NAVROZ HORMASJI SEERVAI, MUMBAI V. ADDL CIT 11(3), MUMBAI

ITA 1077/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84009 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 28-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-02-2013
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.1077/MUM/2013 (A.Y. 2008-09) MR. NAVROZ HORMASJI SEERVAI 8, SHIV SHANTI BHAVAN 146, M.K. ROAD. MUMBAI-400 020. / VS. ADDL. CIT 11(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( ! / // / APPELLANT) ( '# ! / RESPONDENT) P.A. NO.ABKPS 4285 N ! $ % $ % $ % $ % /APPELLANT BY : SHRI NITESH JOSHI '# ! $ % $ % $ % $ % /RESPONDENT BY : SHRI VIJAY KUMAR BORA $ &'( / / / / DATE OF HEARING : 28.10.2014 )*+ $ &'( / DATE OF PRONOUNCEMENT : 28.10.2014 ,- ,- ,- ,- / / / / O R D E R PER JOGINDER SINGH (JM) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 9/11/2012 OF THE LD. CIT(A) CONFIRMING THE DISALLOW ANCE OF TO THE EXTENT OF RS.2.50 LACS U/S. 14A OF THE INCOME TAX ACT R.W. RULE 8D OF THE I.T. RULES OUT OF TOTAL DISALLOWANCE OF RS.8,15,778/- MA DE IN THE ASSESSMENT ORDER FRAMED U/S. 143(3) OF THE ACT. ITA NO.1077/MUM/2013 2 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SHRI NITESH JOSHI CONTENDED THAT THE ABOVE GROUND IS TH E EFFECTIVE GROUND AS THE REMAINING GROUNDS ARE IN SUPPORT OF THE ABOVE G ROUND. IT WAS ALSO PLEADED THAT THE ISSUE IN HAND IS COVERED Y THE DEC ISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2009-10 ORDER DATED 3/9/2014 IN ITA NO.4129/M/2013. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR SHRI VIJAY KUMAR BORA. H OWEVER, MR. BORA DEFENDED THE CONCLUSION DRAWN IN THE ASSESSMENT ORD ER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD . IN VIEW OF THE ABOVE WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID O RDER OF THE TRIBUNAL DATED 3/9/2014:- 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CARE FULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND FO UND FROM THE RECORD THAT ASSESSEES FUNDS WERE MANAGED BY PROFESSIONAL MANAGER AND PROFESSIONAL MANAGEMENT FE ES PAID OF RS.6,78,451/- WAS NOT CLAIMED AS EXPENDITUR E FOR INCOME TAX PURPOSES AND THE SAME WAS DEBITED TO THE PERSONAL CAPITAL ACCOUNT. SIMILARLY STT OF RS.46,46 2/- WAS ALSO DEBITED TO THE PERSONAL CAPITAL ACCOUNT AND TH E SAME WAS NOT CLAIMED AS EXPENDITURE. IN ADDITION TO THIS , THE ASSESSEE HIMSELF HAS DISALLOWED 1/5 TH OF THE MOTOR CAR EXPENSES AND TELEPHONE EXPENSES OF RS.9352/- ON ACC OUNT OF PERSONAL USE. SINCE THE INDIRECT EXPENSES INCURR ED BY THE ASSESSEE ON ACCOUNT OF PAYMENT MADE TO THE PROFESSI ONAL MANAGER, WHO WAS MANAGING THE FUNDS OF THE ASSESSEE , WAS NOT CLAIMED AS EXPENDITURE, THERE IS NO REASON FOR DISALLOWANCE OF EXPENDITURE BY INVOKING THE RULE 8- D OF THE INCOME TAX RULE, 1962. FURTHER, THE FINDINGS RECORD ED BY THE LD. CIT(A) AT PARA 3.5 HAS NOT BEEN CONTROVERTE D, WE DO NOT FIND ANY REASON OR INFIRMITY IN THE ORDER OF TH E LD. CIT(A) DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER. ITA NO.1077/MUM/2013 3 3.1 IN VIEW OF THE ABOVE AND UNCONTROVERTED FINDING THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE, APPLICATION OF RULE 8D IN A MECHANICAL MANNER IS NOT JUSTIFIED, TH EREFORE, CONFIRMATION OF EXPENDITURE OF RS.2.50 LACS IS NOT JUSTIFIED IN THE PRESENT FACTS FOR EARNING EXEMPT INCOME MORE SPECIFICALLY WHEN THE AS SESSEE HAS ALREADY DISALLOWED CERTAIN EXPENDITURE. ACCORDINGLY THIS GR OUND OF THE ASSESSEE IS ALLOWED. 3.2 SINCE THE REMAINING GROUNDS WERE CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE AS SUPPORTIVE TO THE AFORESAID GRO UND, THEREFORE, WE ARE REFRAINING OURSELVES TO ADJUDICATE THE REMAINING GR OUNDS. 4. FINALLY, THE APPEAL OF THE ASSESSEE IS DISPOSED OF IN TERMS INDICATED HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 28 TH DAY OF OCTOBER, 2014 . ,- $ )*+ .,/ 28.10.2014 * $ 6 SD/- SD/- (N.K. BILLAIYA) (JOGINDER SINGH) ( ,7 ( ,7 ( ,7 ( ,7 / ACCOUNTANT MEMBER ,7 ,7 ,7 ,7 / JUDICIAL MEMBER MUMBAI; ., DATED : 28 TH OCT. 2014. ../ JV, SR.PS . ITA NO.1077/MUM/2013 4 ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+&/ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. : ( ) / THE CIT, MUMBAI. 4. : / CIT(A)-13, MUMBAI 5. 8=6 '& , , / DR, ITAT, MUMBAI 6. 6> ? / GUARD FILE. ,- ,- ,- ,- / BY ORDER, #8& '& //TRUE COPY// @ @@ @/ // /A B A B A B A B (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI