The DCIT, Circle-8, Surat V. Shri Ashokbhai Haribhai Gajera, Surat

ITA 931/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9039 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R. N. VEPARI
• Keywords: Earning of tax free income; Rule 8D
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 931/AHD/2013 (ASSESSMENT YEAR: 2009-10) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-8, SURAT V/S SHRI ASHOKBHAI HARIBHAI GAJERA FLAT NO. -1, VRUSHAL NAGAR SOCIETY, NR. ASHAPURI SOCIETY, KATARGAM ROAD, SURAT- 395004 (APPELLANT) (RESPONDENT) PAN: ABTPG2048J APPELLANT BY : SHRI MUDIT NAGPAL, SR. D. R. RESPONDENT BY : SHRI R. N. VEPARI, A.R. ( )/ ORDER DATE OF HEARING : 02 -03-201 7 DATE OF PRONOUNCEMENT : 03 -03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)- V, SURAT DATED 28.01.2003 PERTAINING TO A.Y. 2009-1 0. ITA NO 931/A HD/2013 . A.Y. 2009-10 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS U NDER:- 1. THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO RE-CA LCULATE THE DISALLOWANCES U/S 14A AS PER RULE 8D BY HOLDING ONLY THAT INTEREST COMPONENT OUG HT TO HAVE BEEN SEGREGATE AND VALUE OF ONLY THOSE SHARE SHOULD BE TAKEN FROM WHIC H DIVIDEND IS RECEIVED WHICH IS CONTRADICTORY TO THE FORMULA GIVEN IN RULE 8D OF I. T. RULES AND CORRECTLY APPLIED BY THE A.O. 2. THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITIO N OF RS.33,56,722/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCES U/S 14A R.W.S. 8D. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY THE A.O. INSTEAD OF RESTRING THE A DDITION 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSE E STATED THAT THE ISSUES RAISED BY THE REVENUE HAVE BEEN DECIDED BY THE TRIB UNAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN ASSESSEES OWN CASE IN A.Y. 2008-09 IN ITA NO. 675/AHD/2012. 4. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 5. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW AND HAVE CAREFULLY PERUSED THE ORDER OF THE CO-ORDINATE BENC H. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. THE TRIBUNAL HAD THE OCCASION TO CONSIDER AN IDENTICAL ISSUE IN ITA NO. 675/AHD/2012, THE RELEVA NT FINDINGS OF THE TRIBUNAL READS AS UNDER:- 4. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUS ED. RELEVANT FACTS NARRATED IN THE PRECEDING PARAGRAPHS ARE NOT REPEATED FOR THE S AKE OF BREVITY. THE DISPUTE BETWEEN THE PARTIES IS QUA AVERAGE VALUE OF INVESTM ENT. THE ASSESSING OFFICER APPEARS TO HAVE TAKEN ALL INVESTMENTS MADE IN SHARE S AND SECURITIES AGAINST THE ASSESSEES CASE THAT ON PERTAINING TO IMPUGNED EXEM PT INCOME ONLY HAVE TO BE ADOPTED FOR THE PURPOSES OF COMPUTING THE DISALLOWA NCE IN QUESTION. THERE CAN HARDLY BE ANY QUARREL THAT SECTION 14A APPLIES ONLY IN CASE OF EXEMPT INCOME AND ITA NO 931/A HD/2013 . A.Y. 2009-10 3 NOT QUA ANY OTHER INCOME. SO IS THE CASE WITH RUL E 8D OF THE INCOME TAX RULES APPLICABLE W.E.F. THE IMPUGNED ASSESSMENT YEAR 2008 -09. BOTH ARE DISALLOWING PROVISIONS IN A TAX STATUTE TO BE LITERALLY INTERPR ETED. THE REVENUE FAILS TO POINT OUT ANY JUDICIAL PRECEDENT TO THE CONTRARY. WE ACC ORDINGLY HOLD IN THESE FACTS AND CIRCUMSTANCES THAT THE CIT(A) HAS RIGHTY TAKEN INTO ACCOUNT ASSESSEES INVESTMENTS IN SHARES GIVING RISE TO ABOVE STATED E XEMPT INCOME ONLY. WE FIND NO REASON TO IN INTERFERE WITH THE SAME. THE REVENU ES SOLE SUBSTANTIVE GROUND FAILS. 6. AS NO DISTINGUISHING DECISION HAS BEEN BROUGHT IN F AVOUR OF THE REVENUE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL (SUPRA), WE DECLINE TO INTERFERE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 03- 03- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 03 /03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD