RARE ENTERPRISES, MUMBAI V. ACIT 12(1), MUMBAI

CO 119/MUM/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8246 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 22-01-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 20-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Assessee Lawyers: S C TIWARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D BENCH BEFORE SHRI R.S.SYAL(AM) AND DR.T.M PAVALAN (JM) ITA NO.5902/MUM/2011: ASSESSMENT YEAR: 2004-05 I.T.A. NO.5903/MUM/2011: ASSESSMENT YEAR 2004-05 ACIT -12(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 RARE ENTERPRISES, 105, VITHALDAS CHAMBERS,16, S.B.S. MARG, FORT, MUMBAI-001 PA NO.AAEFR 8176 J (APPELLANT) VS. (RESPONDENT) C.O. N0.119/MUM/2012 (ARISING OUT OF I.T.A. NO.5903/MUM/2011) RARE ENTERPRISES, 105, VITHALDAS CHAMBERS,16, S.B.S. MARG, FORT, MUMBAI-001 PA NO.AAEFR 8176 J ACIT -12(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 (APPELLANT) VS. (RESPONDENT) ASSESSEE BY : SHRI S.C.TIWARI REVENUE BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING: 22.1.2013 DATE OF PRONOUNCEMENT: 30.1.2013 ORDER PER R.S.SYAL, AM: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE IN RESPECT OF QUANTUM PROCEEDINGS AND THE APPEAL BY TH E REVENUE AGAINST THE PENALTY PROCEEDINGS RELATE TO ASSESSMENT YEAR 2004- 05. SINCE ALL THESE APPEALS ITA NO.5902/MUM/2011: ASSESSMENT YEAR: 2004-05 I.T.A. NO.5903/MUM/2011: ASSESSMENT YEAR 2004-05 C.O. N0.119/MUM/2012 2 ARE BASED ON SIMILAR FACTS AND CIRCUMSTANCES, WE AR E THEREFORE PROCEEDING TO DISPOSE OFF THEM BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NO.5903/M/11 AND C.O. NO.119/M/2012: 2. THE REVENUE IS AGGRIEVED AGAINST THE DIRECTION G IVEN BY THE FIRST APPELLATE AUTHORITY AGAINST THE DISALLOWANCE MADE U/S.14A. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO, IN THE ORIGINAL ASSESSMENT PROCEEDINGS, COMPUTED THE DISALLOWANCE U /S.14A OF THE ACT BY APPLYING RULE 8D. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE LD CIT(A), WHO DIRECTED THE AO TO RE-COMPUTE THE DISALLOWANCE U/S.14A OF THE ACT BY APPLYING RULE 8D OF THE INCOME TAX RULES, 1962. TH E AO, GIVING EFFECT TO THE ORDER PASSED BY LD CIT(A) AGAINST ORIGINAL ASSESSME NT, COMPUTED THE DISALLOWANCE AS PER RULE 8D(2)(II) AT RS.2,77,78,43 3/- AND AS PER RULE 8D(2)(III) AT RS.15,38,665/-. IN THE MEANTIME, ASSESSEE PREFE RRED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORIGINAL ORDER PASSED BY LD CI T(A) DIRECTING THE AO TO RE- COMPUTE THE DISALLOWANCE U/S.14A OF THE ACT AS PER RULE 8D. THE TRIBUNAL VIDE ITS ORDER DATED 20.12.2010 IN I.T.A. NO.1911/M/2009 REMITTED THE MATTER TO THE FILE OF AO FOR COMPUTING THE DISALLOWANCE AS PER TH E JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MFG CO. LTD VS DCIT (328 ITR 81). IN THE APPEAL AGAINST THE ORDER PASSE D BY THE AO GIVING EFFECT TO ITA NO.5902/MUM/2011: ASSESSMENT YEAR: 2004-05 I.T.A. NO.5903/MUM/2011: ASSESSMENT YEAR 2004-05 C.O. N0.119/MUM/2012 3 THE ORIGINAL CIT(A)S ORDER, LD CIT(A) BY THE IMPUG NED ORDER, DELETED THE ADDITION. THE REVENUE IS IN APPEAL BEFORE US. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL AVAILABLE ON RECORD, IT IS OBSERVED THAT THE TRIBUNAL REMITTE D THE MATTER TO THE FILE OF AO FOR COMPUTING THE DISALLOWANCE U/S.14A IN ACCORDANC E WITH THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GO DREJ BOYCE MFG CO. LTD (SUPRA). IN THAT VIEW OF THE MATTER, THE MATTER PASSED BY LD CIT(A) CEASED TO BE OPERATIVE. AS SUCH, THE CONSEQUENTIAL ORDER PASSED BY THE AO GIVING EFFECT TO SUCH IN-OPERATIVE ORDER OF LD CIT(A), IN OUR CONSID ERED VIEW, HAS BEEN RIGHTLY SET ASIDE BY LD CIT(A). IT IS OBVIOUS THAT THERE CAN B E ONLY ONE PROCEEDING FOR ONE CASE. WHEN THE AO IS CEASED OF THE MATTER FOR COMP UTING THE DISALLOWANCE U/S.14A, AS PER THE ORDER PASSED BY THE TRIBUNAL, T HERE CAN BE NO QUESTION OF CONTINUING WITH ANY OTHER PROCEEDINGS. ACCORDINGLY , THE APPEAL FILED BY THE REVENUE IS DISMISSED. 5. LD A.R. WAS FAIR ENOUGH NOT TO PRESS THE CROSS O BJECTION, WHICH IS ONLY AGAINST DISALLOWANCE U/S.14A OF THE ACT. 6. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED AND THE CROSS OBJECTION FILED BY ASSESSEE IS DISMISSED. I.T.A. NO.5902/M/2011: 7. THIS APPEAL BY THE REVENUE IS AGAINST ORDER PASS ED BY LD CIT(A) ON 10.6.2011 DELETING THE PENALTY IMPOSED BY THE AO U/ S.271(1)(C) OF THE ACT, PURSUANT TO DISALLOWANCE U/S.14A. ITA NO.5902/MUM/2011: ASSESSMENT YEAR: 2004-05 I.T.A. NO.5903/MUM/2011: ASSESSMENT YEAR 2004-05 C.O. N0.119/MUM/2012 4 8. THIS PENALTY WAS IMPOSED BY THE AO IN RESPECT OF ORDER PASSED BY HIM CONSEQUENT UPON THE DIRECTION GIVEN BY LD CIT(A). FOLLOWING THE VIEW TAKEN BY LD CIT(A) IN THE QUANTUM PROCEEDINGS, HE HELD BY TH E IMPUGNED ORDER THAT THERE CAN BE NO PENALTY SINCE THE ADDITION ITSELF HAS BEE N SET ASIDE BY THE TRIBUNAL 9. AFTER CONSIDERING THE RIVAL SUBMISSION AND PERUS ING THE RIVAL MATERIAL ON RECORD, IT IS OBSERVED THAT THE ORIGINAL DISALLOWAN CE MADE BY THE AO HAS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF AO. IN THA T VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE INSTANT PENALTY SHO ULD ALSO BE CONSEQUENTLY RESTORED. THE HONBLE SUPREME COURT IN THE CASE OF MOHD.MOHATRAM FAROOQUI VS CIT(SC)2010-TIOL-23-SC-IT HAS RESTORED THE PENALTY TO THE AO WHERE QUANTUM HAS BEEN RESTORED FOR FRESH COMPUTATION. AS LD CIT (A) HAS DELETED THE PENALTY IN STEAD OF RESTORING THE MATTER TO THE FILE OF AO, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR CONSIDER ING THE QUESTION OF PENALTY AFRESH. 10. IN THE RESULT, APPEAL FILED BY REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30TJ JAN UARY, 2013 SD/- (DR.T.M PAVALAN) JUDICIAL MEMBER SD/- (R.S.SYAL) ACCOUNTANT MEMBER MUMBAI, DATED 30 TH JANUARY, 2013 ITA NO.5902/MUM/2011: ASSESSMENT YEAR: 2004-05 I.T.A. NO.5903/MUM/2011: ASSESSMENT YEAR 2004-05 C.O. N0.119/MUM/2012 5 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),23, MUMBAI 4. COMMISSIONER OF INCOME TAX, 12 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH D MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI