DCIT, New Delhi v. M/s Solaris Chemtech Inds. Ltd.,, New Delhi

ITA 3279/DEL/2013 | 2009-2010
Pronouncement Date: 12-11-2014 | Result: Dismissed

Appeal Details

RSA Number 327920114 RSA 2013
Assessee PAN AABCB7121R
Bench Delhi
Appeal Number ITA 3279/DEL/2013
Duration Of Justice 1 year(s) 5 month(s) 19 day(s)
Appellant DCIT, New Delhi
Respondent M/s Solaris Chemtech Inds. Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 12-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 12-11-2014
Date Of Final Hearing 03-11-2014
Next Hearing Date 03-11-2014
Assessment Year 2009-2010
Appeal Filed On 23-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI H. S. SIDHU JUDICIAL MEMBER AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER I.T.A. NO. 3279/DEL/2013 ASSESSMENT YEAR : 2009-10 DCIT CIRCLE 9(1) VS. M/S. SOLARIS CHEMTECH INDU S.LTD. NEW DELHI. (EARLIER KNOWN AS SOLARIS BIO CHEMICALS LTD. ) 124 THAPAR HOUSE JANPATH NEW DELHI GIR / PAN:AABCB7121R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BRR KUMAR SR. DR RESPONDENT BY : SHRI AKHIL MAHAJAN CA ORDER PER T.S. KAPOOR AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R OF LD. CIT(A) DATED 04.02.2013. THE ONLY GROUND RAISED BY THE REVENUE IS THE ACTION OF LD. CIT(A) BY WHICH HE HAD DIRECTED THE A.O. TO REWORK ON AMOUNT OF DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE INCOM E TAX RULES IN ACCORDANCE WITH LAW AS LAID DOWN BY HON'BLE DELHI H IGH COURT IN THE CASE OF MAXOPP. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE EARN ED DIVIDEND INCOME OF RS.17 18 606/- AGAINST WHICH THE ASSESSEE ITSELF MA DE DISALLOWANCE FOR AN AMOUNT OF RS.8 45 587/- U/S 14A OF THE ACT. HOWEVE R THE A.O. WAS NOT SATISFIED WITH THE DISALLOWANCE AND HE ARRIVED AT A DISALLOWANCE OF RS.21 88 061/- AS PER COMPUTATION MADE BY HIM AT PA GE 3 OF HIS ORDER. ITA NO3279./DEL/2013 2 3. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND SUBMITTED THAT OUT OF TOTAL INTEREST EXPENDITURE CONSIDERED B Y A.O. FOR DISALLOWANCE U/S 14A INTEREST OF RS.25 77 15 327/- WAS NOT ATTRIBU TABLE TO EARNING OF EXEMPT INCOME AS THE SAME WAS NOT DEBITED TO THE P & L ACC OUNT BUT WAS CAPITALIZED DURING THE YEAR. IT WAS FURTHER SUBMITTED THAT NSC THE INCOME OF WHICH IS NOT EXEMPT HAS BEEN INCLUDED IN THE TOTAL ASSETS FO R THE PURPOSE OF CALCULATION UNDER RULE 8D AND FURTHER OUT OF TOTAL ASSETS THE A.O. HAD REDUCED CURRENT LIABILITIES FOR THE PURPOSE OF ARRI VING AT THE VALUE OF TOTAL ASSETS WHICH IS NOT IN ACCORDANCE WITH LAW. LD. C IT(A) ON THE BASIS OF SUBMISSIONS AND RELYING UPON THE CASE LAW OF MAXOPP 64 DTR 122 REMITTED BACK THE FILE TO THE A.O. AND DIRECTED HIM TO CALCU LATE THE DISALLOWANCE AS PER THE DECISION IN CASE OF MAXOPP. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE OUTSET LD. D.R. SUBMITTED THAT THE A.O. HAS NOT YET PASSED ORDER IN VIEW OF THE DIRECTION OF LD. CIT(A). THER EFORE THIS CASE MAY BE DECIDED AFTER THE ORDER IS PASSED. HOWEVER LD. A. R. POINTED OUT THAT THE A.O. HAS CLEARLY COMMITTED AN ERROR WHILE ARRIVING AT THE AMOUNT OF TOTAL INTEREST FOR THE PURPOSE OF DISALLOWANCE AND SUBMIT TED THAT AN AMOUNT OF RS.25.77 CRORES OUT OF TOTAL INTEREST OF RS.49.18 C RORES WAS CAPITALIZED DURING THE YEAR AND WAS NOT DEBITED TO P & L ACCOUN T WHEREAS THE A.O. HAS CALCULATED THE DISALLOWANCE FROM WHOLE AMOUNT OF RS .49.18 CRORES. LD. A.R. INVITED OUR ATTENTION TO PAGE 6 OF CIT(A)S OR DER WHERE COMPARATIVE CALCULATION OF DISALLOWANCE AS PER ORDER AND AS PER ASSESSEE COMPANY IS PLACED. 5. WE HAVE HEAD RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND FROM THE COMPARATIVE CHART PLAC ED AT PAGE 6 OF THE ITA NO3279./DEL/2013 3 CIT(A)S ORDER THAT A.O. HAS CALCULATED THE AMOUNT OF DISALLOWANCE OUT OF ENTIRE INTEREST AT RS.20 53 733/- ASSUMING THE WHOL E INTEREST OF RS.49.18 CRORES AS REVENUE EXPENDITURE. WHEREAS ASSESSEE H AD CLAIMED THAT OUT OF TOTAL INTEREST ONLY INTEREST DEBITED WAS RS.23.40 CRORES. THEREFORE DISALLOWANCE IF ANY COULD HAVE BEEN MADE ONLY OUT O F NET INTEREST DEBITED IN P & L ACCOUNT. WE ARE IN AGREEMENT WITH THE SUBMIS SIONS OF THE ASSESSEE THAT A.O. HAS GROSSLY MISCALCULATED THE DISALLOWANC E AS REGARDS INTEREST. MOREOVER LD. CIT(A) HAS ONLY DIRECTED THE A.O. TO RECALCULATE THE DISALLOWANCE AS PER THE PROVISIONS OF RULE 14A READ WITH RULE 8D AND IN ACCORDANCE WITH LAW SET OUT BY MAXOPP AND PRIMA FAC IE THERE IS NO GRIEVANCE CAUSED TO THE REVENUE. 6. IN VIEW OF THE ABOVE APPEAL FILED BY THE REVENU E IS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH NOV. 2014. SD./- SD./- (H. S. SIDHU) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 12 TH NOV. 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DEL HI. TRUE COPY. BY ORDER (ITAT NEW DELHI). ITA NO3279./DEL/2013 4 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER