ACIT, CHENNAI vs. M/S. CHETTINAD LOGISTICS PVT. LTD., CHENNAI

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ITA 2791/CHNY/2016Status: DisposedITAT Chennai13 June 2017AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer for re-examination, considering commercial expediency and expenditure attributable to investments, and applying Section 14A read with Rule 8D.

What were the facts?

The Revenue appealed against the CIT(A)'s order directing the AO to re-work disallowance under Section 14A, excluding interest attributable to strategic investments. Both parties agreed the issue was covered by a co-ordinate bench decision.

What were the issues?

Whether interest attributable to strategic investments should be excluded from disallowance under Section 14A. The need to re-examine investments for commercial expediency.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN

Hearing: 13.06.2017Pronounced: 13.06.2017

आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

the Order of Commissioner of Income Tax (Appeals)-1, Chennai, in dated 05.07.2016 for the AY 2012-13.

2.

Shri Sasi Kumar, JCIT, represented on behalf of the Appellant and Shri A.S.Sriraman, Adv., represented on behalf of the Respondent.

ITA No.2791/Mds/2016 :- 2 -:

3.

It was submitted by the Ld.DR that the only issue in the Revenue’s appeal was against the action of the Ld.CIT(A) in directing the AO to re- work the disallowance u/s.14A r/w Rule 8D after excluding the interest attributable to strategic investments. It was further agreed by both the sides that the issue in the Revenue’s appeal was squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the AYs 2010-11 & 2011-12 in and in ITA No.1647/Mds/2015 dated 07.06.2016 and in ITA No.637/Mds/2016 wherein the Co-ordinate Bench of this Tribunal has restored the issue to the file of the AO with the following directions:

The assessee has invested in group companies not to earn exempted income. Considering apparent facts, the investments pattern, judicial decisions and findings of the ld. Commissioner of Income Tax (Appeals) and nature of expenditure claimed as per Audited Financial Statements, we are of the opinion that the matter has to re-examined and direct the Assessing Officer to verify the investments in group subsidiaries on commercial expediency and expenditure attributable to investments and apply the provisions of Sec.14A r.w. Rule 8D, we remit the issue to the file of Assessing Officer for fresh consideration. This ground of the assessee is allowed for statistical purpose.

4.

We have considered the rival submissions. As it is noticed that the Co-ordinate Bench of this Tribunal has restored the issue to the file of the AO for re-adjudication, on identical reasons, the issue in this appeal are restored to the file of the AO for re-adjudication.

ITA No.2791/Mds/2016 :- 3 -:

5.

In the result, the appeal filed by the Revenue is partly allowed for statistical purposes

Order pronounced in the Open Court on June 13, 2017, at Chennai.

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