ACIT Corporate Circle 5(2), CHENNAI V. Rupa Holdings Pvt. Ltd., CHENNAI

ITA 994/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3137 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 10-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A; 115JB

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 ./ ITA NO.994/CHNY/2019 ) *) / ASSESSMENT YEAR : 2015-16 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. V. M/S RUPA HOLDINGS PVT. LTD., NO.827, 3 RD FLOOR, DHUN BUILDING, ANNA SALAI, CHENNAI - 600 002. PAN : AAACR 3652 E (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ./,- 0 1 / RESPONDENT BY : SH. N. DEVANATHAN, ADVOCATE 2 0 3% / DATE OF HEARING : 22.10.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 08.11.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, CHENNA I, DATED 26.12.2018 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE ITSELF WHILE FILING RETURN OF INCOME, DISALLOWED THE INTEREST EXPENDITURE FOR EARNING EXEMPTED 2 I.T.A. NO.994/CHNY/19 INCOME. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT WHILE COMPUTING THE BOOK PROFIT UNDER SE CTION 115JB OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT WAS NOT CONSIDERED. O N A QUERY FROM THE BENCH WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT, WHETHER DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT HAS TO BE ADDED BACK OR NOT? THE LD. D.R. VERY FAIRLY SUBMITTED THAT THIS TRIBUNAL CONSISTENTLY TAKING A VIEW THAT DISAL LOWANCE MADE UNDER SECTION 14A OF THE ACT NEED NOT BE ADDED BACK WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE AC T. 3. WE HEARD SH. N. DEVANATHAN, THE LD.COUNSEL FOR T HE ASSESSEE ALSO. ACCORDING TO THE LD. COUNSEL, THE A SSESSEE HAS NOT EARNED EXEMPTED INCOME, THEREFORE, THE CIT(APPEALS) BY PLACING RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN RE DINGTON (INDIA) LTD. V. ADDL. CIT (2017) 392 ITR 633, ALLOWED THE C LAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER SPECIFICALLY ADDED THE DISALLOWANCE MADE UN DER SECTION 14A OF THE ACT WHILE COMPUTING BOOK PROFIT UNDER SECTIO N 115JB OF THE 3 I.T.A. NO.994/CHNY/19 ACT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT CANNOT BE ADDED B ACK TO THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE CI T(APPEALS) ALSO FOUND THAT THERE WAS NO TAXABLE INCOME EARNED BY TH E ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THEREFORE, BY PLACING HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN RE DINGTON (INDIA) LTD. (SUPRA), THE CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHA TEVER DISALLOWANCE MADE BY THE ASSESSING OFFICER, INCLUDI NG THE INTEREST EXPENSES UNDER SECTION 14A OF THE ACT, CANNOT FORM PART OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 8 TH NOVEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 8 TH NOVEMBER, 2019. KRI. 4 I.T.A. NO.994/CHNY/19 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-3, CHENNAI 4. PRINCIPAL CIT- 5, CHENNAI 5. 9< .3 /DR 6. =) > /GF.