M/s. Shikha Holding Pvt. Ltd., Kolkata V. ITO, Ward - 11(3), Kolkata, Kolkata

ITA 1607/KOL/2010

• Counselvise Citation: 160723514 RSA 2010
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2010
• Court: TRIBUNAL
• Department Lawyers: H N SINGH LD
• Keywords: Earning of tax free income; Retrospective amendment

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BE NCH B, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . . . ! !! ! . . . . ' '' ' ) ) ) ) !# B.K.HALDAR, ACCOUNTANT MEMBER . $ $ $ $ / ITA NO . 1607 /KOL/2010 %& '(/ ASSESSMENT YEAR : 2006-07 M/S. SHIKHA HOLDING PVT. LTD. VS. INCOME-TAX OFFICER PAN: AAACU 3519K WARD 11(3), KOLKATA *+ /APPELLANT ,-*+ /RESPONDENT *+ . / !/ FOR THE APPELLANT: NONE ,-*+ . / !/ FOR THE RESPONDENT: SHRI H.N SINGH, LD.DR !0 / ORDER . . . . ! !! ! . . . . ' ' ' ') )) ) , , , , !# SHRI B.K.HALDAR, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XII, KOLKATA DATED 29-05-2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL:- 1. THAT, THE LI A.O. WAS NOT JUSTIFIED IN DISALLOWI NG A SUM OF RS.4,60,322 BEING THE PROPORTIONATE EXPENSES ALLEGE DLY ATTRIBUTABLE TO THE ASSESSEES EXEMPT DIVIDEND INCO ME OF RS.1,32,27,526 AND THE LD. CIT(A) HAS ERRED IN SUST AINING THE SAID DISALLOWNCE. 1(A). THAT, THE LD. CIT(A) HAS ERRED IN HOLDING THA T RULE-SD OF L.T. RULES HAS RETROSPECTIVE EFFECT AND CONSEQUE NTLY IT IS APPLICABLE FOR ASSTT. YEAR 2006-07. 1(B). THAT, SINCE SEC.14A(2) & 14A(3) WERE INTRODUC ED W.E.F. 01.4.07, BOTH THE LD. A.O. / CIT(A) HAVE ERRED IN D ISALLOWING PROPORTIONATE EXPENSES ATTRIBUTABLE TO EXEMPT DIVID END INCOME IN TERMS OF THE SAID SUB-SECTIONGWHILE COMPU TING THE ASSSSEES INCOME FOR A.Y. 2006-07. 1(C). THAT, SINCE BEFORE INSERTION OF SEC.14A(2) & 14A(3) W.E.F. 01.4.07, THE I.T. ACT DID NOT PROVIDE FOR AN Y MECHANISM FOR DISALLOWANCE OF EXPENSES FOR EXEMPT INCOME IN A SSTT. YEAR 2006-07, BOTH THE LD. A.O./CIT(A) ERRED IN DISALLOW ING ANY EXPENSES ATTRIBUTABLE TO THE EXEMPT DIVIDEND INCOME IN TERMS OF SEC.14A OF THE L.T. ACT. 2. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND, RESCIND AND SUBSTITUTE ANY OF THE ABOVE-MENTIONED GROUNDS AND A DD ANY FURTHER GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD . 4. THE LD.CIT(A) HAS HELD THAT RULE 8D IS APPLICABL E FOR THE AY 2006-07. HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCEE MF G. CO. LTD VS. DCIT IN APPEAL NO. 626 OF 2010 & WRIT PETITION NO.758 OF 2010 HELD THAT RULE 8D IS APPLICABLE FROM AY 2008-09 ON WARDS. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE LD.CIT(A) AND REMIT THE MATTER BACK TO HIS FILE WIT H THE DIRECTION THAT THE ISSUES OF DISALLOWANCE U/S.14A OF THE ACT SHOULD BE DECIDED ON THE BASIS THAT RULE 8D IS NOT APPLICABLE FOR THE RELEVANT PREVIOUS YEAR AND A FR ESH ORDER BE PASSED AS PER LAW AFTER GIVING THE APPELLANT ADEQUATE OPPORTUNITY OF BEAING HEARD.. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 11-04-2011 SD/- SD/- . .. . . .. . , , , , B.R.MITTAL, JUDICIAL MEMBER . . . . ! !! ! . . . . ' ' ' ' , ! !! !# # # # , B.K.HALDAR, ACCOUNTANT MEMBER. ( (( (1# 1# 1# 1#) )) ) DATE:11-04-2011. !0 . ,2 3!2'4- COPY OF THE ORDER FORWARDED TO: 1. M/S. SHIKHA HOLDING PVT.LTD 91/1 SOUTHERN AVENUE, K OL-29. 2 INCOME-TAX OFFICER, W 11(3), KOL AAYKAR BHAWAN, P-7 CHOWRINGHEE SQ., KOL-69. 3. THE CIT, 4. THE CIT(A)- 5. DR, KOLKATA BENCHES, KOLKATA -2 ,/ TRUE COPY, !0%:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES *PP SR.PS