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Income Tax Appellate Tribunal, DELHI BENCHES “G”, DELHI
Before: Shri N.K. Saini & Shri Joginder Singh,
08/11/2017 सुनवाई क+ तार�ख / Date of Hearing : 08/11/2017 आदेश क+ तार�ख /Date of Order:
30/04/2015 of the Ld. First Appellate Authority, New Delhi for Assessment Year 2012-13, confirming the disallowance of Rs.2,70,946/- u/s 14A of the Income Tax Act, 1961 (hereinafter the Act) as expenses for earning dividend.
During hearing, the ld. counsel for the assessee, Shri Ashok Khandelwal, contended that the assessee did not made any suo-moto disallowance as the dividend came through TCS and no activity of purchase or sale was done by the assessee and the dividend income was directly credited to the bank account of the assessee. It was also pleaded that in earlier AY.2004-05, the Tribunal, identically, decided in favour of the assessee and thereafter in all the year the disallowance, if any, made by the AO was deleted by the Ld. CIT(A) by following the order of the Tribunal against which no appeal was filed by the Revenue. Plea was raised that consistency has to be maintained. Reliance was placed upon the decision in Sood Harvester (2007) 164 taxman 55, Hon’ble jurisdictional High Court in CIT vs Lagan Kala Upvan 259 ITR 489 and DIT vs Lovely Bal Shiksha Parishad (2004) assessee was not controverted by the Revenue. However, the Ld. DR, Shri Kaushlendra Tiwari, contended that some expenses in the form of administration might have been incurred, therefore, the AO was within a jurisdiction to make disallowance.
2.1. We have considered the rival submissions and perused the material available on record. The facts, and the brief, are that the assessee earned dividend income of Rs.12,74,175/- and did not incur any expenditure for such earning. Even the Ld. AO in para-3 of the assessment order has accepted the position that there were no expenses which were directly attributable to the earning of such dividend income. Even otherwise, no interest expenses were incurred by the assessee for the dividend income. The Ld. AO on hypothetical basis worked out the disallowance of Rs.2,70,946/, being 0.5% of the average investment in shares both dividend and non-dividend bearing. Similarly, identical disallowance was deleted by the Ld. CIT(A), which was affirmed by the Tribunal for AY 2011-12. The Delhi Bench of the Tribunal in the case of the assessee for AY dismissed the appeal of the Revenue. Identically, the for AY 2007-08, the Ld. CIT(A) in appeal no.93/09-10 order dated 31/12/2010 deleted the disallowance of Rs.2,97,596/- made u/s 14A of the Act. Identical is the situation for AY 2008-09 order dated 05/07/2011 by the Ld. CIT(A), where the disallowance of Rs.3,01,667/- and for AY 2009-10, the disallowance of Rs.3,13,489/-, made u/s 14A of the Act was deleted. Considering the totality of facts, we find merit in the assertion of the ld. counsel for the assessee.
2.2. If this issue is analyzed with respect to principle of consistency, it is also noted that in earlier assessment years, as discussed above, the disallowance made by the AO was either deleted by the Ld. First Appellate Authority or by the Tribunal as is evident from the orders of the earlier assessment years. In view of these undisputed facts, the ld. Assessing Officer is expected to follow the principle of consistency unless and until contrary material/facts are brought on record. On the issue of consistency, we are supported by following decisions:- ./2015 Cargo Motors Pvt Ltd. i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv. CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP)
The sum and substance of the aforesaid judicial pronouncements is that on the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed.
Before us, no contrary facts or any adverse material was brought on record by the Revenue, therefore, we find no Authority. We affirm his view being uncontroverted on facts.
Resultantly the appeal of the assessee is allowed.
Finally, the appeal of the assessee is allowed.
This order was pronounced in the open court in the presence of the ld. representatives from both sides at the conclusion of the hearing on 08/11/2017.