Rajratna Metal Industries Ltd., Ahmedabad V. The Addl.CIT, Range-5, Now Range-3(1), Ahmedabad

ITA 940/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8407 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P D SHAH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 940/AHD/2015 (ASSESSMENT YEAR: 2010-11) RAJJRATNA METAL INDUSTRIES LTD., 909, SAKAR-III, NR. INCOME TAX CIRCLE, ASHRAM ROAD, AHMEDABAD APPEL LANT VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE-5 [NOW 3(1)], A-410, PRATYAKSH KAR BHAVAN, PANJARPOLE, AMBAWADI, AHMEDABAD 380015 RES PONDENT PAN: AAACR9980M /BY ASSESSEE : SHRI P. D. SHAH, A.R. /BY REVENUE : SHRI MUDIT NAGPAL , SR. D.R. /DATE OF HEARING : 21.08.2017 /DATE OF PRONOUNCEMENT : 22.09.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 A RISES AGAINST THE CIT(A)-9, AHMEDABADS ORDER DATED 12.01.2015, IN CAS E NO. CIT(A)- ITA NO. 940/AHD/15 (RAAJRATNA METAL INDUSTRIES LTD . VS. ACIT) A.Y. 2010-11 - 2 - XI/447/ADDL.CIT.R-5/13-14, IN PROCEEDINGS U/S. 143(3 ) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES. CASE FILE PERUSED. 2. THE ASSESSEES FIRST SUBSTANTIVE GRIEVANCE CHALLE NGES BOTH THE LOWER AUTHORITIES ACTION DISALLOWING/ADDING A SUM OF RS. 92,175/- U/S.14A R.W. RULE 8D OF THE INCOME TAX RULES. BOTH THE LOWER AUTHORIT IES ARE OF THE OPINION THAT THE ASSESSEES INVESTMENT INVOLVED AT LEAST THIS MU CH EXPENDITURE IN EARNING ITS EXEMPT DIVIDEND INCOME. THE CASE FILE HOWEVER INDIC ATES THAT THE ASSESSEE HAS NOT DERIVED ANY SUCH EXEMPT INCOME IN THE IMPUGNED ASSESSMENT YEAR. WE THEREFORE QUOTE HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS. CORRTECH ENERGY P. LTD, REPORTED IN [2015] 372 ITR 97 (GUJ.) HO LDING THAT SECTION 14A READ WITH COMPUTATION PROVISION ENSHRINED IN RULE 8 D DOES NOT APPLY IN ABSENCE OF ANY EXEMPT INCOME IN RELEVANT PREVIOUS YEAR. WE THEREFORE QUOTE THE ABOVE JUDICIAL PRECEDENT TO DELETE THE IMPUGNED DISALLOWA NCE OF RS.92,175/-. 3. ASSESSEES LATTER SUBSTANTIVE GROUND CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION DISALLOWING/ADDING A SUM OF RS.3,85,810/- U/S. 36(1)(VA) R.W.S. 2(24) OF THE ACT ON ACCOUNT LATE P AYMENT OF EMPLOYEES CONTRIBUTION TO PF & ESI IN QUESTION. THERE IS NO DI SPUTE THAT HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS. GUJ ARAT STATE ROAD TRANSPORT CORPORATION (2014) 366 ITR 170 (GUJ) UPHOLDS SUCH A DISALLOWANCE IN PRINCIPLE. THE ASSESSEES CASE HOWEVER IS THAT RELEVANT DUE DAT E HAS TO BE SEEN NOT FROM THE RELEVANT MONTH OF SALARY BUT THE ONE PERTAINING TO ITS PAYMENT. HE THEN FILES A COMPUTATION CHART INDICATING IT TO HAVE PAID ABOVE EMPLOYEES PF/ESI CONTRIBUTIONS ON 22.05.2009 AND 28.05.2009 AS AGAIN ST THE DUE DATES THEREOF FOLLOWING ON 20.06.2009. THE REVENUE FAILS TO DISP UTE THIS FACTUAL POSITION. WE THEREFORE QUOTE THIS TRIBUNALS CO-ORDINATE BENC H DECISION IN KANOI PAPER & INDUSTRIES LTD. VS. ACIT 75 TTJ 448 THAT THE RELEVANT D ATE IN SUCH CASE IS THAT OF MONTH OF THE ACTUAL PAYMENT OF WAGES/SALARIES. WE THEREFORE RELY ON THE ITA NO. 940/AHD/15 (RAAJRATNA METAL INDUSTRIES LTD . VS. ACIT) A.Y. 2010-11 - 3 - ABOVE CO-ORDINATE BENCH DECISION AND DIRECT THE ASS ESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE AS WELL. 4. THIS ASSESSEES APPEAL IS ACCORDINGLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF SEPTEMBER, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22/09/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0