Income Tax Appellate Tribunal - Ahmedabad
The Dcit, Sabarkantha Circle,, ... vs The Sabarkantha Dist.Co.Op.Milk ... on 27 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "A" BENCH
(BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
& SHRI S.S. GODARA, JUDICIAL MEMBER)
ITA. Nos: 2244 & 2245/AHD/2014
(Assessment Years 2010-11 & 2011-12)
The Deputy Commissioner V/S The Sabarkantha Dist. Co-
of Income-tax Sabarkantha op. Milk Producers Union
Circle, Himatnagar Ltd., Sabar Dairy, Boriya,
Himatnagar Dist:
Sabarkantha
(Appellant) (Respondent)
PAN: AAAAS5265L
Appellant by : Shri K. Madhusudan, Sr. D.R.
Respondent by : Shri Sanjay R. Shah, A.R.
(आदे श)/ORDER
Date of hearing : 25 -07-2017
Date of Pronouncement : 27-07-2017
PER N.K. BILLAIYA, ACCOUNTANT MEMBER
1. These two appeals by the Revenue are preferred against the order of the Ld. CIT(A)-VIII, Ahmedabad dated 22.05.2014 pertaining to A.Ys. 2010-11 & 2011-12.
2 ITA Nos. 2244 & 2245/Ahd/2014. A.Ys. 2010-11 & 2011-12
2. Since, the First Appellate Authority has decided the appeals by a consolidated order; therefore, both these appeals were heard together and are disposed of by this common order for the sake of convenience.
3. The common grievance of the revenue in both these appeals relate to the deletion of the addition being disallowance of interest and administrative expenditure by applying the provision of Section 14A read with Rule 8D out of deduction u/s. 80P(2)(d) of the Act.
4. At the very outset, the ld. counsel for the assessee drew our attention to the decision of the Hon'ble Jurisdictional High Court of Gujarat in the case of Sabarkantha District Cooperative Milk Producers Union Ltd. in Tax Appeal No. 473 of 2014 and stated that the impugned issue has been decided in favour of the assessee and against the revenue.
5. The ld. D.R. could not bring any distinguishing decision in favour of the revenue.
6. We have carefully considered the orders of the authorities below qua the issue. We find force in the contention of the ld. counsel. The Hon'ble Jurisdictional High Court had the occasion consider a similar issue in the case of Sabarkantha District Cooperative Milk Producers Union Ltd. (supra) wherein the Hon'ble High Court was seized with the following substantial question of law:-
"(i) Whether in facts and circumstances of the case, the learned ITAT has erred in law in confirming the order of CIT(A) deleting the addition of Rs.87,39,536/-
made by the assessing officer u/s 14A of Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules?
3 ITA Nos. 2244 & 2245/Ahd/2014. A.Ys. 2010-11 & 2011-12
(ii) Whether, in the facts and circumstances of the case, the learned ITAT has erred in law in holding to the effect that the provisions of section 14A does not apply to income for which deduction under Chapter VI-A (section 80A to 80U) of the Income Tax Act is available?
iii) Whether the words 'income which does not form part of total income under this Act' used in section 14A of the Income Tax Act, 1961 include the income which is not chargeable to tax pursuant to provisions of Chapter VIA (section 80A to 80U) of the Income Tax Act?"
7. And the Hon'ble High Court held as under:-
7. Question to be addressed is as to whether section 14A would apply to provision of Chapter VIA. Provision of section 14A when examined, it operates in respect of the income not forming part of the total income. It could be noted that provisions of Chapter VIA (sections 80A to 80U) refer to deductions to be made in computing the total income. Such deductions, in no manner, can be compared with the exempted income, which does not form part of the total income as provided in sections 10 to 13A under Chapter III of the Act. Section 14A was introduced retrospectively with effect from 1.4.1962 by Finance Act, 2001, for the purpose of computing the total income under Chapter IV. And, any expenditure incurred by the assessee in relation to exempted income, for the purpose of computing the total income, while applying section 14A, no deduction shall be allowed. However, there is a clear absence of any reference of deduction to be made in computing the total income as per provision of Chapter IVA in section 14A. Undoubtedly, as provided under Chapter VIA while computing the total income of the assessee from his gross total income in accordance with and subject to the provision of this chapter, the deductions specified are permissible.
As a resultant effect, the taxable income of the assessee would surely get reduced and yet there is marked difference between the exempted income and the deduction provided under Chapter VIA. We notice that the investment in 4 ITA Nos. 2244 & 2245/Ahd/2014 . A.Ys. 2010-11 & 2011-12 shares made by the assessee who earned him the dividend was from his own income. Moreover, from the very provision of section 14A, the same would have no application in respect of the income not being taxable on account of deduction under section 80P(2) (d) . Both the authorities have rightly held that there is no application of section 14A as far as the deduction under section 80A to 80U under Chapter VIA of the Act are concerned.
8. Respectfully following the findings of the Hon'ble High Court (supra), we decline to interfere. Both these appeals by the Revenue are dismissed.
Order pronounced in Open Court on 27 - 07- 2017
Sd/- Sd/-
(S. S. GODARA) (N. K. BILLAIYA)
JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER
Ahmedabad: Dated 27 /07/2017
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.
5. The DR., ITAT, Ahmedabad.
6. Guard File.
By ORDER
Deputy/Asstt.Registrar
ITAT,Ahmedabad