HARIANI & CO, MUMBAI V. ASST CIT 16(2), MUMBAI

ITA 1788/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0197 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 15-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: V MOHAN
• Keywords: Earning of tax free income
• Section: 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1788/MUM/2017 (ASSESSMENT YEAR- 2012-13) HARIANI & CO. 1 ST FLOOR, 10, BRUCE STREET BUILDING, HOMI MODY STREET, FORT, MUMBAI-400001 PAN: AACFH4912J VS. A.C.I.T.-16(2), 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-20. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.MOHAN (AR) REVENUE BY : SHRI RAM TIWARI (DR) DATE OF HEARING : 24.08.2017 DATE OF PRONOUNCEMENT : 24.08.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT-5, MUMBAI PASSED U/S 263 OF TH E ACT DATED 28.11.2016 FOR THE AY 2012-13. THE ASSESSEE HAS RAISED THE SOLITARY GR OUND OF APPEAL AGAINST CONFIRMING THE DISALLOWANCE OF RS. 34,758/- U/S 14A OF THE ACT. 2. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE ARGUED THAT THE GROUND OF APPEAL RAISED BY ASSESSEE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE IN ASSESSEES OWN CASE FOR AY 2011-12. THE D. DR FOR THE REVENUE NOT DISPUTED THE CONTENTION OF LD. AR OF THE ASSESSEE. ITA NO.1788/M/20147 HARIANI & CO. 2 3. WE HAVE SEEN THAT THE SIMILAR GROUND OF APPEAL WAS DECIDED BY TRIBUNAL IN ASSESSEES APPEAL FOR AY 2011-12 WITH THE FOLLOWING OBSERVATION: 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FIRM DECLARED TAXABLE INCOME OF RS.3,66,75,300/- ON 21/09/2011. T HE ASSESSEE MADE INVESTMENT IN A SINGLE SCRIPT IN MUTUAL FUND OUT OF OWN FUNDS BY CLAIMING THAT NO INTEREST EXPENDITURE WAS ATTRIBUTABLE FOR SUCH I NVESTMENT. IT WAS ALSO CLAIMED THAT THE ASSESSEE FIRM IS OF SOLICITOR AND ADVOCATES AS SUCH NO PERSON LOOKS AFTER INVESTMENT PORTFOLIO EITHER, MEANING TH EREBY, NO EXPENSES WERE CLAIMED TO BE INCURRED ON SUCH INVESTMENT. HOWEVER, THE LD, ASSESSING OFFICER MADE DISALLOWANCE U/S 14A R.W.R. 8D, THUS, HE MADE DISALLOWANCE OF 0.5% OF THE AVERAGE INVESTMENT AMOUNTING TO RS.22,235/- AND ADDED TO THE TOTAL INCOME. ON APPEAL, THE LD. COMMISSIONER OF INCOME T AX (APPEAL) CONFIRMED THE ADDITION. THE ASSESSEE IS IN FURTHER APPEAL BEF ORE THIS TRIBUNAL. WE FIND THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION FROM HON'BLE' DELHI HIGH COURT IN CIT VS OM PRAKASH KHETAN (2015) 376 ITR 390 (DEL .), WHEREIN, IT WAS HELD THAT IN ORDER TO DISALLOW THE EXPENDITURE, THERE MU ST BE NEXUS BETWEEN THE EXPENDITURE INCURRED AND THE INCOME NOT FORMING PAR T OF THE TOTAL INCOME. THE DISALLOWANCE MADE U/S 14A WAS DELETED BY THE LD. CO MMISSIONER OF INCOME TAX (APPEAL). ON APPEAL, THE TRIBUNAL CONFIRMED THE ORDER OF THE TRIBUNAL AND THE HON'BLE HIGH COURT AFFIRMED THE DECISION OF THE TRIBUNAL. IN VIEW OF THIS MATTER, SINCE NO EXPENDITURE WAS INCURRED BY THE AS SESSEE FOR EARNING EXEMPT INCOME, NO DISALLOWANCE U/S 14A IS WARRANTED. THE L D. ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION. 4. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE, THE APPEAL OF THE ASSESSEE IS ALLOWED WITH OBSERVATION AS CONTAINED I N ORDER DATED 08.08.2016 FOR AY 2011-12 PASSED BY THE TRIBUNAL. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DAY OF AUGUST 2017. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 24/08/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. ITA NO.1788/M/20147 HARIANI & CO. 3 BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/