DCIT RG 4(1), MUMBAI V. ANVIL SHARE & STOCK BROKING P. LTD, MUMBAI

ITA 1080/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78647 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 01-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: K SHIVRAM AJAY R SINGH
• Section: 143(3); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . , . , ! BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.1080/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 THE DCIT-4(1), ROOM NO.640, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 ' ' ' ' / VS. M/S. ANVIL SHARE & STOCK BROKING PVT. LTD., 19, BANK STREET, CROSS LANE, NEAR VOLTAS, FORT, MUMBAI 400 023. $ ./ % ./ PAN/GIR NO. : AABCA 8643D ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $& ) / APPELLANT BY: SHRI ASHOK SURI '($& * ) / RESPONDENT BY : S/SHRI K.SHIVRAM, AJAY R.SINGH & NEELAM JADHAV ' * +, / DATE OF HEARING : 01/042014 -.# * +, / DATE OF PRONOUNCEMENT : 01/04/2014 / / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-9,MUMBAI DATED 23/11/2010 FOR ASSESSM ENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.21,22,756/- MA DE U/S. 14A R.W.RULE 8D OF INCOME TAX ACT BY ASSESSING OFFICER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER OF LD. CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY MERI TS TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ./ I.T.A. NO.1080/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 2 2. THE ASSESSEE HAS EARNED EXEMPTED DIVIDEND INCOME OF RS.1,48,03,065/-. THE AO WORKED OUT THE DISALLOWANCE AS PER RULE 8D R .W.S. 14A OF THE INCOME TAX ACT, 1961 (THE ACT) AT A SUM OF RS.21,22,756/-. TH E DISALLOWANCE WAS AGITATED IN THE APPEAL FILED BEFORE LD. CIT(A), WHO HAS RESTRI CTED THE DISALLOWANCE TO 5% OF THE DIVIDEND INCOME AND THE BALANCE DISALLOWANCE IS DELETED. THE DEPARTMENT IS AGGRIEVED, HENCE, HAS FILED AFOREMENTIONED GROUNDS . 3. LD. DR SUBMITTED THAT RULE 8D IS NOT APPLICABLE FOR THE SUBJECT ASSESSMENT YEAR, BUT KEEPING IN VIEW THE VOLUME O F EXEMPTED DIVIDEND INCOME, IT IS REASONABLE TO MAKE DISALLOWANCE OF RS.21,22, 756/-. THUS, IT WAS SUBMITTED BY LD. DR THAT LD. CIT(A) WAS WRONG IN RESTRICTING THE DISALLOWANCE TO 5% OF THE DIVIDEND INCOME. 4. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR TH AT IN RESPECT OF ASSESSMENT YEAR 2005-06 THE AO HIMSELF HAS DISALLOW ED ONLY 5% OF THE EXEMPTED DIVIDEND INCOME. IN THIS REGARD LD. AR REFERRED TO THE COPY OF ASSESSMENT ORDER FOR A.Y 2005-06 DATED 21/3/2007 PASSED UNDER SECTIO N 143(3) OF THE ACT., WHEREIN THE AO HAS MADE DISALLOWANCE OF RS.2,83,656 /- IN RESPECT OF EXEMPTED DIVIDEND INCOME OF RS.56,73,113/-. LD. AR HAS ALS O MADE REFERENCE TO THE ASSESSMENT ORDER FOR A.Y 2006-07, COPY OF WHICH IS FILED AT PAGES 22 TO 27 OF THE PAPER BOOK. IN THAT YEAR ALSO DISALLOWANCE IS MA DE OF RS.3,56,209/- BEING 5% OF THE EXEMPTED DIVIDEND INCOME OF RS.71,24,183/-. THUS IT WAS PLEADED BY HIM THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN RESTRIC TING THE DISALLOWANCE AT 5% OF THE DIVIDEND INCOME. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE AO HIMSELF IN IMMEDIATE PRECEDING ASSESSMENT YEARS I.E. A.Y 2005-06 AND 2006-07 HAS ADOPTED THE POLICY OF MAK ING DISALLOWANCE OF 5% OF EXEMPTED DIVIDEND INCOME. IN THIS VIEW OF THE SITU ATION, AFTER HEARING BOTH THE PARTIES, WE DO NOT FIND ANY ERROR IN THE ORDER OF L D. CIT(A) VIDE WHICH IT HAS BEEN ./ I.T.A. NO.1080/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 3 HELD THAT DISALLOWANCE OF 5% OF EXEMPTED INCOME WOU LD MEET THE ENDS OF JUSTICE . ACCORDINGLY, WE DECLINE TO INTERFERE AND REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/04/2014 . / * -.# 0 1'2 01/04/2014 . * 3 SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 1' DATED 01/04/2014 . ' . .VM , SR. PS / / / / * ** * '+4 '+4 '+4 '+4 54#+ 54#+ 54#+ 54#+ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 473 '+' , , / DR, ITAT, MUMBAI 6. 38 9 / GUARD FILE. /' /' /' /' / BY ORDER, (4+ '+ //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI