DANDAVATI INVESTMENT & TRADING CO. P.LTD, MUMBAI V. DCIT 1(3)(2), MUMBAI

ITA 1202/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5597 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 20-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI LD DR
• Section: 14A; 115JB

Judgement Text

ITA.NO.1202/MUM/2017 DANDVATI INVESTMENTS & TRADING CO. PVT. LTD ASSESSMENT YEAR-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO.1202/MUM/2017 ( ASSESSMENT YEAR: 2012-13) DANDVATI INVESTMENTS & TRADING CO.PVT.LTD C/O HINDUSTAN DORR-OLIVER LTD 5 TH FLOOR, THE INTERNATIONAL 16, NEW MARINE LINES CROSS ROAD NO.1, CHURCHGATE MUMBAI-400 020 VS. DEPUTY COMMISSIONER OF INCOME TAX-1(3)(2) MUMBAI ! ' PAN/GIR NO. AAACD-3925-E ( !# APPELLANT ) : ( $%!# RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : RAM TIWARI, LD. DR & DATE OF HEARING : 25/07/2018 '() / DATE OF PRONOUNCEMENT : 31/07/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-2/IT/164-A/2015-16 DATED 11/11/2016 QUA CONFIRMATION OF DISALLOWANCE U/S 14A. THE SECOND ITA.NO.1202/MUM/2017 DANDVATI INVESTMENTS & TRADING CO. PVT. LTD ASSESSMENT YEAR-2012-13 2 GROUND PERTAINS TO ADJUSTMENT OF LEGAL & PROFESSION AL EXPENSE U/S 115JB. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJOURNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE P ROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE, SHRI RAM TIWARI. 2. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER INCOME TAX-1(3)(2), MUMBAI [AO] U/S 14 3(3) OF THE INCOME TAX ACT,1961 ON 05/01/2015 WHEREIN THE LOSS OF THE ASSESSEE HAS BEEN DETERMINED AT RS.67.42 LACS UNDER NORMAL P ROVISIONS AFTER DISALLOWANCE OF RS.18.58 LACS U/S 14A AS AGAINST RE TURNED LOSS OF RS.86.01 LACS E-FILED BY THE ASSESSEE ON 06/08/2013. THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE PRIMARILY ACTED AS INVESTMENT HOLDING INCOME. THE SURPLUS FUNDS AS INVESTED IN BANK FIXED DEPOSIT S AND MUTUAL FUNDS YIELDED INCOME IN THE SHAPE OF INTEREST & DIV IDEND INCOME. THE ASSESSEE CLAIMED EXEMPT DIVIDEND INCOME OF RS.123.3 5 LACS WHICH CALLED FOR DISALLOWANCE U/S 14A. THE ASSESSEE SUBMI TTED THAT NO EXPENSES WERE INCURRED TO EARN THE AFORESAID INCOME . HOWEVER, NOT CONVINCED LD. AO, APPLYING RULE 8D, COMPUTED AGGREG ATE DISALLOWANCE OF RS.18.58 LACS WHICH COMPRISED OF DIRECT EXPENSE DISALLOWANCE U/R 8D(2)(I) FOR RS.0.99 LACS, INTEREST DISALLOWANCE U/ R 8D(2)(II) FOR RS.1.36 LACS AND INDIRECT EXPENSE DISALLOWANCE U/R 8D(2)(II I) FOR RS.16.22 LACS. CONSEQUENTLY, THE LOSS CLAIMED BY THE ASSESSEE WAS REDUCED TO THAT EXTENT. THE INCOME FOR THE PURPOSE OF SECTION 115JB WAS COMPUTED AT RS.433.40 LACS. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 11/11/2 016 WHEREIN LD. ITA.NO.1202/MUM/2017 DANDVATI INVESTMENTS & TRADING CO. PVT. LTD ASSESSMENT YEAR-2012-13 3 CIT(A) AFTER THOUGHTFUL CONSIDERATION OF THE FACTUA L MATRIX DELETED INTEREST DISALLOWANCE U/R 8D(2)(II) FOR RS.1.36 LACS AND CON FIRMED THE BALANCE DISALLOWANCE. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS SUPPORTED THE STAND OF LOWER AUTHORI TIES. 4. WE HAVE CAREFULLY HEARD THE SUBMISSIONS AND PERU SED RELEVANT MATERIAL ON RECORD. UPON DUE CONSIDERATION, WE FIND THAT THE ASSESSEE WAS ENGAGED ONLY IN INVESTMENT ACTIVITIES DURING IM PUGNED AY AND ITS PRIMARY SOURCE OF INCOME WAS INTEREST AND DIVIDEND INCOME. THIS BEING THE CASE, DISALLOWANCE U/S 14A READ WITH RULE 8D WAS RIGHTLY INVOKED BY THE LOWER AUTHORITIES. THE LD. FIRST APPELLATE AUTH ORITY, WITH DUE APPLICATION OF MIND, HAS ALREADY CONSIDERED THE SUB MISSIONS MADE BY THE ASSESSEE AND ALLOWED PARTIAL RELIEF AGAINST INT EREST DISALLOWANCE WHICH WAS QUITE FAIR AND JUSTIFIED. ONE OF THE GROU NDS TAKEN IN THE APPEAL IS THAT NO DISALLOWANCE IS CALLED FOR AGAINST STRAT EGIC INVESTMENTS. THE SAID SUBMISSIONS, IN VIEW OF RECENT JUDGMENT OF HON BLE APEX COURT RENDERED IN MAXOPP INVESTMENT LTD. VS CIT [12/02/2018 91 TAXMANN.COM 154] DO NOT HOLD MUCH WATER. THEREFORE, THIS GROUND OF APPEAL STAND DISMISSED. 5. IN THE SECOND GROUND, THE ASSESSEE IS AGGRIEVED BY NON- ADJUDICATION OF GROUND RELATED WITH ADJUSTMENT OF LEGAL & PROFE SSIONAL EXPENSES OF RS.17.53 LACS U/S 115JB, BY LD. CIT(A). WE FIND THAT THIS GROUND WAS RAISED BY THE ASSESSEE BEFORE LD. CIT(A) AS GROUND NUMBER-6 BUT THE SAME HAS REMAINED TO BE ADJUDICATED. THERE FORE, THIS ISSUE STAND REMITTED BACK TO THE FILE OF LD. CIT(A) FOR ADJUDICATION WITH A DIRECTION TO THE ASSESSEE TO THE SUBSTANTIATE THE S AME. THIS GROUND STAND ALLOWED FOR STATISTICAL PURPOSES. ITA.NO.1202/MUM/2017 DANDVATI INVESTMENTS & TRADING CO. PVT. LTD ASSESSMENT YEAR-2012-13 4 6. RESULTANTLY, THE ASSESSEES APPEAL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER *& MUMBAI; DATED : 31.07.2018 SR.PS:-THIRUMALESH ! COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - -) *& / DR, ITAT, MUMBAI 6. , ./0 & GUARD FILE ' / BY ORDER, # '$% (DY./ASSTT.REGISTRAR) *& / ITAT, MUMBAI