FORTUNE FINANCIAL SERVICES P. LTD, MUMBAI V. DCIT RG 4(1), MUMBAI

ITA 1403/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79482 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 19-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Revised return
• Section: 14A; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 1403/MUM/2013 (ASSESSMENT YEAR: 2009-10) M/S. FORTUNE FINANCIAL SERVICES (I) LTD. DCIT, RANGE 4(1) K.K. CHAMBERS, 2ND FLOOR SIR P.T. ROAD, FORT, MUMBAI 400001 VS. MUMBAI PAN - AAACF0610J APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: MS. PARMINDER DATE OF HEARING: 22.07.2014 DATE OF PRONOUNCEMENT: 22.07.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 8, MUMBAI AND IT PERTAINS TO A.Y. 2009-10. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HE ARD THE LEARNED D.R. AND CAREFULLY PERUSED THE RECORD. 3. FACTS CONCERNING THE ONLY ISSUE IN DISPUTE ARE STAT ED IN BRIEF. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF INVE STMENT BANKING, ETC. THE ORIGINAL RETURN OF INCOME WAS FILED ON 29.09.20 09 WHEREIN IT COMPUTED THE AMOUNT DISALLOWABLE UNDER SECTION 14A READ WITH RULE 8D AT ` 25,66,050/-. THIS WAS REVISED VIDE LETTER DATED 28. 11.2001 WHEREIN THE DISALLOWANCE UNDER SECTION 14A WAS SHOWN AT ` 1,98,516/-. THE AO, WHILE COMPLETING THE ASSESSMENT ON 30.12.2011, OBSERVED T HAT THE ASSESSEE HAVING NOT FILED A REVISED RETURN, AS PER THE PROCE DURE, THE AMOUNT DISALLOWED UNDER SECTION 14A AS PER ORIGINAL RETURN HAS TO BE TAKEN INTO CONSIDERATION IN THE LIGHT OF THE DECISION OF THE A PEX COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT 284 ITR 323. ITA NO. 1403/MUM/2013 M/S. FORTUNE FINANCIAL SERVICES (I) LTD. 2 4. AGGRIEVED, ASSESSEE RAISED A PLEA BEFORE THE CIT(A) THAT THERE WAS A BONAFIDE ERROR IN THE ORIGINAL RETURN; THE CORRECT DISALLOWANCE WORKS OUT TO ONLY ` 1,98,516/-. SINCE THE ASSESSEE CANNOT FILE REVISED RETURN BEYOND THE TIME PRESCRIBED UNDER SECTION 139(5) OF THE ACT, IT MADE A CLAIM BEFORE THE AO BY WAY OF FILING A REVISED COMPUTATION, WHICH OU GHT TO HAVE BEEN CONSIDERED. IT WAS ALSO CONTENDED THAT THE ASSESSEE HAD NOT PAID ANY INTEREST ON THE LOANS DURING THE YEAR AND AS SOON A S THE ERROR IN COMPUTATION WAS NOTICED THE REVISED CLAIM WAS MADE. AT ANY RATE, A PROPER CLAIM ALWAYS CAN BE MADE BEFORE THE CIT(A). 5. THE LEARNED CIT(A) REJECTED THE CONTENTION OF THE A SSESSEE MERELY ON THE GROUND THAT THE ASSESSEE CANNOT REVISE HIS RETU RN BY FILING A REVISED STATEMENT OF INCOME AFTER FILING ORIGINAL RETURN. T HOUGH THERE ARE SEVERAL DECISIONS OF THE ITAT MUMBAI BENCHES WHEREIN THE JU DGEMENT OF THE APEX COURT WAS REFERRED TO AND EXPLAINED THAT IF THE CLA IM OF THE ASSESSEE IS OTHERWISE LEGALLY ALLOWABLE THE SAME DESERVES TO BE CONSIDERED BY THE AO EVEN WITHOUT FILING REVISED RETURN OF INCOME, THE L EARNED CIT(A), HOWEVER, CHOSE TO FOLLOW THE HON'BLE ORISSA HIGH COURT JUDGE MENT DATED 15.12.2011 (247 CTR 137) TO HOLD THAT THE ASSESSEE IS NOT ENTI TLED TO FILE REVISED COMPUTATION OF INCOME. 6. FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED D.R. RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIE S. SINCE NONE APPEARED FOR THE ASSESSEE, WE CALLED UPON THE LEARNED D.R. T O EXPLAIN THE CONTENTS OF THE JUDGEMENT REFERRED TO BY THE LEARNED CIT(A) SO AS TO APPRECIATE THE CORRECTNESS OF THE STAND TAKEN BY THE LEARNED CIT(A ). HOWEVER, THE LEARNED D.R. SUBMITTED THAT THE CASE LAW WAS NOT AVAILABLE READILY. IN OTHER WORDS, SHE REPORTED READY IN THIS APPEAL WITHOUT EVEN GOIN G THROUGH THE CASE LAW REFERRED TO BY THE LEARNED CIT(A). UNDER THESE CIRC UMSTANCES THE CASE WAS TREATED AS HEARD. THE ITAT MUMBAI BENCHES HAVE CONS ISTENTLY TAKEN A STAND THAT IF IT IS A LEGAL CLAIM THE AO IS DUTY BO UND TO BRING TO TAX THE CORRECT INCOME EVEN IF A REVISED RETURN IS NOT FILE D. AT ANY RATE, EVEN AFTER THE DECISION OF THE APEX COURT IN THE CASE OF GOETZE (I NDIA) LTD. THE APPELLATE AUTHORITIES ARE ENTITLED TO ADMIT ADDITIONAL GROUND IF SUCH CLAIM IS OTHERWISE ITA NO. 1403/MUM/2013 M/S. FORTUNE FINANCIAL SERVICES (I) LTD. 3 SUPPORTED BY FACTS AND DESERVES CONSIDERATION. THE ITAT B BENCH, MUMBAI IN THE CASE OF BIRLA SUNLIFE INSURANCE CO. L TD. (ITA NO. 8356, 8357 & 8358/MUM/2010), WHEREIN ONE OF US IS A PARTY, CON SIDERED IDENTICAL ISSUE AND IT WAS HELD THAT THE APPELLATE AUTHORITIES ARE NOT BARRED FROM ADMITTING LEGAL GROUNDS EVEN THOUGH SUCH GROUND IS NOT URGED BEFORE THE TAX AUTHORITIES. CONSISTENT WITH THE VIEW TAKEN THEREIN WE SET ASIDE THE ORDERS PASSED BY THE TAX AUTHORITIES ON THIS ISSUE AND DIR ECT THE AO TO CONSIDER THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2014. SD/- SD/- (B.R. BASKARAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 22 ND JULY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 8, MUMBAI 4. THE CIT 4, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.