Deputy Commissioner Of Income Tax, Circle- 1(2)(1), Bangalore v. Sri Guardian Souharda Bank Niyamita, Bangaluru

ITA 1526/BANG/2019 | 2015-2016
Pronouncement Date: 27-11-2019 | Result: Dismissed

Appeal Details

RSA Number 152621114 RSA 2019
Assessee PAN AAAAG0949D
Bench Bangalore
Appeal Number ITA 1526/BANG/2019
Duration Of Justice 5 month(s) 5 day(s)
Appellant Deputy Commissioner Of Income Tax, Circle- 1(2)(1), Bangalore
Respondent Sri Guardian Souharda Bank Niyamita, Bangaluru
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-11-2019
Last Hearing Date 26-11-2019
First Hearing Date 26-11-2019
Assessment Year 2015-2016
Appeal Filed On 21-06-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN ACCOUNTANT MEMBER AND SMT. BEENA PILLAI JUDICIAL MEMBER ITA NO.1526/BANG/2019 ASSESSMENT YEAR : 2015-16 THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-1(2)(1) BENGALURU. VS. SRI GUARDIAN SOUHARDA BANK NIYAMITA NO.139 KALPTHRU BAZAR BUILDING INFANTRY ROAD SHIVAJINAGAR BENGALURU-560 001. PAN AAAAG 0949 D. APPELLANT RESPONDENT APPELLANT BY : SMT. RENUGA J.C.I.T RESPONDENT BY : SHRI M GANDHI C.A DATE OF HEARING : 26.11.2019 DATE OF PRONOUNCEMENT : 27.11.2019 O R D E R PER B.R BASKARAN : THE REVENUE HAS FIELD THIS APPEAL CHALLENGING THE O RDER DATED 25/3/2019 PASSED BY LD CIT(A)-I BENGALURU AND IT RE LATES TO ASST. YEAR 2015-16. 2. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD C IT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO U/S 14A OF THE ACT. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E FACTS RELATING TO THE ISSUE UNDER CONSIDERATION ARE THAT THE AO NOTICED THAT THE ASSESSEE HAS INVESTED ITS FUNDS IN VARIOUS CATEGORIES OF ITA NO.1526 /BANG/2019 PAGE 2 OF 5 MUTUAL FUNDS AND EARNED EXEMPT INCOME. HOWEVER THE ASSESSEE DID NOT MAKE ANY DISALLOWANCE U/S 14A OF THE ACT. THE AO NOTICED THAT THE ASSESSEE HAS INVESTED A SUM AGGREGATING 53 .65 CRORES IN VARIOUS MUTUAL FUNDS AND WITHDRAWN THE SAME DURING THE FINANCIAL YEAR ITSELF. HENCE OPENING AND CLOSING BALANCE OF INVESTMENT WAS NIL. 4. THE AO NOTICED THAT THE ASSESSEE HAS PAID TOTAL INTEREST OF RS.6.16 CRORES ON THE DEPOSIT AMOUNT OF RS.84.07 CR ORES COLLECTED BY IT. ACCORDINGLY HE WORKED OUT THE AVERAGE RATE OF INTEREST PAID BY THE ASSESSEE PER MONTH ON THE DEPOSITS AT 0.61%. T HE AO APPLIED THE ABOVE SAID RATE OF 0.61% PER MONTH ON THE INVES TMENTS MADE IN MUTUAL FUNDS BY CONSIDERING THE PERIOD OF HOLDING A ND WORKED OUT INTEREST AMOUNT OF RS.1.73 CRORES. HE HELD IT TO B E DIRECTLY RELATED TO THE INVESTMENT MADE BY THE ASSESSEE. ACCORDINGL Y HE DISALLOWED A SUM OF RS.1.73 CRORES U/S 14A OF THE ACT. 5. THE LD CIT(A) NOTICED THAT THE ASSESSEE HAS MADE INVESTMENTS IN VARIOUS MUTUAL FUNDS SCHEME CHRONOLOGICALLY I.E . MATURING ONE INVESTMENT AND INVESTING THE MATURITY PROCEEDS IN A NOTHER MUTUAL FUND I.E THE ENTIRE AMOUNT OF RS.53.65 CRORES WER E NOT MADE AT A TIME. ACCORDINGLY HE NOTICED THAT THE PEAK AMOUNT OF INVESTMENTS OUTSTANDING AT ANY GIVEN POINT OF TIME WAS 7.35 CR OERS. THE LD CIT(A) ALSO NOTICED THAT THE ASSESSEE WAS HAVING O WN CAPITAL OF 3.77 CRORES AND RESERVE FUND OF 14.52 CRORES. ACCO RDINGLY AGGREGATING AMOUNT OF OWN FUNDS AVAILABLE WITH THE ASSESSEE WAS RS.18.20 CRORES WHICH WAS MORE THAN THE PEAK AMOUNT OF INVESTMENT OF RS.7.35 CRORES. BESIDES THE ABOVE T HE LD CIT(A) ALSO ITA NO.1526 /BANG/2019 PAGE 3 OF 5 NOTICED THAT THE AMOUNT OF LOAN GIVEN BY THE ASSESS EE DEPOSITS KEPT WITH THE OTHER BANKS AND SLR INVESTMENTS IN AGGREG ATE HAS EXCEEDED THE DEPOSIT AMOUNT OF RS.80.07 CROERS CON SIDERED BY AO FOR WORKING OUT THE DISALLOWANCE. ACCORDINGLY HE G AVE A FINDING THAT THE DEPOSITS AMOUNT RECEIVED BY THE ASSESSEE A RE IN NO WAY CONNECTED TO THE INVESTMENTS MADE BY THE ASSESSEE. ACCORDINGLY HE DELETED THE DISALLOWANCE MADE BY THE AO UNDER RULE 8D RULE R.W.S 14A OF THE ACT. 6. THE LD DR SUPPORTED THE ORDER PASSED BY THE AO A ND THE LD AR SUPPORTED THE ORDER PASSED BY THE LD CIT(A). 7. HAVING HEARD THE RIVAL CONTENTIONS WE ARE OF TH E VIEW THAT THE ORDER PASSED BY THE LD CIT(A) DOES NOT CALL FOR ANY INFERENCE SINCE A) THE LD CIT(A) HAS GIVEN A FINDING THAT THE OWN FUND S AVAILABLE WITH THE ASSESSEE HAS EXCEEDED THE VALUE OF INVESTMENTS AND HENCE AS PER THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF RELIANCE INDUS TRIES LTD (CIVIL APPEAL NO.10 OF 2019 DATED 02-01-2019) NO DISALLOWANCE OUT OF INTEREST EXPENDITURE IS CALLED FOR U/S 14A OF THE ACT. B) THE LD CIT(A) HAS ALSO ANALYZED THE BALANCE SHEET O F THE ASSESSEE AND HAS GIVEN A FINDING THAT THE DEPOSITS OF RS.80.07 CRORES COLLECTED BY THE ASSESSEE WAS USED FOR THE PURPOSE OF ITS BUSINESS AND IT IS NOT CONNECTED TO THE ITA NO.1526 /BANG/2019 PAGE 4 OF 5 INVESTMENTS MADE BY THE ASSESSEE WHICH YIELDED EXEM PT INCOME. ACCORDINGLY WE CONFIRM THE ORDER PASSED BY THE LD C IT(A). 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE DATED 27 TH NOVEMBER 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT BANGALORE. ITA NO.1526 /BANG/2019 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED