M/s. Sunita Bonds & Holdings Ltd., Kolkata V. ITO, Ward - 12(2), Kolkata, Kolkata

ITA 1724/KOL/2010

• Counselvise Citation: 172423514 RSA 2010
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 11-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2010
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: S JHAJHARIA
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , SMT.DIVA SINGH, JUDICIAL MEMBER. /AND ! ! ! ! !' !' !' !' , #$ SHRI AKBER BASHA, ACCOUNTANT MEMBER % % % % / ITA NO . 1724/KOL/2010 &' ()/ ASSESSMENT YEAR : 2007-08 (+, / APPELLANT ) M/S.SUNITA BONDS & HOLDINGS LTD., KOLKATA (PAN : AADCS 6056 L) - & - - VERSUS - . (./+,/ RESPONDENT ) I.T.O., WARD-12(2), KOLKATA, +, 0 1 #/ FOR THE APPELLANT: SHRI S.JHAJHARIA ./+, 0 1 #/ FOR THE RESPONDENT: SHRI P.C.NAYAK #' / ORDER ( (( ( ) )) ), ,, , PER SMT.DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29.05.2010 OF THE CIT(A)-XII, KOLKATA PERTAINING TO 2007-08 ASSESSMEN T YEAR WHEREIN THE SOLE ISSUE AGITATED BY THE ASSESSEE IN GROUND NO.1AND 2 PERTA INS TO THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE CIT(A) U/S 14A OF THE ACT A PPLYING RULE 8D(2) OF THE IT RULES. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS IN AS MUCH A S IN REGARD TO THE EXEMPTED DIVIDEND INCOME OF RS.5,52,420/- THE ARGUMENTS ON B EHALF OF THE ASSESSEE HAVE BEEN THAT FOR THE YEAR UNDER CONSIDERATION RULE 8D WOULD NOT APPLY AS HAS BEEN DONE BY THE AO AND CONFIRMED BY THE CIT(A). IN SUPPORT OF THE S AID ASSERTION RELIANCE WAS PLACED UPON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD VS DCIT 328 ITR 81 (BOM). IN THE LIGHT OF THIS POSITION OF LAW, IT 2 WAS HIS SUBMISSION THAT FOLLOWING THE CONSISTENT OR DERS OF THE KOLKATA BENCH OF THE TRIBUNAL THE DISALLOWANCE AT BEST MAY BE RESTRICTED TO 1% OF THE EXEMPTED INCOME. IT WAS HIS SUBMISSION INVITING ATTENTION TO THE MATERI AL ON RECORD THAT THE ASSESSEE HAS USED ITS OWN FUNDS AND NO BORROWED FUNDS HAVE BEEN APPLIED FOR EARNING THIS INCOME. 3. THE STAND OF THE DEPARTMENT, ON THE OTHER HAND, WAS THAT THE AO AND THE CIT(A) HAVE BEEN CORRECT IN MAKING THE DISALLOWANCE FOLLOWING THE ORDER OF THE SPECIAL BENCH IN THE CASE OF DAGA CAPITAL MANAGEMEN T PVT. LTD. 117 ITD 169 (MUM) HOWEVER, IN VIEW OF THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IT WAS HIS SUBMISSION THAT IT CANNOT BE DISPUTED THAT RULE 8D WOULD NOT APPLY IN THE YEAR UNDER CONSIDERATION. 4. ACCORDINGLY CONSIDERING THE POSITION OF LAW AS H AS BEEN SET OUT BY THE HONBLE BOMBAY HIGH COURT IN GODREJ AND BOYCE MFG.CO. LTD. IT IS SEEN THAT RULE 8D WOULD NOT HAVE ANY APPLICATION IN THE YEAR UNDER CONSIDER ATION. AS SUCH IN THE LIGHT OF AFORE MENTIONED FACTS, CIRCUMSTANCES AND SUBMISSIONS, WE ARE OF THE VIEW THAT IT WOULD BE APPROPRIATE TO RESTRICT THE DISALLOWANCE TO 1% AS H AS BEEN CONSISTENTLY HELD BY VARIOUS ORDERS OF THE TRIBUNAL NAMELY ITA NO.1636/KOL/2010 IN THE CASE OF FENNER (INDIA) LIMITED, FORMERLY KNOWN REDICAL RESEARCH LTD VS ITO WARD ORDER DATED 26.10.2010 WHEREIN THE TRIBUNAL HAS TAKEN THE EXPENDITURE ATTR IBUTABLE TO EARNING OF DIVIDEND AT 1% OF THE DIVIDEND INCOME. AND ITA NO.123/KOL/2010 IN THE CASE OF ITO, WARD VS M/S. B.P.S.SECURITIES (P) LTD. DATED 19.08.2010 WHE REIN RELIANCE HAS BEEN PLACED UPON THE TRIBUNAL ORDERS VIDE ITA NO.859/KOL/2010 I N THE CASE OF M/S. CIVIL ENGINEERS (P) LTD. ACCORDINGLY THE ISSUE IS RESTORE D TO THE FILE OF THE AO TO RESTRICT THE DISALLOWANCE TO 1% OF THE DIVIDEND INCOME. 3 5. `IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED AS PER THE PRONOUNCEMENT MADE IN THE OPEN COURT IN THE PRESENCE OF THE PARTI ES ON THE DATE OF HEARING ITSELF I.E. 11.05.2011. SD/- SD/- ! !' ! !' ! !' ! !', ,, , #$ #$ #$ #$ AKBER BASHA, ACCOUNTANT MEMBER , , , , DIVA SINGH, JUDICIAL MEMBER. ( (( (2$ 2$ 2$ 2$) )) ) DATE : 11.05.2011. #' 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S. SUNITA BONDS & HOLDINGS LTD., C/O M/S. SALARPU RIA JAGODIA & CO., 7,C.R.AVENUE, KOLKATA-700072. 2 THE I.T.O., WARD-12(2), KOLKATA 3. THE CIT, 4. THE CIT(A)-XII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #'&;/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)