SHRIRAM VENTURE LIMITED,CHENNAI vs. DCIT, CHENNAI

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ITA 586/CHNY/2016Status: DisposedITAT Chennai17 April 2017AY 2012-20134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a similar issue for the same assessment year in the Revenue's appeal was remitted back to the Assessing Officer for fresh consideration. Therefore, the assessee's appeal was also remitted back with similar directions.

What were the facts?

The assessee, engaged in investment business, had Rs. 1,99,06,939 disallowed under Section 14A read with Rule 8D. The CIT(A) confirmed this disallowance.

What were the issues?

The primary issue was the correctness of the disallowance made under Section 14A read with Rule 8D. The Tribunal needed to ascertain the nature of investments and shareholding patterns.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI A.MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY

Pronounced: 17.04.2017

आदेश / O R D E R

Per A. Mohan Alankamony, AM:-

1.

This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)- 15, Chennai dated 24.09.2015 in passed U/s.250(6) r.w.s. 143(3) of the Act.

2.

The assessee has raised several grounds in its appeal, however the crux of the lone issue is that the Ld.CIT(A) has erred in confirming the order of Ld.AO who had made disallowance invoking Section 14A r.w.r 8D of the Rules.

3.

The brief facts of the case are that the assessee is a limited company engaged in the investment business, filed its return of income for the assessment year 2012-13 on 29.09.2012. The case was selected up for scrutiny under CASS and finally order U/s. 143(3) was passed on 16.02.2015 wherein the Ld.AO disallowed Rs.1,99,06,939/- by invoking the provisions of Section 14A read with Rule 8D of the Rules. On appeal, the Ld.CIT(A) also confirmed the order of the Ld. AO citing various decisions of higher judiciary.

4.

Before us the Ld.AR submitted that on the Revenue’s appeal for the same assessment year and on the similar issue, the Chennai bench of the Tribunal in vide order dated 29.07.2016 had remitted the matter back to the file of the Ld.AO for fresh consideration. The relevant portion of the order of the Tribunal is reproduced herein below for reference:-

“5. We have considered the rival submissions on either side and also perused the material available on record. The assessee claims that the entire investment was made in subsidiary companies for the purpose of business and not for earning the exempted income. As rightly submitted by the ld. DR, the details of the subsidiary/holding company in which the investments were made are not available on record. It is not known how the companies in which the investments were made are subsidiary/holding companies of the assessee. Unless the shareholding pattern of the companies in which the investments were made by the assessee are made available on record, this Tribunal is of the considered opinion that there is no basis for concluding that the investments were made in subsidiary companies. Therefore, it is necessary to bring on record the details of the companies in which the investments were made by the assessee and the shareholding pattern of such companies. Moreover, a bare reading of the assessment order shows that the Assessing Officer has also added the disallowance made u/s 14A of the Act to the income computed u/s 115JB of the Act. This Tribunal is of the considered opinion that in the absence of any material available on record, the Assessing Officer has to reconsider the matter. Accordingly, the orders of the lower authorities are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh and bring on record the details of the companies in which the investments were made by the assessee and the shareholding pattern of such companies and thereafter decide the same in accordance with law after giving a reasonable opportunity to the assessee.

6. In the result, the appeal of the Revenue is allowed for statistical purposes.”

5.

Since the Chennai bench of the Tribunal has already remitted back the matter to the file of Ld.AO for fresh consideration in the Revenue’s appeal, this appeal of the assessee is also remitted back to the file of Ld.AO with similar direction.

6.

In the result appeal of the assessee is allowed for statistical purposes.

Order pronounced in the court on the 17th April, 2017.

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