M/s. Milkfood Ltd., New Delhi v. DCIT, New Delhi

ITA 6109/DEL/2013 | 2008-2009
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 610920114 RSA 2013
Assessee PAN AAACM5913B
Bench Delhi
Appeal Number ITA 6109/DEL/2013
Duration Of Justice 1 year(s) 8 month(s) 18 day(s)
Appellant M/s. Milkfood Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 31-07-2015
Date Of Final Hearing 22-07-2015
Next Hearing Date 22-07-2015
Assessment Year 2008-2009
Appeal Filed On 12-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI A.T. VARKEY JUDICIAL MEMBER ITA NO.6109/DEL./2013 (ASSESSMENT YEAR : 2008-09) M/S. MILKFOOD LIMITED VS. DCIT CIRCLE 6 (1) 5 TH FLOOR BHANDARI HOUSE NEW DELHI. 91 NEHRU PLACE NEW DELHI. (PAN : AAACM5913B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI CA REVENUE BY : SHRI P. DAM KANUNJNA SENIOR DR DATE OF HEARING : 22.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER A.T. VARKEY JUDICIAL MEMBER : THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I X NEW DELHI DATED 30.09.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE REA D AS UNDER :- '1(I). THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING DISALLOWANCE OF RS.26 22 501/- U/S. 14A READ WITH RULE 8D WITHOUT A PPRECIATING THE FACT THERE WAS NO CASE OF ANY EXPENDITURE ATTRI BUTABLE TO CLAIM OF ANY EXEMPT INCOME. ITA NO.6109/DEL./2013 2 (II). THAT FINDING OF THE LOWER AUTHORITIES IS IN T OTAL DISREGARD TO PROVISIONS OF SEC. 14A(2)& (3) OF THE INCOME TAX ACT 1961 AND PRINCIPLE LAID DOWN BY DELHI HIGH COURT IN THE CASE OF M/S. MAXOPP INVESTMENT LTD. 347 ITR 272. 2. THAT THE IMPUGNED DISALLOWANCE IS ILLEGAL ARBI TRARY AND OR HIGHLY EXCESSIVE. 3. THAT ORDERS OF THE LOWER AUTHORITIES ARE NOT JU STIFIED ON FACTS AND SAME ARE BAD IN LAW.' 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY IS A PUBLIC LIMITED COMPANY INCORPORATED UNDER THE COMPANIES AC T 1956 INTER ALIA CARRYING ON THE BUSINESS OF MANUFACTURE AND SALE OF PURE GHEE SKIMMED MILK POWDER WHOLE MILK POWDER ETC. UNDER THE NAME AND STYLE OF 'MILK FOOD'. THE ASSESSEE COMPANY IS SUPPLYING SKIMMED MI LK POWDER TO MAJOR INSTITUTIONS I.E. NESTLE SKB WOCKHARDT MOT HER DAIRY ETC. THE ASSESSEE FILED RETURN OF INCOME ON 30.09.2008 DECLA RING NIL INCOME. THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME- TAX AC T 1961 (HEREINAFTER 'THE ACT'). SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICE U/S 143(2) WAS DULY SERVED UPON THE ASSESSEE . THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 13.09.2010 B Y THE AO AT THE NIL INCOME MAKING THE FOLLOWING ADDITIONS: I) EPF & ESI U/S 2(24 )(X) OF THE ACT RS. 1 74 4 45/- II) DISALLOWANCE U/S 14A RS.26 31 080/- III) INTEREST ON AMOUNTS ADVANCED TO SUBSIDIARY COMPANY RS. 7 23 148/- 4. SINCE THE ADDITIONS MADE ALSO RESULTED INTO LOSS THE AO COMPUTED TAX ITA NO.6109/DEL./2013 3 PAYABLE AS PER SECTION 115JB OF THE ACT AFTER ADDI NG DISALLOWED AMOUNT TO BOOK PROFIT. AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) AND THE CIT (A) CONFIRMED THE DISALLOWANCE U/S 14A OF R S.26 22 50 1/- OUT OF RS.26 31 080/- THEREBY GIVING A RELIEF OF RS.8 579/ -. 5. THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BEF ORE US AGAINST THE DISALLOWANCE OF RS.26 22 501/- UNDER SECTION 14A OF THE ACT. 6. LD. AR FOR THE ASSESSEE REITERATED THE SUBMISSI ONS MADE BEFORE THE LD. CIT (A). LD. AR ALSO STRESSED THAT IN THE RELEV ANT ASSESSMENT YEAR THE ASSESSEE WAS NOT IN RECEIPT OF ANY EXEMPT INCOME UN DER SECTION 14A READ WITH RULE 8D THEREFORE DISALLOWANCE WAS NOT APPLI CABLE. LD. AR ALSO SUBMITTED THAT ITAT DELHI BENCH 'A' NEW DELHI IN ITA NO.3298/DE1/2013 VIDE ORDER DATED 08.12.2014 IN THE REVENUE'S APPEAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2007-0 8 (PREVIOUS ASSESSMENT YEAR) ITSELF HAD DEALT THIS ISSUE AND THE REVENUE'S APPEAL ON THIS ISSUE WAS REJECTED. 7. ON THE OTHER HAND LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND P ERUSED THE MATERIAL ON RECORD. THE LD. AR OF THE ASSESSEE CONTENDED BEF ORE US THAT THE ASSESSEE WAS NOT IN RECEIPT OF ANY EXEMPT INCOME IN THE ASSE SSMENT YEAR UNDER CONSIDERATION THEREFORE DISALLOWANCE UNDER SECTI ON 14A READ WITH RULE 8D CANNOT BE MADE. THE LD. DR COULD NOT CONTROVERT THE FACT THAT THE ITA NO.6109/DEL./2013 4 ASSESSEE EARNED ANY EXEMPT INCOME IN THIS RELEVANT ASSESSMENT YEAR. WE ALSO FIND THAT ITAT DELHI BENCH 'A' IN ASSESSEE'S OWN CASE VIDE ORDER DATED 08.12.2014 (SUPRA) HAD REJECTED THIS ISSUE TA KEN BY THE REVENUE AND THE SAID ORDER WAS PASSED BY THIS BENCH. FOR THE SA KE OF CLARITY WE REPRODUCE THE RELEVANT FINDING OF THE AFORESAID ORD ER AS UNDER:- '4. APROPOS GROUND NO.1 LD. CIT(A) DELETED THE ADD ITION INTER ALIA OBSERVING THAT SINCE IN VIEW OF THE DEC ISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MANUFACTURING LTD. VS. DC IT 328 ITR 81 (ITA 3298/D EL/13 M/S MILK FOOD LTD. (BOM.) RULE 8D WAS NOT APPLICAB LE THEREFORE THE DISALLOWANCE MADE BY AO U/S 14A READ WITH RULE 8D COULD NOT BE UPHELD. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE HAD NOT EARNED ANY EXEMPT INCOME DURING THE YEAR. THERE FORE IN VIEW OF THE MATTER NO DISALLOWANCE COULD BE MADE U /S 14A. IN THIS REGARD LD. COUNSEL HAS RELIED ON FOLLOWING DE CISIONS:- HON'BLE DELHI HIGH COURT'S DECISION DATED 5-9-201 4 (ITA NOS.486/2014 & ITA NO.299/2014) IN THE CASE OF CIT VS. HOLCIM INDIA P. LTD. HON'BLE PUNJAB & HARYANA HIGH COURT'S DECISION IN CIT VS. M/S LAKHANI MARKETING INCL. (ITA NO. 970/2008 DECIDED ON 2.4.2014) HON'BLE PUNJAB & HARYANA HIGH COURT'S DECISION IN CIT VS. HERO CYCLES LTD. 323 ITR 518; AND HON'BLE PUNJAB & HARYANA HIGH COURT'S DECISION IN CIT VS. WINSOME TEXTILE INDUSTRIES LTD 319 ITR 204. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AFOREMENTIONED DECISIONS RELIED UPON BY THE ASSESSEE WHEREIN A CONSISTENT V IEW HAS BEEN TAKEN THAT WHERE NO EXEMPT INCOME IS EARNED THERE COULD NOT BE ANY DISALLOWANCE U/S 14A WE FIND NO MERIT IN TH E GROUND TAKEN BY THE REVENUE. ACCORDINGLY GROUND NO. 1 IS DISMISSED. ITA NO.6109/DEL./2013 5 9. THE CONTENTION OF THE ASSESSEE THAT IT HAS NOT E ARNED ANY EXEMPT INCOME IS NOT CONTROVERTED BY THE REVENUE THE RATI O OF THE DECISION CITED ABOVE APPLIES AND WE FIND FORCE IN THE CONTENTION O F THE LD. AR THAT NO DISALLOWANCE WAS WARRANTED U/S 14A OF THE ACT. RES PECTFULLY FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL WE DELETE T HE DISALLOWANCE MADE U/S 14A OF RS.26 22 501/-. THE GROUND IS ACCORDINGLY A LLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/- SD/- (S.V. MEHROTRA) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 31 ST DAY OF JULY 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IX NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.