ACIT, CHENNAI V. TVS Investments Ltd., CHENNAI

MA 134/CHNY/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0773 (ITAT-CHENNAI)
• Duration Of Justice: 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER .. M.P. NO. 134/MDS/2013 (IN I.T.A. NO. 2172/MDS/2010) & I.T.A. NO. 2172/MDS/2010 ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI - 600 034. (PETITIONER) V. M/S TVS INVESTMENTS LTD., JAYALAKSHMI ESTATE, NEW NO.29 (OLD NO.8), HADDOWS ROAD, CHENNAI - 600 034. PAN : AAACT 1154 H (RESPONDENT) PETITIONER BY : SHRI N. MADHAVAN, JCIT RESPONDENT BY : SHRI SAROJ KUM AR PARIDA, ADVOCATE DATE OF HEARING : 30.08.2013 DATE OF PRONOUNCEMENT: 06.09.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THROUGH THIS MISCELLANEOUS PETITION, DEPARTMENT ME NTIONS THAT THIS TRIBUNAL DID NOT ADJUDICATE ON A GROUND RAISED BY IT REGARDING DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 14A OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), WHICH WA S SCALED DOWN BY THE CIT(APPEALS). 2 M.P. NO. 134/MDS/10 2. A PERUSAL OF THE ORDER DATED 4 TH APRIL, 2013 SHOWS THAT THIS TRIBUNAL HAD NOT CONSIDERED THE GROUND RAISED BY THE REVENUE ON DISALLOWANCE UNDER SECTION 14A OF THE ACT. THE ASSESSING OFFICE R HAD CONSIDERED 5% OF THE DIVIDEND RECEIVED BY THE ASSESSEE FROM M/S T VS ELECTRONICS LIMITED, WHICH WAS CLAIMED TO BE EXEMPT, FOR A DISA LLOWANCE UNDER SECTION 14A OF THE ACT. THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER AT 5% WAS SCALED DOWN TO 2% BY THE CIT(APPE ALS). ASSESSEE HAD RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH C OURT IN THE CASE OF GORDREJ& BOYCE MFG. CO. LTD. V. DY. CIT (328 ITR 8 1). 3. NOW BEFORE US, SHRI N. MADHAVAN, APPEARING FOR T HE REVENUE, SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSI NG OFFICER WAS UNJUSTLY DISTURBED BY THE CIT(APPEALS). 4. PER CONTRA, SHRI SAROJ KUMAR PARIDA, LEARNED COU NSEL FOR THE ASSESSEE, SUBMITTED THAT THE CIT(APPEALS) WAS JUSTI FIED IN REDUCING THE DISALLOWANCE TO 2% OF THE DIVIDEND INCOME. 5. WE HAVE HEARD THE CONTENTIONS. NO DOUBT, RULE 8 D OF INCOME-TAX RULES, 1962 WAS NOT APPLICABLE FOR THE IMPUGNED ASS ESSMENT YEAR. NEVERTHELESS, BY VIRTUE OF DECISION OF HON'BLE BOMB AY HIGH COURT IN THE CASE OF GORDREJ& BOYCE MFG. CO. LTD. (SUPRA), A.O. WAS JUSTIFIED IN MAKING A DISALLOWANCE ON THE CLAIM OF EXEMPT DIVIDE ND INCOME. LD. 3 M.P. NO. 134/MDS/10 CIT(APPEALS), AFTER CONSIDERING THESE ASPECTS, WAS OF THE OPINION THAT A 2% DISALLOWANCE ON DIVIDEND INCOME WOULD BE REASONA BLE. ASSESSING OFFICER HAD CONSIDERED 5% OF DIVIDEND INCOME. THER E IS NO DISPUTE THAT ASSESSEE HAD RECEIVED DIVIDEND INCOME, WHICH WAS CR EDITED TO ITS ACCOUNT. IN THESE CIRCUMSTANCES, WE ARE OF THE OPI NION THAT THE CIT(APPEALS) WAS JUSTIFIED IN SUSTAINING THE DISALL OWANCE AND REDUCING IT FROM 5% TO 2%. WE DO NOT FIND ANY REASON TO INTERF ERE. RELATED GROUND OF THE REVENUE STANDS DISMISSED. 6. IN THE RESULT, MISCELLANEOUS PETITION FILED BY T HE REVENUE IS ALLOWED, APPEAL RECALLED INSOFAR AS IT RELATES TO T HE DISALLOWANCE UNDER SECTION 14A IS CONCERNED AND THE RECALLED APPEAL IS DISMISSED. ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, THE 6 TH SEPTEMBER, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH SEPTEMBER, 2013. KRI. COPY TO: PETITIONER/RESPONDENT/CIT(A)/CIT/D.R./GUA RD FILE