ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA V. M/S TOLARAM SATYADEV AGRO PVT. LTD., KOTA

MA 78/JPR/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6908 (ITAT-JAIPUR)
• Duration Of Justice: 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 25-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;I QJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM MISC. APPLICATION NO. 78/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 672/JP/2017) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 THE ACIT CIRCLE 1 KOTA CUKE VS. M/S. TOLARAM SATYADEV AGRO PVT. LTD 40-A, TALWANDI KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCT 2015 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SHRI P.P. MEENA, JCIT- DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/07/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24/07/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED A MISCELLANEOUS APPLICATION AGAINST ITAT, JAIPUR BENCH ORDER DATED 09-10-2017 FOR RECTIFIC ATION OF MISTAKE U/S 254(2) OF THE I.T.ACT BY PRAYING THEREIN AS UNDER:- IN THE LIGHT OF THE DECISION OF HON'BLE HIGH COUR T, JAIPUR BENCH, JAIPUR IN DBIT APPEAL NO. 67/2018 AND IN VIEW OF SECTION 254(2) OF THE I.T. ACT, 1961, IT IS PRAYED THAT THE ORDER DATED 09-10-2017 IN ITA NO. 672/JP/2017 I N THE CASE OF TOLAAM SATYADEV AGRO PVT. LTD., TALWANDI, K OTA MAY KINDLY BE REVIEWED IN THE LIGHT OF THE PROVISIO N OF SECTION 14A AND BOARDS CIRCULAR NO. 5/2014 AND ALS O CONSIDERING THAT THE CASE FALL IN THE EXCEPTION UND ER PARA 8(B) MA NO. 78/JP/2018 ACIT ,CIRCLE 1, KOTA VS M/S.TOLAR AM SATYADEVO AGRO PVT. LTD., KOTA . 2 OF THE CIRCULAR 21/2015 DATED 10-12-2015 OF THE CBD T. THE APPEAL MAY BE DECIDED ON MERIT. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO MENTION THA T SIMILAR ISSUE HAS BEEN DECIDED BY THE ITAT JAIPUR BENCH VIDE ITS ORDER DAT ED 20-07-2018 IN THE CASE OF ITO VS SHRI TAYAB ALI (ITA NO.478/JP/2018 F OR THE ASSESSMENT YEAR 2013-14) BY OBSERVING AS UNDER:- 3. WE FIND THAT THE AO MADE DISALLOWANCE OF RS. 41,901/- U/S 14A WHICH WAS DELETED BY THE LD. CIT(A) BY RECORDING THE FACT THAT THE ASSESSEES OWN INTEREST FREE FUND WAS MORE THAN SUFFICIENT FOR THE INVESTMENT IN QUESTION AND THEREFORE, THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF INTEREST EXPENDITURE IS NOT CALLED FO R. AT THE OUTSET WE NOTE THAT THE CIT(A) HAS DELETED THE DISALLOWANCE MADE BY THE AO BY GIVING A FINDING OF F ACT THAT NO EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR EARNING EXEMPT INCOME. FURTHER, AS PER CLAUSE (B) O F PARA 8 OF CIRCULAR NO. 21/2015 OR CLAUSE (B) OF PARA 10 OF CIRCULAR NO. 3/2018 THE ISSUE WHICH INVOLVES THE BO ARD ORDER, NOTICES, INSTRUCTION AND CIRCULAR WHICH HAS B EEN HELD TO BE ILLEGAL OR ULTRA VIRES ARE REQUIRED TO BE CON TESTED ON MERITS. EVEN IF THE TAX EFFECT IS LESS THAN MANDATO RY LIMIT PRESCRIBED IN THESE CIRCULAR. THE ISSUE OF DISALLOWAN CE MADE U/S 14A DOES NOT INVOLVE THE QUESTION OF HOLDI NG ANY BOARD ORDER, NOTICES, INSTRUCTION AND CIRCULAR AS I LLEGAL OR ULTRA VIRES. ACCORDINGLY, THIS ISSUE DOES NOT FALL IN THE EXCEPTION AS CLAIMED BY THE DEPARTMENT. HENCE, WHEN THE TAX EFFECT IN THIS APPEAL OF THE REVENUE IS NOT EXC EEDING THE LIMITS PROVIDED IN THE CIRCULAR NO. 21/2015 AS WELL AS CIRCULAR NO. 3/2018 THE SAME IS NOT MAINTAINABLE. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED. MA NO. 78/JP/2018 ACIT ,CIRCLE 1, KOTA VS M/S.TOLAR AM SATYADEVO AGRO PVT. LTD., KOTA . 3 IT IS ALSO PERTINENT TO MENTION THAT THE ISSUE OF D ISALLOWANCE MADE U/S 14A DOES NOT INVOLVE THE QUESTION OF HOLDING ANY BOARD S ORDER, NOTICES, INSTRUCTION AND CIRCULAR AS ILLEGAL OR ULTRA VIRES. WE HAVE ALSO TAKEN INTO CONSIDERATION THE DECISION OF HON'BLE RAJASTHAN HIG H COURT (SUPRA) BUT THE BENCH DOES NOT FIND ANY INFIRMITY IN ITS ORDER. THUS THE MISC. APPLICATION FILED BY THE REVENUE IS DISMISSED. 3. IN THE RESULT, THE MISC. APPLICATION APPEAL OF T HE REVENUE IS DISMISSED AS PRONOUNCED IN THE OPEN COURT ON 20 -07-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 /07/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE 1, KOTA 2. IZR;FKHZ@ THE RESPONDENT- M/S. TOLARAM SATYADEV AGRO PVT. LT D. KOTA 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (MA NO. 78/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR