Rajamani Rajkumar, CHENNAI v. DCIT, CHENNAI

ITA 1972/CHNY/2016 | 2008-2009
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 197221714 RSA 2016
Assessee PAN AEPPR7515C
Bench Chennai
Appeal Number ITA 1972/CHNY/2016
Duration Of Justice 3 month(s)
Appellant Rajamani Rajkumar, CHENNAI
Respondent DCIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-09-2016
Assessment Year 2008-2009
Appeal Filed On 30-06-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR JUDICIAL MEMBER ./I.T.A. NO. 1972/MDS/2016 / ASSESSMENT YEAR : 2008-2009 RAJAMANI RAJKUMAR NEW NO.9 CHAMBA CHANDRABAGH AVENUE 1 ST STREET MYLAPORE CHENNAI 600 004. [PAN AEPPR 7515C ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX BUSINESS CIRCLE CHENNAI. ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. V. SWAMINATHAN C.A. $% ! ' # /RESPONDENT BY : SHRI. SUPRIYO PAL JCIT. & ' '( /DATE OF HEARING : 29-09-2016 )* ' '( /DATE OF PRONOUNCEMENT : 30-09-2016 ! / O R D E R PER SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 11.03.2016 OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2 CHENNAI. ITA NO.1972/MDS/2016 :- 2 -: 2. ASSESSEE APPEAL HAS TAKEN ALTOGETHER FOUR GROUNDS OF WHICH GROUNDS NO. 1 & 4 ARE GENERAL IN NATURE NEEDING NO SPECIFIC ADJUDICATION. 3. FACTS APROPOS ARE THAT THE ASSESSEE AN INDIVIDUAL HAD FILED A RETURN DISCLOSING AN INCOME OF @22 65 880/- AND ASSESSMENT WAS COMPLETED U/S.143(3) OF THE INCOME TAX ACT 1961 (H EREIN REFERRED AS THE ACT) ON 7.12.2010. NOTICE U/S.148 OF THE ACT WAS ISSUED ON 28.03.2013 REOPENING THE ASSESSMENT AND ASSESSEE VI DE LETTER DATED 30.04.2013 REQUESTED LD. ASSESSING OFFICER TO TREAT ORIGINAL RETURN FILED BY HIM AS ONE FILED IN PURSUANCE TO SUCH NOTICE. A SSESSEE ALSO REQUESTED THE LD. ASSESSING OFFICER TO PROVIDE REAS ONS FOR REOPENING WHICH WAS DULY COMMUNICATED BY LD. ASSESSING OFFICE R. DURING THE COURSE OF THE RE-ASSESSMENT PROCEEDINGS THE LD. A SSESSING OFFICER NOTED THAT ASSESSEE HAD RECEIVED DIVIDEND INCOME OF @12 76 488/- WHICH WAS CLAIMED AS EXEMPT INCOME U/S.10(34) OF TH E ACT. IN THE ORIGINAL ASSESSMENT ASSESSEE HAD NOT MADE ANY DISA LLOWANCE U/S.14A OF THE ACT AGAINST SUCH INCOME. AS PER LD. ASSESSI NG OFFICER ASSESSEE FAILED TO MAKE A DISALLOWANCE AS CONTEMPLATED IN S EC.14A OF THE ACT IN RELATION TO THE EARNING TO THE ABOVE EXEMPT INCO ME. HE TREATED 10% OF THE EXEMPT INCOME AS EXPENDITURE INCURRED F OR EARNING SUCH INCOME. A DISALLOWANCE OF @1 27 648/- WAS MADE. ITA NO.1972/MDS/2016 :- 3 -: 4. AGGRIEVED THE ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). APART FROM A SSAILING THE REOPENING ASSESSEE ALSO SUBMITTED BEFORE LD. COMM ISSIONER OF INCOME TAX (APPEALS) THAT HE HAD NOT INCURRED ANY EXPENDITURE DIRECTLY OR INDIRECTLY FOR EARNING THE DIVIDEND IN COME. IN SO FAR AS REOPENING WAS CONCERNED CONTENTION OF THE ASSESSE E WAS THAT SUCH REOPENING WAS ATTEMPTED ON SAME SET OF FACTS WITHOU T ANY TANGIBLE NEW MATERIALS. LD. COMMISSIONER OF INCOME TAX (APP EALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WAS OF THE OPINION THAT REOPENING HAVING BEEN DONE WITHIN FOUR YEARS FROM T HE END OF THE IMPUGNED ASSESSMENT YEAR WAS NOT HIT BY FIRST PROVI SO OF SEC. 147 OF THE ACT. AS PER LD. COMMISSIONER OF INCOME TAX (APP EALS) THE REOPENING DONE WAS VALID. IN SO FAR AS MERIT OF T HE DISALLOWANCE WAS CONCERNED LD. COMMISSIONER OF INCOME TAX (APPEALS) WHILE CONCURRING WITH THE DECISION OF A CO-ORDINATE BENCH IN THE CASE SUPER AUTO FORGE (P) LTD VS. ACIT (2016) (157 ITD 0467) HELD THAT DISALLOWANCE OF DIRECT AND INDIRECT EXPENDITURE WAS INBUILT UP IN THE SCHEME OF COMPUTATION OF SUCH DISALLOWANCE U/S.14A OF THE ACT. HE SUSTAINED THE DISALLOWANCE. 