GKB Opthalmics Limited, Mapusa V. The Assistant Commissioner of Income Tax, Panaji

ITA 97/PAN/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8267 (ITAT-PANAJI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 11-05-2023
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH : PANAJI [THROUGH VIRTUAL HEARING AT ITAT : PUNE] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER I.T.A.No.97/PAN./2023 Assessment Year 2014-2015 GKB Ophthalmics Limited, (Company), 16-A GKB Ophthalmics Limited, Tivim Industrial Estate, Mapusa Goa – 403 526. PAN AAACG7070R vs. The ACIT, Circle-2(1), Aayakar Bhavan, EDC Complex, Patto, Panaji Goa. PIN – 403 001. (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri N. Shrikanth Date of Hearing : 12.03.2024 Date of Pronouncement : 13.03.2024 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal I.T.A.No.97/PAN./2023, for assessment year 2014-2015, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2022-23/1051812517(1), dated 31.03.2023, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The assessee pleads the following substantive grounds in the instant appeal : 2 ITA.No.97 /PAN./2023 1. “In the facts and circumstances of the case the Commissioner of Income Tax (Appeal) erred in confirming the action of the Assessing officer of disallowing interest to the extent of Rs.12,17,734 under section 14A of Income Tax Act although no part of the loans on which interest of Rs.1,92,22,095 was paid during the year, was utilised for making investments in shares and further the said investments in shares were made by the appellant company by utilising its non-interest bearing funds i.e. the share capital and reserves of Rs.l 7,99,31,873. 2. In the facts and circumstances of the case and in law the Commissioner of Income Tax (Appeal) erred in confirming the action of the Assessing officer of disallowing interest to the extent of Rs.12,17,734 under section 14A of Income Tax Act on the ground that the appellant has not controverted the reasons given by the assessing officer to disallow the above interest and has not proved any nexus between the interest free funds available and investment although the appellant had brought its audited accounts on the records of the Commissioner of Income Tax (Appeals) and had also informed him in its letter dated 21/02/2023 that its share capital of Rs.4,15,35,800 and reserves of Rs.13,83,96,073 as per above audited accounts were much more than the investments of Rs.5,53,08,598 made by it in shares. The appellant company craves leave to add, alter or amend any arou nd of appeal at the time of hearing of appeal or before.” 3 ITA.No.97 /PAN./2023 3. We have heard the Revenue represented by Shri N. Shrikanth, learned Sr. Authorised Representative. He vehemently supported both the learned lower authorities action disallowing the impugned interest of Rs.12,17,734/- u/sec.14A r.w. Rule 8D(2) (ii) of I.T. Rules, 1963. The assessee’s pleadings all along on the other hand are that such interest disallowance(s) would not be sustainable as it’s non-interest bearing funds exceed the corresponding investment(s) made for deriving the exempt income in the relevant previous year. There is further no denial to the clinching fact that the learned lower authorities have prima facie not considered only the dividend yielding investment(s) in the relevant previous year. That being the case, we deem it appropriate in the larger interest of justice to restore the assessee’s sole substantive ground back to the Assessing Officer for his afresh appropriate adjudication preferably within three effective opportunities of hearing subject to the rider that it is the assessee’s sole risk and responsibility to prove the case in consequential proceedings. Ordered accordingly. 4. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the open Court on 13.03.2024. Sd/- Sd/- [INTURI RAMA RAO] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 13 th March, 2024 VBP/- 4 ITA.No.97 /PAN./2023 Copy to 1. The appellant 2. The respondent 3. The Pr. CIT, Panaji concerned. 4. The D.R. ITAT, Panaji Bench, Panaji 5. Guard File. //By Order// //True Copy // Sr. Private Secretary, ITAT, Pune Benches, Pune.