BAROOAHS & ASSOCIATES PRIVATE LIMITED,KOLKATA vs. DCIT, CIRCLE - 4(1), KOLKATA

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ITA 40/KOL/2019Status: DisposedITAT Kolkata22 April 2021AY 2013-142 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to exclude the dividend income of Rs. 2,46,352/- from the total income. This is because dividend income is not taxable in view of Section 10(34) of the Act.

What were the facts?

The Assessing Officer disallowed expenditure under Section 14A for investments that generated dividend income. The assessee claimed dividend income of Rs. 2,46,352/- but did not add back related expenses. The Assessing Officer and CIT(A) erred in not excluding this dividend income from total income.

What were the issues?

Whether dividend income, which is exempt under Section 10(34), should be included in the total income when disallowing expenses under Section 14A. Whether the AO and CIT(A) erred in not rectifying this apparent mistake.

Which sections of the Income-tax Act were involved?

Section 14A,Section 10(34)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy, Hon’ble & Sri Aby T. Varkey, Hon’ble

order : April 22nd, 2021 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals)- 2, Kolkata (hereinafter the “ld. CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 29/11/2018, for the Assessment Year 2013-14.

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2. After hearing rival contentions we find that the Assessing Officer has disallowed expenditure u/s 14A of the Act by recording as follows:- “It was evident from the relevant balance sheets of the assessee that the assets shown therein included a significant amount of investments. Besides, the assessee claimed to have earned an amount of dividend of Rs.2,46,352/- in the previous year under consideration. Logically, related expenses ought to have been added back by the assessee in its computation of total income in accordance with the provisions of section 14A of the Act. But no such addition was made by the assessee of its own accord.”[emphasis ours] 3. While doing so, he has not excluded this dividend income from the total income by applying Section 10(34) of the Act. This mistake is apparent on record. Both the Assessing Officer as well as the ld. CIT(A) are in error in not rectifying this mistake. Hence, we direct the Assessing Officer to exclude the dividend income of Rs.2,46,352/- from the total income as the same cannot be brought to tax in view of Section 10(34) of the Act.

4.

In the result, appeal of the assessee is allowed. Kolkata, the 22nd day of April, 2021.

Sd/- Sd/- [J. Sudhakar Reddy] [Aby T. Varkey] Judicial Member Accountant Member Dated: 22.04.2021 {SC SPS}

Assessment Year: 2013-14 Barooahs & Associates Private Limited Barooahs & Associates Private Limited Copy of the order forwarded to: 1. Barooahs & Associates Private Limited Barooahs & Associates Private Limited 113 Park Street 9th Floor Kolkata – 700 016

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Deputy Commissioner of Income Tax, Circle Deputy Commissioner of Income Tax, Circle -4 (1), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.

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