SWATI ATUL REGE, MUMBAI V. ITO RG 8(3)(3), MUMBAI

ITA 1492/MUM/2013

• Counselvise Citation: 149219914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 08-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: ANIL SATHE
• Keywords: Reopening of assessment; Business income; Opportunity of being heard; Reason to believe
• Section: 148; 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM) , AND B.R.BASKARAN (AM) , ! ' # . . , ./I.T.A. NO.1492/MUM/2013 ( / ASSESSMENT YEAR : 2009-10) SWATI ATUL REGE, 1301, A WING, PRATHAMESH RESIDENCY, NEAR BHAVANS COLLEGE, J P ROAD, ANDHERI WEST, MUMBAI-400058 $ / VS. INCOME TAX OFFICER, RANGE 8(3)(3), MUMBAI ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN/GIR NO. :AEOPR6459J / ASSESSEE BY: SHRI ANIL SATHE /REVENUE BY : SHRI NEIL PHILIP ! '# / DATE OF HEARING : 8.12.2014 $% '# /DATE OF PRONOUNCEMENT : 14.1.2015 %& / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 14/12/2012 PASSED BY LD CIT(A)-18 MUMBAI FOR ASSESS MENT YEAR 2009-10 IN RESPECT OF FOLLOWING ISSUES:- (A) VALIDITY OF RE-OPENING OF ASSESSMENT (B) DISALLOWANCE MADE U/S 14A OF THE ACT. 2. THE FACTS RELATING TO THE CASE ARE THAT THE A SSESSEE FILED HER RETURN OF INCOME ON 29-09-2009 DECLARING A TOTAL INCOME OF RS.3,24,280/- AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUE NTLY, THE AO NOTICED THAT THE ASSESSEE HAD DECLARED DIVIDEND INCOME OF R S.1,24,377/-, BUT DID NOT MAKE ANY DISALLOWANCE U/S 14A OF THE ACT. HENC E, THE AO RE-OPENED ITA NO.1492/M/13 2 THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT ON 15.11.2010. THE ASSESSEE FILED A LETTER DATED 24.11.2010 STATING TH AT THE RETURN OF INCOME FILED ON 29-09-2009 MAY BE TAKEN ON RECORD. THEREA FTER, THE AO COMPLETED THE ASSESSMENT BY WORKING OUT THE DISALLO WANCE U/S 14A OF THE ACT AS PER RULE 8D OF THE IT RULES AT RS.8,04,312/- . 3. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) UPH ELD THE REOPENING OF THE ASSESSMENT AS WELL AS THE ADDITION MADE BY THE AO U/S 14A OF THE ACT. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFOR E US. 4. WE HEARD THE PARTIES ON THE ISSUE RELATING TO T HE VALIDITY OF RE- OPENING OF ASSESSMENT. ACCORDING TO THE ASSESSEE, SHE IS A TRADER IN SHARES AND SECURITIES AND SHE HAS HELD THE SHARES A S HER STOCK IN TRADE. IT WAS FURTHER SUBMITTED THAT THE INTEREST EXPENDITURE WAS FULLY ALLOWABLE AGAINST HER BUSINESS INCOME AND HENCE THE DISALLOWA NCE U/S 14A OF THE ACT WAS NOT REQUIRED TO BE MADE. ACCORDINGLY, IT W AS CONTENDED THAT THERE WAS NO CASE TO SHOW THAT THERE WAS ESCAPEMENT OF INCOME. ON THE CONTRARY, THE LD D.R PLACED RELIANCE ON THE ORDER O F LD CIT(A) IN THIS REGARD. 5. WE NOTICE THAT THE RETURN OF INCOME FILED BY T HE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT. HENCE, THERE IS N O QUESTION OF FORMING OF ANY OPINION BY THE ASSESSING OFFICER IN THE ORIGINA L ASSESSMENT PROCEEDING. FURTHER, IT IS A FACT THAT THE ASSESSEE HAD DECLARE D DIVIDEND INCOME OF RS.1,24,377/- AND SHE DID NOT MAKE ANY DISALLOWANCE U/S 14A OF THE ACT, EVEN THOUGH THE PROVISIONS OF SEC. 14A IS APPLICABL E TO THE YEAR UNDER CONSIDERATION. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME AND HENCE THE LD CIT(A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF RE- OPENING OF ASSESSMENT. ITA NO.1492/M/13 3 6. THE NEXT ISSUE RELATES TO THE DISALLOWANCE MADE U/S 14A OF THE ACT. IN THIS REGARD, WE AGREE WITH THE CONTENTIONS OF TH E ASSESSEE THAT THE ASSESSING OFFICER HAS TO FIRST CONSIDER THE CLAIM O F THE ASSESSEE BY HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. ONLY THERE AFTER THE ASSESSING OFFICER, IF HE IS NOT SATISFIED WITH THE CORRECTNES S OF THE CLAIM, SHALL PROCEED TO DETERMINE THE DISALLOWANCE TO BE MADE U/S 14A OF THE ACT IN ACCORDANCE WITH THE PROVISIONS OF RULE 8D. IN THIS REGARD, WE MAY REFER TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD (328 ITR 81) AND ALSO THE DECISI ON RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF MAXOPP INVESTMENT L TD (347 ITR 272). 7. IN THE INSTANT CASE, APPARENTLY, BOTH THE TAX A UTHORITIES HAVE NOT EXAMINED THE CLAIM OF THE ASSESSEE OR THE ACCOUNTS OF THE ASSESSEE. HENCE, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FI LE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE BY HAVING REGARD TO HER ACCOUNTS AND TAKE APPROPRIATE DECISIO N IN ACCORDANCE WITH THE LAW. NEEDLESS TO MENTION THAT THE ASSESSEE SHO ULD BE GIVEN NECESSARY OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH JAN, 2015. $% ! & '( )*14TH JAN, 2015 % / 0 SD SD ( %1/& 3 4/ JOGINDER SINGH ) ( . . ,/ B.R. BASKARAN ) & / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' ! MUMBAI: 14TH JAN,2015. ITA NO.1492/M/13 4 . . ./ SRL , SR. PS %& ' (!)* +%*,) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! 6' ( ) / THE CIT(A)- CONCERNED 4. ! 6' / CIT CONCERNED 5. 6. 78/ '1 , # 1 , ' ! / DR, ITAT, MUMBAI CONCERNED /9 : / GUARD FILE. ; ! / BY ORDER, TRUE COPY 4 (ASSTT. REGISTRAR) # 1 , ' ! /ITAT, MUMBAI