NEPTUNE DEVELOPERS P.LTD, MUMBAI V. DCIT 14(2)(2), MUMBAI

ITA 1400/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9777 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: PARESH SHAPARIA LD
• Section: 143(3); 14A

Judgement Text

ITA NO 1400/MUM/2015 NEPTUNE DEVELOPERS LTD. ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1400/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) NEPTUNE DEVELOPERS LTD (PREVIOUSLY KNOWN AS NEPTUNE DEVELOPERS PVT.LTD) 3 RD BLOCK, NEPTUNE HOUSE, KARMA STAMBH, LBS MARG, VIKHROLI(W) MUMBAI 400 083 / VS. DEPUTY COMMISSIONE R OF INCOME TAX 14(2)(2) AAYKAR BHAVAN, M.K.ROAD MUMBAI -400 020 ! ./ ./PAN/GIR NO. AACCN-0234-C ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : PARESH SHAPARIA, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 23 /08/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2011-12 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-22 [CIT(A)], MUMBAI DATED 22/01/2015 QUA CONFIRMATION OF DISALLOWANCE U/S 14A FOR RS.26,92,848/-. ITA NO 1400/MUM/2015 NEPTUNE DEVELOPERS LTD. ASSESSMENT YEAR 2011-12 2 2. BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN CONSTRUCTION AND REAL ESTATE, WAS ASSESSED U/S 143(3) ON 20/02/2014 AT RS.2,16,32,660/- UNDER NORMAL PROVISIONS AFTER CERTAIN ADDITIONS / DISALLOWANCES AS AGAINST RETURNED INCOM E OF RS.1,89,39,814/- FILED BY THE ASSESSEE ON 30/09/2011. THE ASSESSEE H AS SUFFERED DISALLOWANCE U/S 14A FOR RS.26,92,848/- WHICH IS TH E SOLE SUBJECT MATTER OF THIS APPEAL. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS.12,13,314/- AND CLAIME D THE SAME AS EXEMPT U/S 10(35). AGAINST THE SAME, THE ASSESSEE M ADE SUO-MOTO DISALLOWANCE OF RS.5,26,332/- IN THE COMPUTATION OF INCOME AND SUBMITTED WORKING THEREOF BEFORE LD. AO. HOWEVER, N OT CONVINCED BY THE WORKING OF THE ASSESSEE, LD. AO WORKED OUT DISALLOW ANCE OF RS.32,19,180/- U/S 14A READ WITH RULE 8D(2)(III) FOR ADMINISTRATIVE EXPENSES AND ADDED THE DIFFERENTIAL AMOUNT OF RS.26 ,92,848/- IN THE INCOME OF THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) ON THE PREMISES THAT MAJORITY OF THE INVESTMENTS WERE IN SUBSIDIARY / GROUP CONCERNS AND THE MAIN MOTIVE WAS NOT TO EARN THE DIVIDEND BUT THE SAME WERE IN THE NATURE OF STRATEG IC INVESTMENTS AND THEREFORE, EXCLUDIBLE FOR PURPOSE OF COMPUTATION OF DISALLOWANCE U/R 8D(2)(III). HOWEVER, LD.CIT(A), FOLLOWING ITS PREDECESSORS OR DER IN ASSESSEES OWN CASE FOR AY 2010-11, DISMISSED THE A PPEAL OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN FURTHER APP EAL BEFORE US. ITA NO 1400/MUM/2015 NEPTUNE DEVELOPERS LTD. ASSESSMENT YEAR 2011-12 3 5. THE LD. REPRESENTATIVE FOR ASSESSEE [AR], AT THE OUTSET, DREW OUT ATTENTION TO THE FACT THAT THE ASSESSEE SUFFERED SI MILAR DISALLOWANCE IN AY 2010-11, WHICH WAS CONTESTED UP-TO THE LEVEL OF THIS TRIBUNAL VIDE ITA NO. 6854/MUM/2014 ORDER DATED 02/06/2017. OUR A TTENTION IS FURTHER DRAWN TO PARA-7 OF THE TRIBUNALS ORDER TO CONTEND THAT THE STAND OF THE ASSESSEE HAS BEEN ACCEPTED AND THEREFORE, THE SAME VIEW MAY BE TAKEN IN THE MATTER. THE LD. DR FAIRLY CONCEDED THE SAME. 6. HEARD AND PERUSED CITED ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010-11. WE NOTICE THAT THE COORDINATE BENCH, FOLLOWING RATIO OF GARWARE WALL ROPES LTD. VS ACIT, DIRECTED THE LOWER AUTHORITIES TO EXCLUDE STRATEGIC INVESTMENTS FOR THE PURPOSE OF COMPUTATION OF DISALLOWANCE U/R U/R 8D(2)(III). RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE LD. AO TO REWORK THE DISALLOWANCE AFTER EXCLUDI NG STRATEGIC INVESTMENT FROM THE FIGURE OF TOTAL INVESTMENTS. 7. RESULTANTLY, THE ASSESSEE APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23. 08.2017 SR.PS:- THIRUMALESH ITA NO 1400/MUM/2015 NEPTUNE DEVELOPERS LTD. ASSESSMENT YEAR 2011-12 4 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI