SHRI VIMLESH AGARWAL,JAIPUR vs. INCOME TAX OFFICER, WARD-4-5, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 639/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2012-13 cuke Vimlesh Agarwal, I.T.O., Vs. N.G.-2, Krishna Square Mall, JDA Ward 4(5), Complex, Subhash Nagar, Jaipur. Jaipur. PAN No.: ABSPA 1359 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Smt. Poonam Roy (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/09/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/10/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M.

This is the appeal filed by the assessee emanates from the order of

the ld. CIT(A)-2, Jaipur dated 31/05/2017 for the A.Y. 2012-13, wherein

the assessee has taken sole effective ground of appeal, which is as under:-

“(i) The ld. CIT(A) has erred on facts and in law in confirming the disallowance of Rs. 2,41,134/- made by the Assessing Officer U/s 14A of the Act.” 2. The ld. CIT(A) has dismissed the appeal of the assessee by holding

as under:-

ITA 639/JP/2017 2 Vimlesh Agarwal Vs ITO

“3.3 I have perused the facts of the case, the assessment order and the submissions of the appellant. The disallowance of Rs.2,41,134/- has been made under section 14A of the I.T. Act, 1961. The Assessing Officer observed that a dividend income of Rs.7,50,753/- has been earned during the year while the assessee has investment of Rs.55,75,000/- in shares of various companies. The Assessing Officer after recording his satisfaction has made the above disallowance. In the present proceedings, it was submitted that the dividend is attributable to the investment of 10,000 shares of Joy Syndicate & Enclave Pvt. Ltd. received during the relevant year. It was further claimed that this investment was made from interest free funds available with the assessee. However, it is seen that total investment in assets yielding exempt income is much more and interest payments have been made. In view of the same, the invocation of section 14A of the I.T. Act, 1961 is upheld and the disallowance made is confirmed. The ground of appeal is dismissed.”

assessee has submitted that the dividend income of Rs. 7,50,753/- is in

respect of the investment of 10,000 shares of Joy Syndicate & Enclave Pvt.

Ltd.. It was claimed that these shares were acquired in the F.Y. 2002-03

for Rs. 20,000/-. It was also claimed that out of total investment of Rs.

55,75,000/-, Rs. 51,75,000/- pertains to share application money. It was

submitted that Section 14A of the Act r.w.r. 8D(2) of the Income Tax

Rules, 1962 is applicable only in respect of investment in shares and no

where share application money has been given. He relied on the decision

ITA 639/JP/2017 3 Vimlesh Agarwal Vs ITO

of the Kolkata Tribunal in the case of ITO Vs LGW Ltd. (2016) 130 DTR

201.

has earned a huge dividend of 7,50,753/- during the year on 10,000

shares of Joy Syndicate & Enclave Pvt. Ltd., which was stated to be

acquired for Rs. 20,000/- in F.Y. 2002-03. It was pleaded that the share

application money is also invested in earning the exempted income,

therefore, the interest paid towards the share applicable given by the

assessee also deserves to be disallowed as per Section 14A of the Act.

he has acquired 10,000 shares of Joy Syndicate & Enclave Pvt. Ltd. in F.Y.

2002-03 for Rs. 20,000/-. It is not clear from the record that the assessee

got 10000 shares in Rs. 20,000/-. The share application money given

towards the acquisition of the shares is also an advance towards the

acquisition of the shares which ultimately could earn dividend which is

exempted under the Income Tax Act. Considering all these aspects and in

the totality of the facts and circumstances of the case, I hold that certain

more facts require on record to decide the issue in right perspective,

therefore, in the interest of justice and equity, I restore the issue to the

ITA 639/JP/2017 4 Vimlesh Agarwal Vs ITO file of the Assessing Officer to be decided de novo after giving effective

and reasonable opportunities of being heard to the assessee.

purposes only.

Order pronounced in the open court on 10/10/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 10th October, 2017

*Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Vimlesh Agarwal, Jaipur. 1. izR;FkhZ@ The Respondent- The I.T.O., Ward 4(5), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 639/JP/2017) 6.

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत