M/s. L&T Infrastructure Development Projects Ltd., CHENNAI V. ITO, CHENNAI

MA 296/CHNY/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5670 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 25-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Keywords: Rectification of order; Earning of tax free income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH, CHENNAI . , ' # ' $%,' ( BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER MISCELLANEOUS PETITION NOS.292 TO 296/MDS/2016 IN I.T.A.NOS.2330 TO 2334/MDS/2015 ( / ASSESSMENT YEARS :2002-03, 2006-07, 2009-10 TO 2011-12) M/S. L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LTD., P.B. NO.79, MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI 600 089. VS THE INCOME TAX OFFICER, COMPANY WARD II(1), CHENNAI-34. PAN: AAACL7617D (PETITIONER) ( / RESPONDENT) APPLICANT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE /RESPONDENT BY : SHRI N. MADHAVAN, JCIT /DATE OF HEARING : 05.01.2018 /DATE OF PRONOUNCEMENT : 05.01.2018 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER: THESE MISCELLANEOUS PETITIONS ARE FILED BY THE ASSE SSEE PRAYING FOR RECTIFICATION OF MISTAKE APPARENT ON RECORD BY RECALLING THE ORDER OF THE TRIBUNAL PASSED IN I.T.A. NOS.2330 TO 2334/MDS/ 2015 DATED 11.08.2016 FOR THE ASSESSMENT YEARS 2002-03, 2006-0 7, 2009-10, 2010-11 AND 2011-12. 2 MP NOS.292 TO 296/MDS/2016 2. FOR THE ASSESSMENT YEARS 2002-03 AND 2006-07, TH E ASSESSEE HAS RAISED TWO IDENTICAL GROUNDS IN ITS MISCELLANEO US PETITIONS AND THEY ARE BRIEFLY STATED HEREIN BELOW FOR DISPOSAL:- (I) THE BENCH OF THE TRIBUNAL HAD NOT CONSIDERED TH E DECISION OF THE TRIBUNAL IN THE CASE ACIT VS. MR. M. BASKARAN I N ITA NO.1717/MDS/2013 WHEREIN IT WAS HELD THAT WHEN THE ASSESSEE HAD NOT EARNED ANY EXEMPT INCOME, DISALLOWANCE CANN OT BE MADE U/S.14A OF THE ACT. (II) THE BENCH OF THE TRIBUNAL HAD NOT CONSIDERED T HE DECISION OF THE TRIBUNAL IN THE APPELLANTS OWN CASE IN ITA NO.2226/MDS/2013 FOR THE ASSESSMENT YEAR 2007-08 WH EREIN IT WAS HELD THAT THE LD.AO SHALL CALCULATE DISALLOWANC E U/S.14A OF THE ACT, THE INTEREST EXPENSES DIRECTLY INCURRED FO R EARNING EXEMPT INCOME ON THE INVESTMENTS OTHER THAN THE INV ESTMENT MADE IN SPVS PLUS 2% OF THE DIVIDEND INCOME EARNED ON THE INVESTMENTS OTHER THAN THE INVESTMENT MADE IN SPVS AFTER VERIFYING THE TOTAL INVESTMENTS MADE BY THE ASSESSE E. 3. FOR THE ASSESSMENT YEARS 2009-10, 2010-11 & 2011 -12 THE ASSESSEE HAS RAISED ONE LENGTHY GROUND IN ITS MISCE LLANEOUS PETITIONS AND IT IS BRIEFLY STATED HEREIN BELOW FOR ADJUDICAT ION:- 3 MP NOS.292 TO 296/MDS/2016 (I) THE BENCH OF THE TRIBUNAL HAD NOT CONSIDERED TH E DECISION OF THE TRIBUNAL IN THE APPELLANTS OWN CASE IN ITA NO.2226/MDS/2013 FOR THE ASSESSMENT YEAR 2007-08 WH EREIN IT WAS HELD THAT THE LD.AO SHALL CALCULATE DISALLOW ANCE U/S.14A OF THE ACT, THE INTEREST EXPENSES DIRECTLY INCURRED FOR EARNING EXEMPT INCOME ON THE INVESTMENTS OTHER THAN THE INVESTMENT MADE IN SPVS PLUS 2% OF THE DIVIDEND INC OME EARNED ON THE INVESTMENTS OTHER THAN THE INVESTMENT MADE IN SPVS AFTER VERIFYING THE TOTAL INVESTMENTS MADE BY THE ASSESSEE. 4. AT THE OUTSET THE LD.AR SUBMITTED THAT WITH RESP ECT TO ASSESSMENT YEARS 2002-03 & 2006-07, RULE 8D OF THE RULES IS NOT APPLICABLE BECAUSE IT CAME INTO EFFECT ONLY FROM 24 .03.2008. HE FURTHER SUBMITTED THAT THE HONBLE JURISDICTIONAL H IGH COURT IN THE CASE S. SIMPSON & CO. LTD., VS. DCIT IN TAX CASE (APPEAL ) NO.2621 OF 2006 FOR THE ASSESSMENT YEAR 2001-02 VIDE ITS DECIS ION DATED 15.10.2012 HAD HELD THAT WHEN THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF EXPENDITURE INCIDENTAL TO THE EARNING OF DIVIDEND INCOME, ESTIMATION OF 2% OF THE GROSS TOTAL DIVIDEND INCOME WOULD SUFFICE FOR DISALLOWANCE U/S.14A OF THE ACT. IT WAS THEREFORE S UBMITTED THAT THE BENCH OF THE TRIBUNAL HAD FAILED TO TAKE NOTE OF TH E ABOVE SAID 4 MP NOS.292 TO 296/MDS/2016 DECISION WHILE REMITTING BACK THE MATTER TO THE FIL E OF LD.AO WITH CERTAIN DIRECTIONS. THE LD.AR THEREFORE PLEADED THA T THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2002-03 & 2006-07 MAY BE RECALLED AND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH THE DECISION RENDERED IN THE CASE S.SIMPSON & CO. LTD., SUPRA. THE LD.DR COULD NOT CONTROVERT TO THE SUBMISSION OF THE LD.AR. 5. AFTER HEARING BOTH SIDES, WE FIND MERIT IN THE S UBMISSION OF THE LD.AR. AS POINTED OUT BY THE LD.AR FOR THE ASSESSME NT YEARS 2002-03 & 2006-07, RULE 8D OF THE RULES IS NOT APPLICABLE B ECAUSE IT HAS COME INTO EFFECT FROM 24.03.2008. FURTHER THIS BENCH OF THE TRIBUNAL HAD FAILED TO TAKE NOTE OF THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL MADRAS HIGH COURT IN THE CASE S.SIMP SON & CO. LTD., SUPRA WHICH IS A MISTAKE APPARENT ON RECORD THAT RE QUIRES TO BE RECTIFIED. THEREFORE WE HEREBY RECALL THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2002-03 & 2006-07 AND FURTHER DIRE CT THE LD.AO TO MAKE DISALLOWANCE U/S.14A OF THE ACT BY ESTIMATING THE DISALLOWANCE @2% OF THE GROSS TOTAL DIVIDEND INCOME EARNED BY TH E ASSESSEE DURING THE RELEVANT ASSESSMENT YEARS AS HELD BY THE DECISION OF HONBLE JURISDICTIONAL MADRAS HIGH COURT IN THE CAS E S.SIMPSON & CO. LTD., SUPRA. 5 MP NOS.292 TO 296/MDS/2016 6. WITH RESPECT TO THE OTHER ASSESSMENT YEARS WE DO NOT FIND ANY MISTAKE THAT IS APPARENT IN THE ORDER OF THE TRIBUN AL BECAUSE WE HAD REMITTED ALL THE OTHER APPEALS OF THE ASSESSMENT YE ARS 2009-10, 2010- 11 & 2011-12 TO THE FILE OF LD.AO ONLY WITH THE DIR ECTION TO VERIFY WHETHER THE INVESTMENTS ARE MADE BY THE ASSESSEE OU T OF ITS INTEREST FREE FUNDS IN ITS SISTER CONCERNS FOR STRATEGIC REA SONS AND IF FOUND SO, TO DELETE THE ADDITION AND IF FOUND OTHERWISE TO PA SS APPROPRIATE ORDERS AS PER MERIT AND LAW, WHICH IS IN ACCORDANCE WITH T HE EARLIER DECISIONS OF THE TRIBUNAL CITED IN THE ORDER. 7. IN THE RESULT THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE IN MP NOS. 292 & 293 OF 2016 ARE ALLOWED AS INDICATED HEREIN ABOVE AND MP NOS. 294, 295 & 296 OF 2016 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- ( ' # ' $ % ) (DUVVURU R.L REDDY) ' /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) /ACCOUNTANT MEMBER /CHENNAI, ! /DATED 5 TH JANUARY, 2018 RSR . $%&' ()& /COPY TO: 1. APPLICANT 2. RESPONDENT 3. * ( ('% )/CIT(A) 4. * /CIT 5. &,- . /DR 6. -/ % /GF.