5. NOW BEFORE US THE LD. AUTHORISED REPRESENTATIVE S TRONGLY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) SUBMITTED THAT NO NEW TANGIBLE EVIDENCE WAS PLACED BEFORE ASSESSING ITA NO.1972/MDS/2016 :- 4 -: OFFICER FOR QUALIFYING A REOPENING. APART FROM THA T AS PER LD. AUTHORISED REPRESENTATIVE LD. COMMISSIONER OF INCO ME TAX (APPEALS) HAVING PLACED RELIANCE ON THE DECISION OF CO-ORDINA TE BENCH IN THE CASE OF SUPER AUTO FORGE (P) LTD (SUPRA) FAILED TO FOLLOW IT. AS PER THE LD. AUTHORISED REPRESENTATIVE IN THE SAID DECISIONS THIS TRIBUNAL HAD RESTRICTED DISALLOWANCE U/S.14A OF THE ACT TO 2% OF THE EXEMPT INCOME CONSIDERING INTRODUCTION OF RULE 8D TO BE P ROSPECTIVE AND NOT APPLICABLE FOR THE ASSESSMENT YEAR 2008-2009. 6. .. PER CONTRA THE LD. DR STRONGLY SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE ORDERS OF THE AUTHORITIES BELOW. SO FAR AS REOPENIN G IS CONCERNED THERE IS NO DISPUTE THAT REOPENING WAS DONE WITHIN FOUR YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEAR. OBVIOUSLY F IRST PROVISO OF SEC. 147 OF THE ACT WAS NOT APPLICABLE. IN OTHER WORDS THERE WAS NO REQUIREMENT OF FAILURE TO MAKE FULL AND TRUE DISCL OSURE OF ALL MATERIAL PARTICULARS NECESSARY FOR THE ASSESSMENT TO BE AP PLIED AS A CRITERIA FOR ATTEMPTING THE REOPENING. IN THE CASE BEFORE US IN ORIGINAL ASSESSMENT THE LD. ASSESSING OFFICER HAD OMITTED T O CONSIDER APPLICATION OF SEC. 14A OF THE ACT DESPITE CLAIM OF EXEMPT DIVIDEND OF @12 76 488/-. WE DO NOT FIND ANY ERROR IN THE REOPE NING DONE FOR THE IMPUGNED ASSESSMENT YEAR. HOWEVER SO FAR AS QUANT UM OF ITA NO.1972/MDS/2016 :- 5 -: DISALLOWANCE IS CONCERNED EVEN IF WE CONSIDER RULE 8D TO BE PROSPECTIVE AND NOT APPLICABLE FOR IMPUGNED ASSESSM ENT YEAR SEC. 14A OF THE ACT WAS VERY MUCH THERE IN THE STATUTE. IN THE CASE OF SUPER AUTO FORGE (P) LTD (SUPRA ) ON WHICH RELIANCE HAS BEEN PLACED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TH E CO-ORDINATE BENCH HAD HELD THAT BY VIRTUE OF JUDGMENT OF THE DE LHI HIGH COURT IN THE CASE OF MAXOPP INVESTMENT LTD VS CIT 347 ITR 272 RULE 8D COULD ONLY BE CONSIDERED AS PROSPECTIVE AND PRIOR TO THAT DISALLOWANCE OF 2% OF EXEMPT INCOME COULD SUFFICE. WE ARE THEREFORE OF THE OPINION THAT FOR IMPUGNED ASSESSMENT YEAR DISALLOWANCE U/S.14A S HOULD BE RESTRICTED TO 2% OF EXEMPT DIVIDEND INCOME OF @12 7 6 488/-. IN OTHER WORDS DISALLOWANCE IN EXCESS OF @25 530/- STANDS D ELETED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY THE 30TH DAY OF SEPT EMBER 2016 AT CHENNAI. SD/- ( . ) (G. PAVAN KUMAR) $ % & / JUDICIAL MEMBER SD/- ( . ) (ABRAHAM P. GEORGE) ' % & / ACCOUNTANT MEMBER +& / CHENNAI / DATED: 30TH SEPTEMBER 2016 KV - ' $'./ 0/' / COPY TO: 1. ! / APPELLANT 3. 1' () / CIT(A) 5. /45 $'6 / DR ITA NO.1972/MDS/2016 :- 6 -: 2. $% ! / RESPONDENT 4. 1' / CIT 6. 57 8& / GF