M/s. Cholamandalam Investment and Finance Co. Ltd., CHENNAI V. ACIT, CHENNAI

MA 302/CHNY/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5563 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 17-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: PARAS S SALVA
• Section: 14A

Judgement Text

, ' ' , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , # $ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER A ND SHRI. G. PAVAN KUMAR, JUDICIAL MEMBER M.P. NO S. 302 & 303 /MDS/2016 ( ./I.T.A. NOS. 1184 & 1183/MDS/2014) /ASSESSMENT YEAR : 2009-10 & 2008-09 M/S. CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED, DARE HOUSE, 1ST STREET, 2, N.S.C. BOSE ROAD, CHENNAI - 600 001. [PAN: AAACC 1226H] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE -I(3), CHENNAI. ( / APPELLANT) ( /RESPONDENT) & ' / APPELLANT BY : SHRI PARAS S. SALVA, ADVOCATE & SHRI PRATIK PODDAR, CA )*& ' /RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT ' /DATE OF HEARING : 17.03.2017 ' /DATE OF PRONOUNCEMENT : 19 .04.2017 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE MISCELLANEOUS PETITIONS ARE FILED BY THE ASSESS EE AGAINST THE ORDER OF TRIBUNAL IN ITA NO. 1184/MDS/2014 FOR THE ASSESSMENT YEAR 2009-10 AND ITA NO. 1183/MDS/2014 FOR THE ASSESSMENT YEAR 2 008-09 DATED M.P. NOS. 302 & 303/MDS/2016 :- 2 -: 28.04.2016. FOR THE SAKE OF CONVENIENCE, WE TAKE U P THE MP. NO. 303/MDS/2016 FOR THE ASSESSMENT YEAR 2008-09. 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF ASS ESSING OFFICER TO RE-EXAMINE AND CALCULATE DISALLOWANCE REFERRED AT PAGE 42 PARA 8.9 WHICH REQUIRED FURTHER CLARIFICATION. 'WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER WHO SHALL RE-EXAMINE AND CALCULATE THE DISALLOWANCE.' THE LD. AR EXPLAINED THAT THE TRIBUNAL HAS RIGHTLY SET ASIDE THE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER. FURTHER, THE ASSESSEE COMPANY HAS MADE INVESTMENTS IN SISTER CONCERNS/SUBSIDIARY COMPANIES AND NO BORROWED FUNDS ARE UTILISED FOR MAKING INVESTMENTS AND ALSO NO EXP ENDITURE WAS INCURRED ON SUCH INVESTMENTS. THEREFORE, THE LD. AR REQUESTED THE TRIBUNAL TO GIVE MORE CLARITY IN RESPECT OF RE-EXAMINATION AND CALCULATIO N OF DISALLOWANCE FOR WHICH THE LD. DR HAS NO SERIOUS OBJECTIONS. 3. WE HEARD BOTH THE PARTIES AND WE ARE OF THE OPIN ION THAT THE MODIFICATION PRAYED BY THE LD. AR IS CLARIFICATORY IN NATURE TO THE EXISTING ORDER OF THE TRIBUNAL PASSED ON 28.04.2016. THEREFORE, T HE LAST SENTENCE OF THE PARA 8.9 OF THE TRIBUNAL ORDER AS REFERRED ABOVE WI LL BE READ AS UNDER: M.P. NOS. 302 & 303/MDS/2016 :- 3 -: 'WE FIND THE PROVISIONS OF SEC. 14A R.W.R. 8D OF T HE IT RULES ARE MANDATORILY APPLICABLE FROM THE ASSESSMENT YEAR 200 8-09 AND FURTHER THE ASSESSEE COMPANY HAS MADE INVESTMENTS IN SUBSIDIARY COMPANIES FOR BUSINESS PARTICIPATION WITH PROFIT MOTIVE. THE LD. AR SUBMI TTED THAT THE ASSESSEE COMPANY HAS ADEQUATE OWN FUNDS AND NO BORROWED FUND S WERE UTILISED FOR MAKING SUCH INVESTMENTS IN EQUITY SHARES AND ALSO N O EXPENDITURE WAS INCURRED FOR EARNING EXEMPTED INCOME. WE ARE OF TH E OPINION THAT THE MATTER HAS TO BE EXAMINED BY THE LOWER AUTHORITIES. IN TH E INTEREST OF JUSTICE, WE REMIT THE DISPUTED ISSUE TO THE FILE OF THE ASSESSI NG OFFICER FOR VERIFICATION OF INVESTMENTS IN ASSESSEE'S SUBSIDIARY COMPANY/SISTER CONCERNS/MUTUAL FUND SHARES AND ALSO WHETHER INVESTMENTS ARE MADE OUT OF OWN FUNDS OR BORROWED FUNDS AND THEN SHALL APPLY THE PROVISIONS OF SECTIO N 14A R.W.R. 8D OF THE IT RULES, FURTHER THE ASSESSEE SHOULD BE PROVIDED ADEQ UATE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER ON MERITS. ACCORD INGLY, WE REMIT THE DISPUTED ISSUE FOR LIMITED PURPOSE TO THE FILE OF A SSESSING OFFICER.' 4. SIMILARLY, THE ASSESSEE COMPANY HAS FILED AN MP. NO. 304/MDS/2016 IN ITA NO. 1184/MDS/2014 FOR THE ASSESSMENT YEAR 20 09-10. THE LD. AR ARGUED AND REFERRED TO PARA 10.1 AT PAGE 49 FOR THE SAID ASSESSMENT YEAR, WE ARE OF THE OPINION THAT FINDINGS OF THE ASSESSMENT YEAR 2008-09 IN ITA NO. 1183/MDS/2014 AT PARA 3 AND ARE APPLICABLE FOR THE ASSESSMENT YEAR. M.P. NOS. 302 & 303/MDS/2016 :- 4 -: 5. IN THE RESULT, MISCELLANEOUS PETITION FILED BY T HE ASSESSEE IN MP. NO. 303/MDS/2016 & 302/MDS/2016 ARE ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 19TH DAY OF APRI L, 2017 AT CHENNAI. /CHENNAI, / /DATED: 19TH APRIL, 2017. JPV ' )#12 32 /COPY TO: 1. & /APPELLANT 2. )*& /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 )## /DR 6. 7 /GF SD/ - ( ) (CHANDRA POOJARI) /ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) # /JUDICIAL MEMBER