ACIT 6(1), MUMBAI V. JAYANT D MHAISKAR, MUMBAI

ITA 1808/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79286 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 30-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I B ENCH, MUMBAI , !', % % % % &' . % . () . % . , !' * BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR.S.T.M. PAVALAN, JUDICIAL MEMBER ./ I.T.A. NO.1808/MUM/2011 ( + + + + / ASSESSMENT YEAR :2007-08 THE ACIT 6(1), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. SHRI JAYANT D.MHAISKAR, PROP. OF M/S. JDV UDYOG RIDEEMA, IRB COMPLEX, CHANDIVALI ROAD, CHANDIVALI VILLAGE, MUMBAI-400 072 ', ./ -. ./ PAN/GIR NO. : AACPM 4695D ( ,/ / APPELLANT ) .. ( 01,/ / RESPONDENT ) ,/ 2 / APPELLANT BY: NONE 01,/ 3 2 / RESPONDENT BY: SHRI SANJEEV JAIN 3 4) / DATE OF HEARING :30.06.2014 56+ 3 4) / DATE OF PRONOUNCEMENT :30.06.2014 !7 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-14, MUMBAI DT.22.01.2010 PERTAINING TO A.Y. 2007-08. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DIRECTING THE AO TO RECOMPUTE THE DISALLOWANCE U/S. 14A ON A REASONABLE ITA NO. 1808/M/2011 2 BASIS RELYING ON THE JUDGEMENT OF HONBLE BOMBAY HI GH COURT IN THE CASE OF GODREJ & BOYCE MFG. LTD. 3. THE ASSESSEE IS AN INDIVIDUAL FOLLOWING MERCANTI LE SYSTEM OF ACCOUNTING. RETURN FOR THE YEAR WAS FILED ON 31.10 .2007 DECLARING TOTAL INCOME AT RS. 21,06,27,214/-. THE RETURN WAS SELEC TED FOR SCRUTINY ASSESSMENT AND STATUTORY NOTICES WERE ISSUED ACCORD INGLY. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID INTEREST ON LOAN TO ITS GROUP COMPANIES. THE AO FURTHER NOTICED THAT THE ASSESSEE HAS MADE I NVESTMENTS IN GROUP COMPANIES. THE AO WAS OF THE FIRM BELIEF THAT DISA LLOWANCE U/S. 14A R.W. RULE 8D WAS TO BE MADE AND THE AO WENT ON TO C OMPUTE THE DISALLOWANCE AT RS. 2,41,52,056/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). THE LD. CIT(A) WAS CONVINCED THAT RULE 8D IS PROSPECTIVE AN D APPLIES W.E.F. 2008-09 AS PER THE DECISION OF THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT 328 ITR 81. THE LD. CIT(A) WAS OF THE FIRM BELIEF THAT WITHOUT APPL YING RULE 8D FOR THE YEAR UNDER CONSIDERATION THE AO MUST ADOPT A REASON ABLE BASIS FOR MAKING A DISALLOWANCE U/S. 14A OF THE ACT. THE LD. CIT(A) ACCORDINGLY DIRECTED THE AO TO RECOMPUTE THE DISALLOWANCE. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREF ORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE. ITA NO. 1808/M/2011 3 7. IT IS A SETTLED LAW THAT RULE 8D IS APPLICABLE F ROM A.Y. 2008-09. HOWEVER, AT THE SAME TIME A REASONABLE DISALLOWANCE NEED TO BE MADE CONSIDERING THE FACTS OF THE CASE. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 30 TH JUNE, 2014. !7 3 6+ 8 9!: 30.6.2014 6 3 ; SD/- SD/- (DR. S.T.M. PAVALAN) (N.K. BILLAIYA) !' /JUDICIAL MEMBER !' / ACCOUNTANT MEMBER MUMBAI; 9! DATED 30.6.2014 . . ./ RJ , SR. PS !7 !7 !7 !7 3 33 3 04 04 04 04 <+4 <+4 <+4 <+4 / COPY OF THE ORDER FORWARDED TO : 1. ,/ / THE APPELLANT 2. 01,/ / THE RESPONDENT. 3. = ( ) / THE CIT(A)- 4. = / CIT 5. >; 04 , , / DR, ITAT, MUMBAI 6. ;& ? / GUARD FILE. !7 !7 !7 !7 / BY ORDER, 14 04 //TRUE COPY// @ @@ @ / A A A A - - - - (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI