PNB Finance & Inds. Ltd., New Delhi V. DCIT, New Delhi

ITA 160/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52551 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 18-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: R K KAPPOR
• Section: 14A

Judgement Text

ITA NO. 160/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 160/DEL/2010 A.Y. : 2006-07 PNB FINANCE & INDS. LTD., 10, DARYA GANJ, NEW DELHI 110 002 (PAN/GIR NO. : AAACP0256G) VS. DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 14(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. R.K. KAPPOR, CA DEPARTMENT BY : SMT. ANUSHA KHURANA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: PER SHAMIM YAHYA: PER SHAMIM YAHYA: PER SHAMIM YAHYA: AM AMAM AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 03.11. 2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSE SSING OFFICER IN DISALLOWING A SUM OF ` 1,37,253/- U/S. 14A OF THE I T ACT. 3. ON THIS ISSUE ASSESSING OFFICER NOTED THAT ASS ESSEE HAS TAX FREE DIVIDEND INCOME. ASSESSING OFFICER ASKED THE ASS ESSEE TO WORK OUT THE EXPENDITURE RELATABLE TO DIVIDEND, AS PER RU LE 8D. ACCORDINGLY, ASSESSING OFFICER PROCEEDED TO DISALLOW ` 137253/- ON THIS ACCOUNT. ITA NO. 160/DEL/2010 2 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT HONBLE MUMBAI HIGH COURT IN THE CASE OF GODREJ BOYCE MFG. CO. LTD . VS. DCIT IN ITA NO. 626 OF 2010 234 CTR 1 HAS OVERRULED THE ITAT DE CISION OF DAGA CAPITAL MANAGEMENT (SUPRA) AND HELD THAT RULE 8D HA S BEEN NOTIFIED ON 24.3.2008 AND WILL BE APPLICABLE ONLY FROM ASSESS MENT YEAR 2008- 09. HENCE, THE PRESENT YEAR IS A.Y. 2006-07 AND RUL E 8D IS CLEARLY NOT APPLICABLE. HENCE, WE FIND THAT DISALLOWANCE MADE B Y THE ASSESSING OFFICER IN THIS REGARD IS NOT SUSTAINABLE. ON THE F ACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINION, AN ESTIMATE D DISALLOWANCE OF ` 30,000/- WILL SERVE THE END OF JUSTICE. ACCORDINGL Y, WE DIRECT THAT AN AMOUNT OF ` 30,000/- BE DISALLOWED U/S 14A IN THIS CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/8/2011, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [C.L. SETHI C.L. SETHI C.L. SETHI C.L. SETHI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 18/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES