CORBEL ESTATE AND INVESTMENT P.LTD, MUMBAI V. ADDL CIT 6(2), MUMBAI

ITA 1082/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3962 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K AGARWAL
• Assessee Lawyers: PRAKASH BAPAT
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.1082/MUM/2014 ASSESSMENT YEAR-2009-10 CORBEL ESTATE AND INVESTMENT PRIVATE LTD .(MERGED WITH ANDROMEDA INVESTMENT AND FINANCE PVT. LTD., SUBSEQUENTLY, MERGED WITH PRUDENTIAL MANAGEMENT AND SERVICES PRIVATE LTD. W.E.F. 01 ST APRIL 2010 , MAHINDRA TOWERS, DR. G. M. BHOSLE MARG, P.K. KURNE CHOWK, WORLI, MUMBAI-400018 / VS. ADDL. CIT, RANGE-6(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 PAN NO. AAACC2210M ( /ASSESSEE) ( / REVENUE) / ASSESSEE BY SHRI PRAKASH BAPAT / REVENUE BY SHRI V. K. AGARWAL -DR ITA NO.1082/MUM/2014 CORBEL ESTATE AND INVESTMENT PRIVATE LTD 2 ! / DATE OF HEARING : 16/05/2016 ! / DATE OF ORDER: 16/05/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 05/12/2013 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. 2. DURING HEARING OF THIS APPEAL, THE LD.COUNSEL F OR THE ASSESSEE, SHRI PRAKASH BAPAT, DID NOT PRESS GRO UNDS NUMBER 1 TO 3 WITH RESPECT TO DISALLOWANCE OF INTER EST EXPENDITURE OF RS.279 LAKHS, THEREFORE, THESE GROUN DS ARE DISMISSED AS NOT PRESSED. 2.1. THE ONLY GROUND PRESSED BY THE ASSESSEE IS WI TH RESPECT TO NOT DIRECTING THE ASSESSING OFFICER TO R ESTRICT THE DISALLOWANCE U/S 14A READ WITH RULE-8D TO RS.392.40 LAKHS IN PLACE OF RS.728.02 LAKHS. THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE ASSESSEE, IS IDENTICAL TO THE GROUND RAISED. OUR ATTENTION WAS INVITED TO COMPUTA TION OF ITA NO.1082/MUM/2014 CORBEL ESTATE AND INVESTMENT PRIVATE LTD 3 INCOME. ON THE OTHER HAND, THE LD. DR, SHRI V. K. AGARWAL, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE HAD DISALLOWED RS.7.28 CORES ON ITS OWN WHILE CALCULATING THE DISALLOWANCE U/S 14A OF T HE ACT. THE ASSESSING OFFICER MADE A DISALLOWANCE OF RS.4.6 4 CORES INVOKING THE PROVISIONS OF SECTION 36(1)(III) OF TH E ACT. THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAD DIRECTE D THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO T HE EXTENT OF INTEREST EXPENDITURE CLAIMED IN THE PROFIT & LOS S ACCOUNT. HOWEVER, HE DID NOT ACCEDE TO THE REQUEST OF THE ASSESSEE THAT WHILE MAKING THE DISALLOWANCE, PROVIS IONS OF SECTION 14A READ WITH RULE 8D(II) SHOULD BE FOLLOWE D. HE HELD THAT THE EXEMPT INCOME CONSISTED OF DIVIDEND I NCOME ONLY AND HENCE DISALLOWANCE WAS JUSTIFIED. WE ARE O F THE OPINION THAT WHILE CALCULATING THE INTEREST EXPENDI TURE OR THE ADMINISTRATIVE EXPENDITURE, ASSESSING OFFICER S HOULD FOLLOW FORMULA PRESCRIBED IN THE RULE 8D OF THE RUL ES. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO EXA MINE THE ITA NO.1082/MUM/2014 CORBEL ESTATE AND INVESTMENT PRIVATE LTD 4 CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW AND TO CALCULATE THE INTEREST DISALLOWANCE AS PER RULE 8D, THEREFORE, THIS GROUND FOR THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 16/05/2016. SD/- SD/- (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; $ DATED : 16/05/2016 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. &' () / THE APPELLANT (RESPECTIVE ASSESSEE) 2. *+() / THE RESPONDENT. 3. , , - ( &' ) / THE CIT, MUMBAI. 4. , , - / CIT(A)- , MUMBAI, 5. /01 * 2 , , &' ! &23 , / DR, ITAT, MUMBAI 6. 14 5 / GUARD FILE. / BY ORDER, +/' * //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI