The Commissioner Of Income Tax,Chennai v. Delivered By Dr.vineet Kothari, J

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 06.07.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY Tax Case (Appeal) No.234 of 2015 The Commissioner of Income tax,Chennai ...Appellant/Respondent vs M/s.Dewa Properties LtdNo.770A, II Floor, Dewa Tower IAnna Salai , Chennai-600 002 ...Respondet/Appellant Tax Case Appeal filed against the order of Income TaxAppellate Tribunal, Madras C Bench, Chennai dated 21.03.2014passed in ITA No.2234/Mds/2013 and against the order of theCommissioner of Income Tax(Appeals) (Central)-II, Chennai,dated.31/10/2013 made in ITA.405/13-14 and against the order ofthe Assistant Commissioner of Income Tax, Company circle I(4),Chennai, dated 7/12/2011 made in PA/GIR.NO.AAAC55085Q andagainst the Commissioner of Income Tax, Chennai-I, Chennai dated27/9/2010 made in C.No.218(24)/CIT-I/263/2010-11 for theassessment year 2006-07. For Appellant : Mr.T.Ravikumar Senior Standing CounselFor respondent : Mr.Sivaraman JUDGMENT (Delivered by DR.VINEET KOTHARI, J.) The Court was held by Video Conference, as per theResolution of the Full Court dated 3 July 2020, by Judges at therespective residence offices and the counsel, staff of the Courtappearing from their respective residences. 2. Mr.T.Ravikumar, learned Senior Standing Counsel appearingfor the appellant Revenue submitted that vide paragraph 6 of theorder of the Tribunal, the Tribunal has held that disallowanceof Rs.2.00 Lakhs in the facts and circumstances of the case,would be appropriate under Section 14A of the Act, which enables https://hcservices.ecourts.gov.in/hcservices/ the Revenue to disallow the expenditure incurred in relation toearning an income which is exempt from payment of tax. 3. The order of the Tribunal in Paragraph 6 is quoted belowfor reference: 6. We have heard the submissions made bythe representatives of both the sides andhave also perused the orders of theauthorities below. It is not disputed thatthe assessee has made investment to the tuneof Rs.50.00 Crores in the shares of aprivate limited, un-listed companies fromits own sources. It is not the case ofRevenue that the assessee has madeinvestments from interest bearing funds.During the AY under consideration, theassessee has made investment of ~2.36 Croresin the rights issue of M/s.Saregama India P.Ltd. The assessee is having investmentportfolio of Rs.50.86Crores and theseinvestments have been made over a period of time. The assessee must have been spending some amount in managing the portfolio. The CIT(Appeals) has made an estimation of Rs.10.00 Lakhs. Since the assessee has onlyinvested in private limited, un-listedcompanies and one of the companies in whichthe assessee has made investment is its owngroup concern, we are of the view that theaddition made by the CIT (Appeals) is on thehigher side. In the facts of the case, weare of the considered opinion that Rs.TwoLakhs is just and reasonable amount towardsdis-allowance u/s.14A of the Act. 4. Mr.Sivaraman, learned counsel for the Assessee alsosubmitted that no question of law arises in the present caserequiring consideration of this Court under Section 260A of theAct. 5. Having heard the learned counsel for both sides, we areof the clear opinion that the findings of the Tribunal given inparagraph 6 of the order quoted above, do not give rise to anysubstantial question of law in the present appeal under Section260A of the Act. 6. The extent of expenditure to be disallowed under Section14A of the Act would naturally depend upon the income earned bythe Assessee and spending that income and extent of exemptionthey have drawn. Since the Tribunal has discussed the relevantfacts in paragraph 6 quoted above, we do not find any perversityin the order passed by the Tribunal and the disallowance made https://hcservices.ecourts.gov.in/hcservices/ 5. Having heard the learned counsel for both sides, we areof the clear opinion that the findings of the Tribunal given inparagraph 6 of the order quoted above, do not give rise to anysubstantial question of law in the present appeal under Section260A of the Act. 6. The extent of expenditure to be disallowed under Section14A of the Act would naturally depend upon the income earned bythe Assessee and spending that income and extent of exemptionthey have drawn. Since the Tribunal has discussed the relevantfacts in paragraph 6 quoted above, we do not find any perversityin the order passed by the Tribunal and the disallowance made https://hcservices.ecourts.gov.in/hcservices/ under Section 14A of the Act appears to be just and reasonableand therefore, we do not find any substantial question of law inthe present appeal by the Revenue, which requires our furtherconsideration under Section 260A of the Act. Accordingly, thepresent appeal is liable to be dismissed and the same isdismissed. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarTo1.The Commissioner of Income Tax, Chennai2.The Income Tax Appellate Tribunal, Madras C Bench3.The Commissioner of Income Tax(Appeals)(Central-II), Chennai4.The Assistant Commissioner of Income Tax, Company Circle I(4), Chennai.Tax Case (A) No.234 of 2015CA(CO)RV(23/9/2020)