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TMI Blog2018 (9) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant assessment year under consideration. See case of Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COURT]. - Decided in favor of assessee. - ITA 1862/Del/2015, ITA 1863/Del/2015, ITA 1864/Del/2015 And ITA 1865/Del/2015 - - - Dated:- 20-9-2018 - SHRI RS SYAL, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER For The Appellant : Shri P.K.Mishra, C.A. And Sh. Neeraj Jain, C.A. For The Respondent : Smt.Deepali Chandra, CIT, D.R. ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeals have been filed by assessees against separate orders dated 29/01/15 passed by Ld. CIT (A)-1, for assessment years under consideration on the following grounds of appeal: ITA 1857/Del/2015 A.Y. 2008-09 1. That the order of Ld.CIT(Appeals) is bad in law and on facts and in the circumstances of the case. 2. That the Ld.CIT(A) erred in treating the ground no.2 agitating the issuing of notice u/s 153A as general and thereby not adjudicating upon the same. 3. That the Ld.CIT(A) erred in sustaining the ad hoc disallowance @ 10% on account of personal use amounting to ₹ 97,351/- out of following expenses:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. 5. The above grounds of appeal are without prejudice to each other. 6. The Appellant craves leave to add, alter, amend and/or modify the above grounds of appeal. ITA 1863/Del/2015 A.Y. 2009-10 1. That the order of Ld.CIT(Appeals) is bad in law and on facts and in the circumstances of the case. 2. That the Ld.CIT(A) erred in treating the ground no.2 agitating the issuing of notice u/s 153A as general and thereby not adjudicating upon the same. 3. That the Ld.CIT(A) erred in sustaining the ad hoc disallowance @ 10% on account of personal use amounting to ₹ 1,28,730/- out of following expenses:- ( a) Telephone expenses ₹ 2,68,189/- ( b) Conveyance ₹ 46,152/- ( c) Car running and maintenance ₹ 28,625/- ( d) Interest on car loan ₹ 3,66,694/- ( e) Depreciation on car ₹ 5,77,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the ad hoc disallowance @ 10% on account of personal use amounting to ₹ 2,30,458/- out of following expenses:- ( a) Telephone expenses ₹ 2,90,648/- ( b) Conveyance ₹ 63,304/- ( c) Car running and maintenance ₹ 46,540/- ( d) Interest on car loan ₹ 5,75,398/- ( e) Depreciation on car Rs.13,28,689/- Total : ₹ 23,04,579/- 4.(i) That the Ld.CIT(A) erred in sustaining the addition of ₹ 17,93,431/- on account of disallowance u/s 14A of the Act read with Rule 8D of Income Tax Rules. ( ii) That the Ld.CIT(A) erred in considering the share application money of ₹ 1,16,15,375/- for the purpose of calculation of disallowance u/s 14A of the Income Tax Act, 1961 (the Act) ignoring the fact that share application money is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in support. He submitted that assessee filed all requisite details, vouchers, as has been observed by Ld.AO in assessment order, regarding expenses claimed and Ld.AO has not pointed out any instances/fault in the same. Ld.AR submitted that Ld.AO has, without any basis, disallowed expenses at 10%. It has been submitted by Ld.AR that telephones are installed at office premises of assessee and vehicles are used for conducting day-to-day affairs of assessee. Regarding depreciation on car, it is submitted that, it cannot be disallowed in hands of assessee, as it s genuine claim. 5.1 . Ld.DR placed reliance upon orders passed by authorities below. 5.2. We have perused submissions advanced by both sides in the light of records placed before us. 5.3 . The present assessee before us is a company and is an entity recognised by law, as a legal person, that exist in eyes of law independently with rights and liabilities. Thus no element of personal expenses by the Directors/Office bearers can be attributed, without, there being sufficient evidence in support. Admittedly, Ld.AO neither pointed out any instance of inflation in expenditure claimed by assessee, nor has given any find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dras High Court . Further admittedly assessee has not earned any exempt income during relevant assessment year under consideration and accordingly the issue stands squarely covered by afore stated decisions of Hon ble Delhi High Court as well as Hon ble Madras High Court. 6.7. In view of above we allow ground raised by assessee and delete disallowance computed by Ld.AO under section 14A read with Rule 8D for year under consideration. 7. In the result appeal filed by assessee in ITA No. 1857/Del/2015 for assessment year 2008-09 stands partly allowed. 8. ITA No. 1862-1865/Del/2015 (assessment year 2008-09 to 2011-12) 8.1. Ld.AR submitted that the issues raised by assessee in these appeals are similar and identical. He also submitted that the issues are commonly raised with ITA No. 1857/Del/2015 which has already been decided hereinabove. 8.2. Ld.AR accordingly submitted that, Ground No. 1 in all the appeals are general in nature. 8.3. He submitted that Ground No. 2 to be considered as not pressed . Accordingly ground No. 2 stands dismissed as not pressed . 9. Ground No. 3 is in respect of sustaining ad-hoc disallowance at 10% on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court followed the decision of its Coordinate Bench in case of Redington (India) Ltd vs ACIT reported in (2017) 77 Taxmann.com 257, wherein Hon ble Court rejected argument of revenue that, whether or not exempt income was earned in a concerned Assessment Year, expenditure under section 14 A could be disallowed against anticipated income. 13.3. It has been submitted by Ld.AR that this decision of Hon ble Madras High Court stands approved by Hon ble Supreme Court wherein SLP filed by revenue has been dismissed in case of CIT vs. Chettinad Logestic s Pvt.Ltd ., reported in (2018) 95 Taxmann.com 250. 13.4 . Ld.DR though supported order passed by authorities below, could not controvert afore stated view taken by Hon ble Madras High Court. 14 . We have perused submissions advanced by both the sides in light of records placed before us. 14.1. It is observed that view taken by Hon ble Delhi High Court in case of Cheminvest Ltd vs. CIT, reported in (2009) 121 ITD 318 supports the view taken by Hon ble Madras High Court . Further admittedly assessee has not earned any exempt income during relevant assessment year under consideration and accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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