ACIT, CHENNAI V. M/s. Shriram Insight Share Brokers Ltd., CHENNAI

ITA 1295/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58009 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R SIVARAMAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 1295/(MDS)/2011 ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-VI(2), CHENNAI 34. VS. M/S. SHRIRAM INSIGHT SHARE BROKERS LTD., NO.4, LADY DESIKA ROAD, MYLAPORE, CHENNAI 600 004. PAN AAACI 2727 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHA JI P. JACOB, IRS, ADDL. COMMISSIONER OF INCOME-TAX RESPONDENT BY : SHRI R.SIVAR AMAN, ADVOCATE DATE OF HEARING :12 TH MARCH, 2012 DATE OF PRONOUNCEMENT :12 TH MARCH, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL FILED BY THE REVENUE RELATES TO THE A SSESSMENT YEAR 2007-08. THE APPEAL IS DIRECTED AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI DA TED ITA 1295/11 :- 2 -: 12.04.2011. THE APPEAL ARISES OUT OF THE ASSESSMEN T COMPLETED UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1961. 2. THE GROUND RAISED BY THE REVENUE IS THAT THE C OMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DELETING THE DI SALLOWANCE MADE UNDER SEC.14A. IT IS THE CASE OF THE REVENUE THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS FAILED TO NOTE THAT THE VERY PURPOSE OF INTRODUCTION OF SEC.14A READ WITH RULE 8D IS TO CON SIDER THE EXPENDITURE INCURRED BY AN ASSESSEE FOR EARNING EXT RA INCOME ON PROPORTIONATE BASIS. THE REVENUE ARGUES THAT THE D ECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & B OYCE MFG. CO. LTD. (328 ITR 81) HAS NOT BECOME FINAL AND SLP HAS BEEN PREFERRED BEFORE THE HONBLE SUPREME COURT. 3. WE HEARD SHRI SHAJI P. JACOB, THE LEARNED COMMIS SIONER OF INCOME-TAX APPEARING FOR THE REVENUE AND SHRI R. SI VARAMAN, THE LEARNED COUNSEL APPEARING FOR THE RESPONDENT- ASSES SEE. 4. IT IS SEEN THAT THE COMMISSIONER OF INCOME-TAX(A PPEALS) HAS RIGHTLY ACCEPTED THE CONTENTION OF THE ASSESSEE THA T RULE 8D IS NOT ITA 1295/11 :- 3 -: APPLICABLE FOR THE ASSESSMENT YEAR 2007-08. IN FAC T THE SAID RULE IS OPERATIVE FROM THE ASSESSMENT YEAR 2008-09. WHEN RULE 8D IS NOT OPERATIVE FOR THE IMPUGNED ASSESSMENT YEAR, THERE I S NO MODUS AVAILABLE TO OPERATE SEC.14A. THESE LEGAL PROPOSIT IONS HAVE BEEN CONSIDERED AND UPHELD BY THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (328 ITR 81) A ND THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS FOLLOWED TH E ABOVE SAID DECISION OF THE HONBLE BOMBAY HIGH COURT. AS ON DATE THERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT AVAILABLE CONTRARY TO THE ONE DELIVERED BY THE HONBLE BOMBAY HIGH COURT AND ALSO THERE IS NO SUCH DECISION BY THE HONBLE APEX COURT. IN THESE CIRCUMSTANCES, THE DECISION OF THE HONBLE BOMBAY HIGH COURT IS IN FACT BINDING ON ALL CONCERNED, AS THE JUDGMENT HAS BEEN DELIVERED B Y A COMPETENT COURT OF LAW. ONE CANNOT DEVIATE FROM THE ABOVE, ONLY FOR THE REASON THAT THE REVENUE HAS FILED SLP BEFORE THE HO NBLE SUPREME COURT. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE F IND THAT THIS APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISS ED. ITA 1295/11 :- 4 -: ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 12 TH OF MARCH, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 12 TH MARCH, 2012. MPO* COPY TO: (1) PETITIONE R (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.