DCIT, CHENNAI v. Shriram Holdings (Madras) Pvt. Ltd., CHENNAI

ITA 1476/CHNY/2013 | 2007-2008
Pronouncement Date: 01-10-2013 | Result: Dismissed

Appeal Details

RSA Number 147621714 RSA 2013
Assessee PAN AABCS0246L
Bench Chennai
Appeal Number ITA 1476/CHNY/2013
Duration Of Justice 3 month(s)
Appellant DCIT, CHENNAI
Respondent Shriram Holdings (Madras) Pvt. Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 01-10-2013
Date Of Final Hearing 01-10-2013
Next Hearing Date 01-10-2013
Assessment Year 2007-2008
Appeal Filed On 01-07-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN VICE PRESIDENT & SHRI VIKAS AWASTHY JUDICIAL MEMBER I.T.A. NO. 1476/MDS/2013 ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX COMPANY CIRCLE-VI(2) AAYAKAR BHAVAN NEW BLOCK 121 M.G. ROAD 7 TH FLOOR CHENNAI 600 034. (APPELLANT) VS M/S. SHRIRAM HOLDINGS (MADRAS) PVT LTD. (SINCE AMALGAMATED WITH SHRIRAM TRANSPORT FINANCE COMPANY LTD) MOOKAMBIKA COMPLEX NO.4 LADY DESIKA ROAD MYLAPORE CHENNAI 600 004. [PAN: AABCS 0246 L] (RESPONDENT) REVENUE BY : SHRI T.N. BETGERI JCIT ASSESSEE BY : SHRI R. SIVARAMAN ADVOCATE DATE OF HEARING : 01-10-2013 DATE OF PRONOUNCEMENT : 01-10-2013 O R D E R PER VIKAS AWASTHY JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V CHENN AI DATED 28-03-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. I.T.A. NO. 1476/MDS/2013 2 2. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY. 2007-08 ON 26-10-2007 DECLARING LOSS OF `1 59 43 040/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 12-09-2008. DURING THE R ELEVANT AY THE ASSESSEE HAD SHOWN NET PROFIT OF ` 15 53 51 695/- IN ITS PROFIT & LOSS A/C ON RECEIPT OF ` 18 08 93 253/- AS DIVIDENDS AND ` 1 10 45 571/- AS INTEREST. THE ASSESSEE ADDED BACK ` 95 98 518/- AS CHARGES DEBITED TO PROFIT & LOSS A/C AND DIVIDEN D INCOME OF ` 18.00 CRORES AS EXEMPT INCOME. THIS RESULTED IN NE T LOSS OF ` 1 59 43 050/-. THE ASSESSING OFFICER WHILE FINALIZI NG THE ASSESSMENT MADE DIS-ALLOWANCE OF ` 3 44 81 361/- U/S.14A R.W.R. 8D OF THE INCOME TAX RULES. THE ASSESSING OFFICER VIDE ORDER DATED 22-12-2009 ASSESSED THE INCOME OF THE ASSESS EE AS ` 89 39 803/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) VIDE IMPUGNED ORDER FOLLOWING THE ORDER OF THE TRI BUNAL IN ITA NO. 638/MDS/2012 DECIDED ON 04-02-2013 IN THE CASE OF O NE OF ASSESSEES GROUP CONCERN SHRIRAM CAPITAL LIMITED DE LETED THE ADDITION MADE U/S.14A R.W.R. 8D. THE REVENUE HAS C OME IN I.T.A. NO. 1476/MDS/2013 3 APPEAL IMPUGNING THE ORDER OF THE CIT(APPEALS) DELE TING THE DIS- ALLOWANCE MADE U/S. 14A R.W.R. 8D. 3. SHRI T.N. BETGERI APPEARING ON BEHALF OF THE RE VENUE STRONGLY SUPPORTING THE ASSESSMENT ORDER PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. THE LD. DR RELIED ON THE GROUN DS OF APPEAL. 4. ON THE OTHER HAND SHRI R. SIVARAMAN ADVOCATE A PPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE IMPUGNED ORDER OF THE CIT(APPEALS) AND SUBMITTED THAT THE OR DER IS WELL REASONED AND DETAILED THEREFORE SHOULD NOT BE INTE RFERED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE IN APPEAL RAI SED BY THE REVENUE IS DELETING OF DIS-ALLOWANCE OF EXPENDITURE TO THE TUNE OF ` 3 44 81 361/- U/S.14A R.W.R.8D. IT IS WELL SETTLED PROPOSITION THAT RULE 8D IS APPLICABLE W.E.F. AY. 2008-09. [ GODREJ & BOYCE MFG. CO. LTD. REPORTED AS 328 ITR 81 (BOM) ]. HENCE IN THE INSTANT CASE WHICH RELATES TO AY. 2007-08 THE ASSESSING OF FICER HAS ERRED IN APPLYING THE PROVISIONS OF RULE 8D. AS REGARDS INVESTMENT IN SHARES OF SHRIRAM TRANSPO RT FINANCE COMPANY LIMITED ONE OF ASSESSEES GROUP CO NCERNS IT IS I.T.A. NO. 1476/MDS/2013 4 NOT DISPUTED THAT THE INVESTMENTS HAVE BEEN MADE BY THE ASSESSEE TO BROADEN THE CAPITAL AND LIQUIDITY BASE OF THE GROUP COMPANY AND AS A MATTER OF COMMERCIAL EXPEDIENCY. THUS IT CAN BE INFERRED THAT INVESTMENTS WERE MADE NOT TO EARN DIVIDEND BUT AS BUSINESS INVESTMENT. 6. THE TRIBUNAL IN ITA NOS. 638 639 & 640/MDS/2012 IN CASE OF SHRIRAM CAPITAL LIMITED (ONE OF ASSESSEES GROUP COMPANIES) DECIDED ON 04-02-2013 HELD THAT THE INVESTMENTS WER E BEING MADE AS BUSINESS PROPOSITION. THE TRIBUNAL WHILE COMING TO SUCH A CONCLUSION REFERRED TO ITS EARLIER DECISION RENDERE D IN ASSESSEES OWN CASE FOR EARLIER AY I.E. 2002-03 AND DELETED T HE DIS- ALLOWANCE MADE U/S. 14A. KEEPING IN LINE WITH THE EARLIER VIEW OF THE TRIBUNAL WE DISMISS THIS APPEAL OF THE REVENUE AND CONFIRM THE ORDER OF CIT(APPEALS). ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY THE 1 ST OCTOBER 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 1 ST OCTOBER 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR