SW CAPITAL P. LTD, MUMBAI V. DCIT CEN CIR 3(4), MUMBAI

ITA 1865/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8024 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 17-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Assessee Lawyers: GAURAV KABRA LD
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

ITA NO.1865/MUM/2017 M/S. S.W. CAPITAL PRIVATE LIMITED ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.1865/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) M/S. S.W. CAPITAL P V T. LTD. (FORMERLY KNOWN AS SUNTECK WEALTHMAX CAPITAL PVT.LTD.) 4 TH FLOOR, SUNTECK CENTRE 37-40, SUBHASH ROAD VILE PARLE (E), MUMBAI-400 057 / VS. DY. COMMISSIONER OF INCOME T AX CENTRAL CIRCLE-3(4) MUMBAI. ! ./ ./PAN/GIR NO. AAACS-7189-K ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : GAURAV KABRA- LD. AR REVENUE BY : CHAUDHARY ARUN KUMAR SINGH - LD.DR / DATE OF HEARING : 12/12/2018 / DATE OF PRONOUNCEMENT : 02/01/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-51, MUMBAI, [CIT(A)], APPEAL NO. CIT(A)-51/IT-8/2015-16 D ATED 08/12/2016 QUA CONFIRMATION OF CERTAIN ADDITIONAL DISALLOWANCE OF RS.7.51 LACS U/S 14A READ WITH RULE 8D. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 3(4), ITA NO.1865/MUM/2017 M/S. S.W. CAPITAL PRIVATE LIMITED ASSESSMENT YEAR:2012-13 2 MUMBAI [AO] IN SCRUTINY ASSESSMENT U/S 143(3) WHERE IN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.70.67 LACS AFTER CERTAIN ADDITIONS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.53.3 3 LACS FILED BY THE ASSESSEE ON 28/09/2012. DURING IMPUGNED AY, THE ASS ESSEE BEING RESIDENT CORPORATE ENTITY WAS ENGAGED AS STOCK BROKER. 2. DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED THA T THE ASSESSEE EARNED EXEMPT DIVIDEND INCOME OF RS.6.09 LACS AND O FFERED SUO-MOTO DISALLOWANCE OF RS.7.89 LACS IN THE COMPUTATION OF INCOME WHICH IS STATED TO BE COMPUTED @0.5% OF AVERAGE VALUE OF INV ESTMENTS. HOWEVER, NOT SATISFIED, LD. AO, INVOKING RULE 8D, C OMPUTED ADDITIONAL DISALLOWANCE OF RS.7.51 LACS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. THE AGGREGATE DISALLOWANCE OF RS.15.41 LA CS AS MADE BY LD. AO COMPRISED-OFF OF INTEREST DISALLOWANCE U/R 8D(2) (II) FOR RS.13.32 LACS AND EXPENSE DISALLOWANCE U/R 8D(2)(III) FOR RS.2.08 LACS. THE STAND OF LD. AO, UPON CONFIRMATION BY FIRST APPELLATE AUTHOR ITY, IS UNDER APPEAL BEFORE US. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED. U PON DUE CONSIDERATION, WE FIND THAT THE ASSESSEE HAS ALREAD Y OFFERED SUO-MOTO DISALLOWANCE OF RS.7.89 LACS AGAINST EXEMPT INCOME OF RS.6.09 LACS AND THEREFORE, FURTHER DISALLOWANCE WAS NOT JUSTIFI ED AS PER SETTLED LEGAL POSITION. ANOTHER NOTEWORTHY POINT IS THE FACT THAT LD. AO, WITHOUT APPRECIATING THE ASSESSEES WORKING, STRAIGHTWAY PR OCEEDED TO APPLY RULE 8D WHICH WAS NOT IN CONSONANCE WITH THE STATUT ORY PROVISIONS SINCE LD. AO WAS OBLIGED TO RECORD A SATISFACTION, HAVING REGARDS TO THE ACCOUNTS OF THE ASSESSEE AS TO HOW THE DISALLOWANCE ARRIVED AT BY THE ASSESSEE WAS INCORRECT. THEREFORE, VIEWING FROM ANY ANGLE, THE ITA NO.1865/MUM/2017 M/S. S.W. CAPITAL PRIVATE LIMITED ASSESSMENT YEAR:2012-13 3 IMPUGNED ADDITIONAL DISALLOWANCE OF RS.7.51 LACS AS MADE BY LD. AO COULD NOT BE SUSTAINED AND HENCE, DELETED. 4. THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND JANUARY, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/0/2019 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. /01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.