LAADKI TRADING & INVESTMENTS P. LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 1116/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3505 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D; Set aside
• Section: 234B; 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER. I.T.A. NO. 1116/MUM/2010. ASSESSMENT YEAR : 2006-07. M/S LADKI TRADING & INVESTMENTS P. LTD., ASSTT. COMMISSIONER OF 107/B, NEELAM CENTRE, HIND CYCLE ROAD, VS. INCOME-TAX- 6(3), WORLI, MUMBAI 400018 MUMBAI. PAN AAACL0640G APPELLANT. RESPON DENT. APPELLANT BY : SHRI AKRAM KHAN. RESPONDENT BY : SHRI PAVAN VED. . O R D E R PER J. SUDHAKAR REDDY, A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-12, MUMBAI DATED 13-11-2009 ON THE FOL LOWING GROUNDS : 1) THIS APPEAL IS AGAINST THE ORDER OF THE COMMISSIONE R OF INCOME-TAX (APPEALS)-12, MUMBAI, AND RELATES TO THE ASSESSMENT YEAR 2006-07. 2) BOTH THE LOWER AUTHORITIES ERRED IN CONFIRMING THE DISALLOWANCE OF RS.55,57,432/- UNDER SECTION 14A READ WITH RULE 8D. 2 3) BOTH THE LOWER AUTHORITIES ERRED IN HOLDING THAT RU LE 8D WAS TO BE APPLIED RETROSPECTIVELY. THE APPELLANT SUBMITS THAT RULE 8D IS SUBSTANTIVE LAW, AND CANNOT BE APPLIED RETROSPECTIV ELY. 4) WITHOUT PREJUDICE TO THE FOREGOING, AND IN ANY EVEN T, BOTH THE LOWER AUTHORITIES ERRED IN DISALLOWING INTEREST UNDER SEC TION 14A TO THE TUNE OF RS.39,07,992/-. THE APPELLANT SUBMITS THAT THE SAID ALLOCATION IS HIGHLY EXCESSIVE AND ARBITRARY, AND REQUIRES TO BE REDUCED SUBSTANTIALLY. 5) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN IGNORING THE DETAILED FACTUAL SUBMISSIONS MADE BEFORE HIM TO DEMONSTRATE THE ASSESSING OFFICERS COMPUTATION WAS HIGHLY EXCESSIV E. 6) WITHOUT PREJUDICE TO THE FOREGOING GROUNDS, AND IN ANY EVENT, THE APPELLANT SUBMITS THAT THE ALLOCATION OF EXPENDITUR E UNDER SECTION 14A READ WITH RULE 8 D TO THE TUNE OF RS.16,43,440/- IS HIGHLY EXCESSIVE AND ARBITRARY, AND IS REQUIRED TO BE REDUCED SUBSTANTIA LLY. 7) BOTH THE LOWER AUTHORITIES ERRED IN NOT GRANTING CR EDIT FRO TAX DEDUCTED AT SOURCE OF RS.40,00,996/-. THE APPELLANT SUBMITS THA T THE ASSESSING OFFICER BE DIRECTED TO GRANT THE SAID INTEREST. 8) BOTH THE LOWER AUTHORITIES ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234B AMOUNTING TO RS.24,07,640/-. THE APPEL LANT DENIES ITS LIABILITY TO BE LEVIED THE SAID INTEREST. 2. AFTER HEARING RIVAL CONTENTIONS WE SET ASIDE GRO UND NOS. 1 TO 6 WHICH ARE ON THE ISSUE OF QUANTIFICATION OF DISALLOWANCE U/S 14A , TO THE FILE OF THE AO WITH A DIRECTION TO FOLLOW THE DECISION OF THE JURISDICTIO NAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. (2010) 234 CT R (BOM.) 1. 3. IN THE RESULT, THESE GROUNDS ARE ALLOWED FOR STA TISTICAL PURPOSES. 3 4. COMING TO GROUND NO. 7, WE DIRECT THE AO TO VERI FY THE CLAIM OF THE ASSESSEE AND TO GRANT CREDIT FOR TAX DEDUCTED AT SO URCE. 5. IN THE RESULT, THIS GROUND IS ALSO ALLOWED FOR S TATISTICAL PURPOSES. 6. COMING TO GROUND NO. 8 WHICH IS ON THE LEVY OF I NTEREST U/S 234B, WE HOLD THAT THIS IS CONSEQUENTIAL IN NATURE. THE AO SHALL RECOMPUTED THE INTEREST ACCORDINGLY. 8. IN THE RESULT, THIS GROUND IS ALSO ALLOWED FOR S TATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DEC. , 2010. SD/- SD/- (VIJAY PAL RAO) (J. SU DHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER MUMBAI, DATED: 31 ST DEC., 2010. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH (TRUE COPY) BY ORD ER ASSTT, REGISTRAR, ITAT, MUMBAI.