION SHOULD BE RESTRICTED TO THE AMOUNT OF RS. 25,015/- ONLY AND SINCE TAX IS ALREADY PAID ON THIS AMOUNT BY INCLUDI NG THE SAME IN THE COMPUTATION OF INCOME, THEREFORE, NO FURTHER ADDITION IS TO BE MADE AGAINST THE ASSESSEE. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT LD. CIT(A) HAS CORREC TLY APPLIED RULE 8D FOR MAKING THE ABOVE DISALLOWANCE AGAINST T HE ASSESSEE. 3 ITA.NO 9173/DEL./2019 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE ORDERS OF THE AUTHORITIES BELOW. THE CIT(A) DISALL OWED RS. 1,03,162/- U/S 251 OF THE IT ACT. THE ASSESSEE PLE ADED BEFORE LD. CIT(A) THAT ASSESSEE EARNED DIVIDEND INCOME OF RS. 25,015/- ONLY WHICH IS NOT CLAIMED AS EXEMPT IN THE COMPUTATION OF INCOME AND INCLUDED IN THE TOTAL INC OME OF THE ASSESSEE. THESE FACTS HAVE NOT BEEN DISPUTED BY TH E LD. CIT(A) IN HIS FINDINGS. THE HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. JOINT INVESTMENT PVT. LTD. 372 ITR 694 HELD THAT DISALLOWANCE U/S 14A COULD NOT BE EXCEEDED MOR E THAN THE DIVIDEND INCOME EARNED BY THE ASSESSEE. SINCE IN THE CASE OF THE ASSESSEE THE RECORD CLEARLY REVEALED THAT AS SESSEE HAS EARNED DIVIDEND INCOME OF RS. 25,015/- ONLY, THEREF ORE, THE ADDITION SHALL HAVE TO BE RESTRICTED TO RS. 25,015/ - ONLY AS AGAINST RS. 1,03,162/-. THE ASSESSEE FURTHER CLAIM ED THAT TAX HAS ALREADY BEEN PAID ON AMOUNT OF RS. 25,015/-, TH EREFORE, NO FURTHER ADDITION SHALL HAVE TO BE MADE. IN VIEW OF THE ABOVE, I SET ASIDE THE ORDERS OF THE AUTHORITIES BE LOW AND DIRECT THE AO TO RESTRICT THE DISALLOWANCE U/S 14A OF THE IT ACT TO THE TUNE OF RS. 25,015/- ONLY. AO IS DIRECTED TO VERIF Y, IF ASSESSEE HAS PAID TAX ON THIS AMOUNT BY INCLUDING THE SAME I N THE TOTAL INCOME OF THE ASSESSEE THEN NO FURTHER DISALLOWANCE SHALL BE MADE AGAINST THE ASSESSEE. THE AO IS DIRECTED TO G IVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, THE GROUND NO. 3 & 4 OF THE APPEAL OF ASSESSEE ARE ALLO WED. 4 ITA.NO 9173/DEL./2019 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.01.2021. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 14.01.2021 *KAVITA ARORA COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.