The National Small Industries ... vs Department Of Income Tax

ACIT, The National Small Circle 16(1), Vs. Industries Corporation Ltd., New Delhi. NSIC Bhawan, Okhla Indl. Area, New Delhi. AAACT0686N (Appellant) (Respondent)

Appellant by: Sh. M.P. Rastogi, Adv. Respondent by: Sh. B.R.R. Kumar, Sr. DR

ORDER

PER S.V. MEHROTRA, A.M.

This appeal filed by the Revenue is directed against the order of ld.

CIT(A), New Delhi dated 15/05/2013 for A.Y. 2009-10.

2. The assessee company in the relevant assessment year was engaged

in the business of hire purchase, leasing, CTL, marketing, assistance. It had

filed its return of income declaring Nil income. The assessment was

completed at a total income of Rs. 6,87,36,987/- which was adjusted against

the brought forward loss to this extent, inter alia, making a disallowance u/s

14A of Rs. 3,82,489/- and exchange fluctuation loss of Rs. 55,34,623/-.

3. Ld. CIT(A) partly allowed the assessee's appeal. ITA No. 4961/D/ 2013 2

4. Being aggrieved with the order of ld. CIT(A) the Department is in

appeal before us and has taken following grounds of appeal:

1. "On the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in allowing relief of Rs. 3,41,164/- against addition made by the AO u/s 14A of the I.T. Act;

2. On the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs. 55,34,623/- made by the AO by disallowing foreign exchange fluctuation loss;

3. The appellant craves for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of appeal."

5. Apropos ground no. 1, ld. Counsel pointed out that a similar

disallowance in A.Y. 2008-09 was made and the same has been partly

deleted. The Department has not preferred any appeal against the

CIT(Appeals) order for A.Y. 2008-09. He further pointed out that ld. CIT(A)

has only followed the findings for A.Y. 2008-09 which have been reproduced

in para 2.2 of his order.

6. We have considered the submissions of both the parties, we find that

in para 2.3 ld. CIT(A) has observed as under:

2.3 "The submissions of the appellant and the facts have been carefully considered. In the assessment order, the AO made a disallowance of Rs.

3,41,164/- under rule 8D(2)(ii) and a disallowance of Rs. 41,325/- under rule 8D(2)(iii). A similar disallowance made in A.Y. 2008-09 under rule 8D(2)(ii) has been deleted, and a disallowance under rule 8D(2)(iii) has been upheld, by the CIT(A)-12, vide her order dated 7.1.13. The appellant has pointed out that they had sufficient funds of their own to finance the ITA No. 4961/D/ 2013 3

investments and has filed the required details. Disallowance under rule 8D(2)(ii) is therefore, not sustainable in law. However, the disallowance under rule 8D(2)(iii) is entirely, justified. Considering the facts and following the decision of the CIT(A) in the preceding year, the disallowance under rule 8D(2)(ii) is deleted, and the disallowance under rule 8D(2)(iii) is upheld. The Grounds are partly allowed."

7. The department has not brought on record any evidence to controvert

the findings of ld. CIT(A) that the assessee had sufficient funds of their own

to finance the investments. We, therefore, do not find any reason to interfere

with the findings of ld. CIT(A).

8. Apropos ground no. 2, ld. Counsel pointed out that the addition was

made by the AO on account of foreign exchange fluctuation loss in A.Y.

2008-09 which has been deleted by the Tribunal in assessee's own case,

vide ITA No. 2455/Del/2013 dated 31/10/2013, wherein the Tribunal,

following the decision of Hon'ble Jurisdictional High Court in the case of CIT

vs. Woodward Governor India P. Ltd. (2007) 294 ITR 451, dismissed the

Revenue's appeal. We find that ld. CIT(A) in para 3.3 has observed as

under:

3.3 "The submissions of the appellant and the facts have been carefully considered. The appellant has pointed out that on similar facts, the addition made in A.Y. 2008-09 has been deleted by the CIT(A)-12 vide her order dated 7.1.13. The appellant has placed reliance on several judicial decisions including the decision of the Hon'ble Supreme Court in the case of ONGC vs. CIT [322 ITR 180]. Considering the facts, and following the order of the CIT(A) in the preceding year, the addition is not justified and is deleted. The Ground is allowed."

ITA No. 4961/D/ 2013 4 9. In view of the decision of Tribunal in assessee's own case (supra), we

do not find any reason to interfere with the order of ld. CIT(A).

10. In the result, the Revenue's appeal is dismissed.

Order pronounced in the open court on 23/02/2015

Sd/- Sd/-

(GEORGE GEORGE K) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: *Kavita

Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, New Delhi. TRUE COPY By Order

ASSISTANT REGISTRAR