ACIT, C-4(1), Chandigarh v. M/s Winsome Textile Industries Ltd., Chandigarh

ITA 373/CHANDI/2018 | 2014-2015
Pronouncement Date: 31-08-2021 | Result: Dismissed

Appeal Details

RSA Number 37321514 RSA 2018
Assessee PAN AAACW1910G
Bench Chandigarh
Appeal Number ITA 373/CHANDI/2018
Duration Of Justice 3 year(s) 5 month(s) 4 day(s)
Appellant ACIT, C-4(1), Chandigarh
Respondent M/s Winsome Textile Industries Ltd., Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-08-2021
Date Of Final Hearing 24-08-2021
Next Hearing Date 24-08-2021
Last Hearing Date 01-10-2018
First Hearing Date 23-03-2021
Assessment Year 2014-2015
Appeal Filed On 27-03-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B CHANDIGARH BEFORE SHRI N.K. SAINI VICE PRESIDENT & SHRI R.L NEGI JUDICIAL MEMBER ./ ITA NO. 373/CHD/2018 / ASSESSMENT YEAR : 2014-15 THE ACIT CIRCLE 4(1) CHANDIGARH M/S WINSOME TEXTILES INDUSTRIES LTD. SCO 191-192 SECTOR: 34A CHANDIGARH ./PAN NO: AAACW1910G / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SHRI TEJ MOHAN SINGH ADVOCATE / REVENUE BY : SH. ASHOK KHANNA ADDL. CIT % /DATE OF HEARING : 24.08.2021 % / DATE OF PRONOUNCEMENT : 31.08.2021 / ORDER PER R.L. NEGI JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 18.01.2018 PASSED BY COMMISSIONER OF INCOME T AX (APPEALS)-2 CHANDIGARH [FOR SHORT THE CIT(A)] U/ S 143(3) OF THE ACT WHEREBY THE LD. CIT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE INCOME TAX ACT 1961 [FOR SHORT THE ACT] F OR THE ASSESSMENT YEAR 2014-15. ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONS IDERATION DECLARING NIL INCOME. THE CASE WAS SELECTED FOR SCR UTINY AND THE AO PASSED ASSESSMENT ORDER U/S 143(3) OF THE ACT DE TERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 15 57 70 453/- AFTER MAKING ADDITION OF RS. 2 06 81 641/- ON ACCOUNT OF DISALLO WANCE U/S 40(A)(I) OF THE ACT FOR NON-DEDUCTION OF TDS ADDIT ION OF RS.38 307/- ON ACCOUNT OF DISALLOWANCE MADE U/S 36( 1) (VA) OF THE ACT FOR NOT DEPOSITING THE EMPLOYEES CONTRIBUTION WELFARE FUNDS BEFORE THE DUE DATE AND ADDITION OF RS. 20 973/- ON ACCOUNT OF DISALLOWANCE U/S 14 A OF THE ACT. HOWEVER AFTER AL LOWING SET OFF THE UNABSORBED DEPRECIATION FOR THE AY 2008-09 AND 2009-10 INCOME OF THE ASSESSEE WAS COMPUTED AS NIL. THE ASS ESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE SET ASIDE THE ASS ESSMENT ORDER AND DELETED THE ADDITIONS. AGAINST THE SAID FINDING S OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE THIS TRIBUN AL. 3. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS: - I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) HAS NOT ERRED IN ALLOWING APPEA L OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A)HAS NOT ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AND DELETING THE ADDITION OF RS. 2 06 81 6 41/- DESPITE THE FACT THAT THE ASSESSEE FAILED TO DEDUCT TAXES A T SOURCE U/S 195 ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 3 OF THE ACT ON THE PAYMENTS MADE TO NON-RESIDENTS WI THOUT APPRECIATING THE FACT THAT INCOME ACCRUED IN INDIA AND THE ASSESSEE WAS UNDER STATUTORY OBLIGATION TO DEDUCT T AX AT SOURCE. (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) IS CORRECT IN DELETING THE ADDI TIONS MADE U/S 36(L)(VA) OF THE IT ACT 1961 ON ACCOUNT OF EMPLOY EE SHARE PAID AFTER DUE DATE WHEREIN THE CBDT HAS GIVEN CLARIFICA TION REGARDING APPLICABILITY OF SECTION 43-B THAT THIS C IRCULAR DOES NOT APPLY TO CLAIM OF DEDUCTION RELATING TO EMPLOYE E'S CONTRIBUTION TO WELFARE FUNDS WHICH ARE GOVERNED BY SECTION 36(L)(VA) OF THE I.T.ACT. (IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS NOT ERRED IN LAW AND FACT IN IGNORING TH E LEGISLATIVE INTENT EXPRESSED IN CBDT'S CIRCULAR NO.5/2014 DATED 11.02.2014 WHICH EXPLICITLY STATES THAT EXPENSES RE LATABLE TO EARNING OF EXEMPT INCOME HAVE TO BE CONSIDERED FOR DISALLOWANCE IRRESPECTIVE OF THE FACT WHETHER ANY S UCH INCOME HAS BEEN EARNED DURING THE F.Y. OR NOT? V) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS NOT ERRED IN LAW IN FOLLOWING THE DECISI ON OF HON'BLE HIGH COURT IN LAKHANI MARKETING DECIDED FOLLOWING D ECISIONS IN THE CASE OF HERO CYCLES LTD. 323 ITR 204 AND CIT V S. WINSOME TEXTILE INDUSTRIES LTD. 319 ITR 204 WHOSE FACTS WE RE DISTINGUISHABLE FROM THE TAXPAYERS IGNORING THE PR INCIPAL LAID DOWN BY HON'BLE SUPREME COURT DECISION IN CIT VS. W ALFORD SHARE AND STOCK BROKERS P LTD: 326 ITR 1 (SC). VI) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS NOT ERRED IN LAW AND FACT IN IGNORING LE GISLATIVE INTENT TO UPHOLD WHICH THE DEPARTMENT IS IN SLP IN SEVERAL CASES ON THIS ISSUE (NILGIRI INFRASTRUCTURE DEVELOPMENT L TD. ITA NO. 135 OF 2016 A.Y. 2009-10 OF DELHI HIGH COURT AND IN STANT HOLDING LTD. ITA NO. 2168 OF 2011 OF JURISDICTIONAL HIGH COURT)? VII) IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE S ET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 4. GROUND NO.(I) OF THE REVENUES APPEAL IS GENERAL THEREFORE DOES NOT REQUIRE SPECIFIC ADJUDICATION. 5. VIDE GROUND NO.(II) THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 2 06 81 641/- MADE BY THE AO FOR NON-DEDUCTION OF TAX AT SOURCE. THE LD. DEPARTM ENTAL REPRESENTATIVE ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 4 (DR) POINTED OUT BEFORE US THAT THE ASSESSEE HAD PA ID EXPORT COMMISSION AMOUNTING TO RS. 2 06 81 641/- TO NON-RESIDENTS HO WEVER DID NOT DEDUCT THE TAX AT SOURCE. THE LD. DR FURTHER SUBMIT TED THAT THE LD. CIT(A) HAS DELETED THE ADDITION IGNORING THE FACT T HAT SINCE THE INCOME HAD ACCRUED IN INDIA THE ASSESSEE WAS REQUIRED TO D EDUCT TAX AT SOURCE UNDER THE PROVISIONS OF THE ACT. THE PAYMENTS WERE MADE ON THE BASIS OF CONTRACT ENTERED INTO BY THE ASSESSEE COMPANY WI TH THE COMMISSION AGENTS. HENCE THE COMMISSION RECEIVED BY THE NON- RESIDENTS IS DEEMED INCOME IN INDIA. SINCE THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS OF SECTION 195 OF THE ACT THE LD. CIT(A ) HAS WRONGLY DELETED THE ADDITION MADE BY THE AO UNDER THE PROVISIONS OF SECTION 40 (A)(I) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOURCE. ACCORDI NGLY THE LD. DR SUBMITTED THAT THE IMPUGNED ORDER MAY BE SET ASIDE. 6. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT CHANDIGARH IN THE CASE OF IDS INFOTECH LIMITED (2016) 69 TAXMAN.COM 393 AND SINCE THE LD. CIT(A) HAS DECIDED THIS ISSUE BY FOLLOWING THE DECISION OF THE JURISDICTIONAL TRIBUN AL THERE IS NO INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE AO HOLDING AS UNDER: - ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 5 5.3 THE TAXABILITY IN INDIA OF PAYMENT OF COMMISSION AND LEGAL AND PROFESSIONAL CHARGES MADE TO NON-RESIDENT ENTITIES BY AN INDIAN COMPANY WERE CONSIDERED AND DECIDED IN FAVOUR OF TH E ASSESSEE BY HON'BLE ITAT IN THE SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF IDS INFOTECH LTD. (2016) 69 TAXMAN.COM 393. THE CIT (AP PEALS)-2 GURGAON VIDE HIS ORDER FOR ASSESSMENT YEAR 2012-13 IN THE C ASE OF THE APPELLANT IN APPEAL NO. 99/11/2014-15 AND CIT(A)-2 CHANDIGARH VIDE HIS ORDER DATED 01.09.2017 IN APPEAL NO 276/2/15-16 FOR ASSESSMENT YEAR 2013-14 DECIDED THE ISSUE AFTER CONSIDERING THE AFO RESAID DECISION OF THE ITAT CHANDIGARH BENCH AND ALSO CONSIDERED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CE NTRE (P) LTD. VS CIT (2010) 327 ITR 456 / 193 TAXMAN 234 17.THE ISSU E WAS DECIDED AS UNDER:- ' THE AFORESAID DECISION OF HON'BLE SUPREME COURT HAS DISCUSSED OF CASE LAW OF TRANSMISSION CORPORATION WHICH HAS BEEN DISTINGUISHED ON THE FACTS THAT IN THAT CASE THERE WAS A COMPOSITE CONTR ACT HAVE BEARINGS IN INDIA. IN THE PRESENT CASE THE EN TIRE ACTIVITY OF SALES DONE BY THE RESPECTIVE COMMISSION AGENTS IS OUTSIDE THE TERRITORIES OF INDIA. THE ARGUMENT OF THE ASSESSING OFFICER THAT THE SALES PERTAIN TO INDIAN ENTITY DOES NOT HOLD GOOD GROUND BECAUSE BY THAT ANALOGY EACH AND EVERY SALE WOULD BECOME TAXABLE IN INDIA. IN CONSIDERATION OF THE DECIDED CASES AS ABOVE AND THE FACTS OF THE PRESENT CASE IT CAN BE CONCLUDED THAT SINCE THERE EXISTS N O INCOME CHARGEABLE TO TAX HAVING ACCRUED OR ARISEN T O THE FOREIGN COMMISSION AGENTS IN INDIA THEREFORE PROVISIONS OF TAX WITHHOLDING ARE NOT APPLICABLE. UNDER SUCH CIRCUMSTANCES THERE WAS NO DEFAULT AS CONTEMPLATED UNDER SECTION 40(A)(IA) OF INCOME TAX ACT. THE GROUND OF APPEAL IS ALLOWED.' I AM IN AGREEMENT WITH THE FINDINGS OF CIT(A)-2 GU RGAON AND MY PREDECESSOR THAT THE APPELLANT IS NOT LIABLE TO DEDUCT TDS UNDER THE PROVISIONS OF SECTION 195 OF THE ACT AND THEREFORE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 40(A)(I) OF RS. 2 06 81 641/- IS DELETED. THE GROUND OF APPEAL NO. 1 TAKEN BY THE A SSESSEE IS ALLOWED. 8. AS POINTED BY THE LD. COUNSEL THIS ISSUE IS COV ERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT IN THE CASE O F IDS INFOTECH LTD. (SUPRA) AND THE FINDINGS OF THE LD. CIT(A) ARE IN A CCORDANCE WITH THE DECISION OF TRIBUNAL. FURTHER THE LD. CIT(A) HAS F OLLOWED THE DECISION ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 6 OF THE CIT(A) GURGAON IN THE ASSESSEES OWN CASE FO R THE A.Y. 2012-13 AND HIS PREDECESSOR CIT(A) CHANDIGARH-2 IN ASSESSE ES OWN CASE FOR A.Y. 2013-14. SINCE THE LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE ITAT WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A). HENCE WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE AND UP HOLD THE FINDINGS OF THE LD. CIT(A). 9. VIDE GROUND NO. (III) THE REVENUE HAS CHALLENGE D THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE U/S 36 (1) (VA) OF THE ACT ON ACCOUNT OF EMPLOYEES SHARE PAID AFTER DUE DATE. THE LD. DR SUBMITTED BEFORE US THAT SINCE THE ASSESSEE COMPANY HAD NOT DEPOSITED THE EMPLOYEES CONTRIBUTION TO WELFARE FUNDS BEFORE THE DUE DATE THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION MADE BY THE AO. 10. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS MARK AUTO INDUSTRIES LTD. 358 ITR 43 AND THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF HOTEL SURYA VS DCIT ITA NOS. 133 & 134/CHD/2021 AND THE LD. CIT(A) HAS DECIDED THE ISSUE BY FOLLOWI NG THE RATIO LAID DOWN BY THE HON'BLE HIGH COURT IN TH E AFORESAID CASE THERE IS NO MERIT IN THIS GROUND OF APPEAL OF THE R EVENUE. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES. THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 7 ADDITION OF RS. 38 307/- MADE BY THE AO U/S 36(1)(V A) OF THE ACT ON ACCOUNT OF NON-PAYMENT OF EMPLOYEES CONTRIBUTION TO WELFARE FUNDS ON OR BEFORE THE DUE DATE AS PER THE RELEVANT ACT. TH E LD. CIT(A) HAS DELETED THE ADDITION HOLDING AS UNDER: - 6.1 DURING THE ASSESSMENT PROCEEDINGS ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAS NOT DEPOSITED EMPLOY EES CONTRIBUTION TO WELFARE FUNDS AGGREGATING TO RS. 38 307/-. THE ASSESSEE WAS CONFRONTED AS TO WHY DISALLOWANCE OF LATE PAYMENTS MADE ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO WELFARE FUNDS NOT BE MADE. THE ASSESSEE FILED HIS R EPLY. AS POINTED OUT BY THE LD. COUNSEL THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BUT WAS FOUND UNACCEPTABLE BY THE AO. HENCE AO DISALLOWED AMOUNT OF RS. 38 307/- U/S 36(1)(VA) OF THE I.T. ACT. 6.2 DURING THE COURSE OF APPELLATE PROCEEDINGS APPE LLANT MADE SUBMISSION AS UNDER:- DISALLOWANCE U/S 36(1) (VA) OF THE INCOME TAX ACT 1961 AMOUNTING TO RS. 38307/-. THE ASSESSEE HAS DEPOSITED ESI/PF LAST AS PER THE RESPECTIVE ACT BUT BEFORE TH E DUE DATE OF FILING OF THE RETURN. THE AO DISALLOWED SA ME IN VIEW OF THE PROVISION U/S 36(1)(VA) OF THE INCOME T AX ACT 1961. SINCE THE SAME WAS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN NO ADDITION IS CALLED FOR IN VIEW OF THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS MARK AUTO INDUSTRIES LTD 358 ITR 43 HAS HELD THAT IN THE CASE OF EMPLOYEES SHARE OF ESI/PF IS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN THE SAME IS ADMISSIBLE. THE ADDIT ION BEING UNJUSTIFIED DESERVES TO BE DELETED. 6.3 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND ORDER OF THE AO. THE CASE OF THE ASSESSEE IS DIRECT LY COVERED BY THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS MARK AUTO INDUSTRI ES LTD 358 ITR 43 (P&H). SINCE IN THE PRESENT CASE THE ASSESSE E HAS DEPOSITED THE ESI/PF BEFORE THE DUE DATE OF FILING OF THE RETURN RESPECTFULLY FOLLOWING THE DECISION OF MARK AUTO IN DUSTRIES ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 8 (SUPRA) THE ADDITION MADE BY THE AO IS DELETED. GROUND OF APPEAL NO. 2 IS ALLOWED. 12. SINCE THIS ISSUE IS COVERED IN FAVOUR OF THE AS SESSEE BY THE JUDGEMENT OF THE HON'BLE COURT HIGH COURT AND THE C OORDINATE BENCH OF THE TRIBUNAL DISCUSSED ABOVE WE DO NOT FIND ANY IN FIRMITY IN THE FINDINGS OF THE LD. CIT(A). WE THEREFORE DISMISS THIS GROUND OF APPEAL OF THE REVENUE AND UPHOLD THE FINDINGS OF THE LD. C IT(A). 13. VIDE GROUND NO. (IV) (V) AND (VI) THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION O F RS. 20 973/- MADE U/S 14A OF THE ACT. THE LD. DR SUBMITTED BEFORE US THAT THE LD. CIT(A) HAS DELETED THE ADDITION MADE U/S 14A OF THE ACT IN VIOLATION OF THE PROVISIONS OF ACT AND THE VARIOUS JUDGEMENTS OF THE HON'BLE SUPREME COURT AND THE HIGH COURT. SINCE THE ASSESSEE HAD I NVESTED IN THE SHARES OF SHIVALIK SOLID WASTE MANAGEMENT LTD. AND HAD NOT MADE ANY SUE MOTO DISALLOWANCE THE AO HAS RIGHTLY MADE DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE INCOME TAX RULES. THE LD. DR AC CORDINGLY SUBMITTED THAT SINCE THE LD. CIT(A) HAS WRONGLY DEL ETED THE ADDITION THE IMPUGNED ORDER MAY BE SET ASIDE. 14. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT SINCE THE ASSESSEE HAD NOT RECEIVED ANY DIVIDEND ON INVESTMENT IN SHARES DURING THE YEAR RELEVANT ASSESSMENT YEAR THE LD. C IT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. THE LD. COUNS EL FURTHER SUBMITTED THAT THE FINDINGS OF THE LD. CIT(A) ARE BASED ON TH E RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS M/S ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 9 LAKHANI MARKETING [2014] 49 TAXMAN.COM 257 (P&H). HENCE THERE IS NO INFIRMITY IN THE ORDER PASSAGED BY THE LD. CIT(A ). 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL ON RECORD INCLUDING THE JUDGMENT OF THE HO N'BLE HIGH COURT RELIED UPON BY THE LD. CIT(A). THE LD. CIT(A) HAS D ECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: - 7.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSEL ALONG WITH THE CASE LAWS RELIED UPON BY THE ASSESSEE AND PURSUED THE OR DER OF THE ASSESSING OFFICER. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S LAKHANI MARKETING LNCL.[2014] 49 TAXMANN.COM 257 (P UNJAB & HARYANA) HAS HELD THAT UNLESS AND UNTIL THERE IS RECEIPT OF EXE MPTED INCOME FOR CONCERNED ASSESSMENT YEAR SECTION 14A CANNOT BE INVOKED. IN THE PRESENT CASE THERE IS NO INCOME WHICH IS EXEMPT THEREFORE RESPECTFULLY F OLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AD MADE BY THE AS SESSING OFFICER IS DELETED. THE GROUND OF APPEAL NO.3 IS ALLOWED. 16. WE NOTICE THAT THE ASSESSEE DURING THE COURSE O F APPELLATE PROCEEDINGS SPECIFICALLY PLEADED THAT IT HAD MADE I NVESTMENT IN THE SHARES WHICH WAS MADE OUT OF THE INTERNAL ACCRUALS AND NOT OUT OF BORROWED FUNDS HOWEVER NO DIVIDEND WAS RECEIVED O N THE SAID INVESTMENT. FURTHER AS POINTED OUT BY THE LD. COUN SEL THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE JUDGEMENT OF THE HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/S LAKHANI MARKETING (SUPRA) WHEREIN IT HAS BEEN HELD THAT UNLESS AND UNTIL THER E IS RECEIPT OF EXEMPT INCOME DURING THE YEAR RELEVANT TO THE ASSESSMENT Y EAR UNDER CONSIDERATION SECTION 14A CANNOT BE INVOKED. SINC E THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT WE D O NOT FIND ANY MERIT ITA NO. 373-CHD-2018 - M/S WINSOME TEXTILE INDUSTRIES LTD. CHANDIGARH 10 IN THE CONTENTION OF THE REVENUE THAT THE LD. CIT(A ) HAS WRONGLY DELETED THE ADDITION. WE THEREFORE DISMISS THIS GROUND O F APPEAL OF THE REVENUE AND UPHOLD THE FINDINGS OF THE LD. CIT(A). IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 31 ST AUG 2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 31.08.2021 .. -.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 %2 4 / DR ITAT CHANDIGARH 6. / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR