Income Tax Appellate Tribunal - Ahmedabad
Sarabhai Holdings Pvt. Ltd.,, ... vs Dy.Cit, Circle-8,, Ahmedabad on 2 January, 2017
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'सी', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" C " BENCH, AHMEDABAD
सव ी राजपाल यादव, या यक सद य एवं द प कुमार के डया, लेखा सद य के सम ।
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
And SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.2741/Ahd/2013
( नधा रण वष / Assessment Year : 2010-11)
Sarabhai Holdings Pvt.Ltd. बनाम/ The DCIT
Opp: Jansatta Press Vs. Circle-8
Mirzapur Road Ahmedabad
Mirzapur,
Ahmedabad-380 001
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAECS 6919 B
(अपीलाथ% /Appellant) .. ( &यथ% / Respondent)
अपीलाथ% ओर से / Appellant by : Shri M.K. Patel, AR
&यथ% क( ओर से/Respondent by : Shri Prasoon Kabra, Sr.DR
ु वाई क( तार ख /
सन Date of Hearing 09/12/2016
घोषणा क( तार ख /Date of Pronounce ment 02/01/2017
आदे श / O R D E R
PER PRADIP KUMAR KEDIA, AM:
This appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-I, Ahmedabad dated 24.09.2013 for Assessment Year(AY) 2010-11. Grounds taken by the assessee read as under:-
ITA No.2741/Ahd/2013Sarabhai Holdings Pvt.Ltd. vs. DCIT Asst.Year - 2010-11 -2- (1) That on facts, and in law, the learned CIT(A) has grievously erred in partly confirming the disallowance made u/s.14A of the Act r.w. Rule 8D.
(2) That on facts, and in law, the learned CIT(A) has grievously erred in confirming the disallowance of Rs.1,30,567/- made u/s.40(a)(ia) of the Act.
(3) That the learned CIT(A) has grievously erred in confirming the levy of interest u/s.234A, 234A, 234C and 234D of the Act.
2. Briefly stated, assessment of the assessee was framed under section 143(3)of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The Assessing Officer (AO) while framing the assessment made disallowance by invoking the provisions of section 14A r.w.Rule 8D of the Income Tax Rules, 1962 amounting to Rs.13,59,892/- and also made disallowance of Rs.1,30,567/- under section 40(a)(ia) of the Act. The CIT(A) confirmed the action of the AO in the first appeal.
3. Aggrieved thereto, the assessee is in second appeal before the Tribunal.
4. The ld.counsel for the assessee submitted that with reference to ground No.1 of the appeal memo that the addition has been made invoking the provisions of section 14A r.w.Rule 8D of the I.T. Act, 1962 computed at Rs.13,59,892/-. The Ld.AR made a short argument that the authorities below have wrongly invoked the provisions of Rule 8D in relation to investments, a part of which is in the nature of investments ITA No.2741/Ahd/2013 Sarabhai Holdings Pvt.Ltd. vs. DCIT Asst.Year - 2010-11 -3- giving rise to taxable income. He accordingly prayed that the matter may be remanded back to the file of the AO with a direction to recompute the disallowance under section 14A, if any, after examining the facts afresh in accordance with law.
5. The Ld.DR did not object for re-examination of the point in issue by the AO.
6. Having regard to the assertions made by the Ld.AR across the Bar, we consider it expedient that the point in issue pertaining to disallowance of section 14A be set aside to the file of AO for re-examination de novo in accordance with law after giving proper opportunity of being heard to the assessee. Needless to say, the investments yielding taxable income cannot be considered for the purpose of computing disallowance under section 14A of the Act.
7. The second grievance of the assessee is towards disallowance of Rs.1,30,567/- under section 40(a)(ia) of the Act. The Ld.AR submitted that the assessee has paid a sum of Rs.1,30,567/- to one Bakubhai Ambalal (Realty) Pvt.Ltd. on which the assessee has not deducted TDS under section 194-I of the Act on the assumption that it is in the nature of service charges not amenable to TDS under section 194-I of the Act. The Ld.AR added that the AO on the other hand has disallowed the ITA No.2741/Ahd/2013 Sarabhai Holdings Pvt.Ltd. vs. DCIT Asst.Year - 2010-11 -4- aforesaid payment under section 40(a)(ia) on the ground that it is towards rent of the premises which is susceptible to section 194I of the Act.. The Ld.AR next submitted that the recipient of the rent, in any case, has paid taxes and therefore substantial compliance has been made. He referred to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd. reported at (2015) 377 635 (Delhi) and sought retrospective benefit of second proviso to section 40(a)(ia) inserted vide Finance Act, 2012. He accordingly submitted that the matter may be set aside to ascertain that the deductee has already included the impugned payments in its accounts and offered the same for taxation. The Ld.DR did not object to the request for verification by the AO.
8. In view of the consistent stand taken by the Tribunal following various judicial precedents and also in the light of decision of the Hon'ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd. (supra), we consider it expedient to set aside the issue to the file of AO for fresh adjudication in accordance with law in the light of the decision in the case of Ansal Land Mark Township (P) Ltd.(supra). The AO shall delete the disallowance made under section 40(a)(ia) if it is found that the deductee has included the receipt in its return of income for taxation purposes. The issue is accordingly restored to the file of AO in terms of directions noted above.
ITA No.2741/Ahd/2013Sarabhai Holdings Pvt.Ltd. vs. DCIT Asst.Year - 2010-11 -5-
9. In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 02/01/2017
Sd/- Sd/-
(राजपाल यादव) ( द प कुमार के डया)
या यक सद य लेखा सद य
(RAJPAL YADAV) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 02/ 01 /2017
ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS
आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ% / The Appellant
2. &यथ% / The Respondent.
3. संबं5धत आयकर आयु7त / Concerned CIT
4. आयकर आयु7त(अपील) / The CIT(A)-I, Ahmedabad
5. 8वभागीय त न5ध, आयकर अपील य अ5धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स&या8पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 9.12.2016 (dictation-pad 11- pages attached at the end of this appeal- file)
2. Date on which the typed draft is placed before the Dictating Member ...13.12.2016
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......03/01/2017
7. Date on which the file goes to the Bench Clerk.....................03/01/2017
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................