ACIT CORPORATE CIRCLE 6(1), CHENNAI vs. SAVORIT LIMITED, CHENNAI

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER:

The brief facts of the case are as under: 2.

The appellant namely M/s. Savorit Limited is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing Maida, Suji, Atta, Bran, Vermicelli, Macaroni, Spagatti, Noodles etc., The return of income for the AY 2010-11 was filed on 26.09.2010 disclosing total income of Rs. 81,26,374/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.01.2013 passed u/s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) at total income of Rs.1,05,30,743/-. Subsequently, the Assessing Officer noted that assessee made investment in shares and therefore provisions of Section 14A of the Act are applicable and accordingly assessee was issued notice u/s.148 of the Act on 29.03.2017. In response to notice, assessee vide letter dated 17.04.2017 requested that the original return of income filed be treated as return in response to notice issued u/s.148 of the Act. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Corporate Circle 6(1), Chennai vide

ITA No.1211/19 & CO 71/19 :- 3 -: order dated 07.07.2017 by making addition of �1,27,02,727/- u/s.14A of the Act.

Being aggrieved, an appeal was preferred before the 3.

Ld.CIT(A) and contended that i.e. assessment proceedings are not valid in law in the absence of any reasons to disbelieve that income had escaped assessment. It is further contended that no expenditure was incurred to earn dividend income and therefore provisions of Section 14A of the Act have no application. The ld. CIT(A) while upholding the validity of reassessment proceedings, held that provisions of Section 14A of the Act cannot be applied to the facts of the present case in the absence of any exempt income, placing reliance on the decisions of Hon’ble Jurisdictional High Court in the cases of Redington India Ltd vs. Addl. CIT, 392 ITR 633 and CIT vs. Chettinad Logistics P. Ltd, 248 Taxman 55.

any exempt income resort to provisions of Section 14A of the Act cannot be made, reliance in this regard can be placed on the judgment of Hon’ble Jurisdictional High Court in the cases of Redington India Ltd (supra) and Chettinad Logistics P. Ltd (supra) and Hon'ble Supreme Court had also dismissed the SLPs filed against these two decisions. The decision of the ld. CIT(A) is in consonance with the ratio of the decisions laid down by Hon’ble Jurisdictional High Court in the cases of Redington India Ltd (supra) and Chettinad Logistics P. Ltd (supra). Therefore we do not find any reason to interfere with the order of the ld. CIT(A). Hence, the appeal filed by the Revenue is dismissed.

Now, we take up C.O.No.71/CHNY/2019 filed by the 6. assessee.

The assessee had challenged the findings of the ld. CIT(A) 7. on the validity of the reopening of the appeal. Admittedly, the Assessing Officer had not examined the applicability of provisions of Section 14A of the Act in respect of investment made by it in the original assessment proceedings and therefore it cannot be said that Assessing Officer had formed an opinion in the original assessment proceedings and therefore it cannot be said be that reassessment proceedings are promoted by change of opinion. Therefore, we uphold

ITA No.1211/19 & CO 71/19 :- 5 -: the findings of the ld. CIT(A). Accordingly, the Cross Objection filed by the assessee is dismissed.

Order pronounced on 23rd day of September, 2019, at Chennai.