ALLANA COLD STORAGE P.LTD, MUMBAI V. ADDL CIT RG 1(1), MUMBAI

ITA 1887/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0146 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1887/MUM/2015 (ASSESSMENT YEAR- 2009-10) ALLANA COLD STORAGE PVT. LTD. ALLANA HOUSE, 4, J.A. ALLANA MARG, COLABA, MUMBAI-400001 PAN: AAACA5972E VS. ACIT RANGE-1(1 ) INCOME TAX OFFICE, 5 TH FLOOR, ROOM NO. 538, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI APURVA SHAH ( AR) REVENUE BY : SHRI RAJESH KUMAR YADAV (DR) DATE OF HEARING : 15.01.2018 DATE OF PRONOUNCEMENT : 09.03.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, MUMBAI, [FOR SHORT THE LD. CIT(A)] DATED 23.12.2014 FOR ASSESSMENT YEAR 2009-2010. THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: THE COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBA I ERRED:- 1.1 IN CONFIRMING A DISALLOWANCE U/S 14A OF RS.21,5 1,645/- BY INVOKING THE PROVISIONS OF RULE 8D ALTHOUGH ON FACTS, THERE WAS NO CASE FOR APPLYING SAID RULE. 1.1.1 IN APPLYING RULE 8D WITHOUT GIVING ADEQUATE REASONS AS TO HOW HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE EXPENDITURE SHOWN BY THE APPELLANT. 1.1.2 IN APPLYING RULE 8D EVEN IN CASE OF INVESTMEN TS WHERE NO DIVIDEND HAD BEEN RECEIVED DURING THE YEAR. 1.1.3 IN APPLYING RULE 8D EVEN IN CASE OF LONG TERM STRATEGIC INVESTMENTS. ITA NO. 1887/MUM/2 015- ALLANA COLD STORAGE PVT. LTD. 2 1.1.4 WITHOUT PREJUDICE, IN NOT CONSIDERING THAT TH E HON'BLE ITAT HAD ALREADY ESTIMATED RS. 1,00,000/- AS DISALLOWABLE FOR AY 200 7-08 FOR THE SAME INVESTMENTS AND THAT HENCE NO FURTHER DISALLOWANCE WAS WARRANTED FOR. 1.1.5 IN CONFIRMING THE DISALLOWANCE BASED ON PRESU MPTIONS AND SURMISES. 2. AT THE OUTSET OF HEARING, THE LD. AUTHORISED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED BY ASSESSEE IS COVERED IN FAVOUR OF ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2 011-12 & 2010-11 IN ITA NO. 2366 & 2367/MUM/2015. THE LD. AR OF THE ASS ESSEE FURTHER SUBMITS THAT THE DISALLOWANCE UNDER SECTION 14A MAY BE RESTRICTED ONLY TO THE INVESTMENTS WHICH YIELDED THE EXEMPT INCOME DUR ING THE YEAR. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE CO NCEDED THAT THE CASE OF COVERED BY THE DECISION OF SUBSEQUENT ASSESSMENT YEAR. 3. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AN D FIND THAT IN ASSESSEES OWN CASE, THE CO-ORDINATE BENCH OF TRIBU NAL IN ASSESSEES OWN CASE IN SUBSEQUENT ASSESSMENT YEAR HAS PASSED THE F OLLOWING ORDER: 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE DELHI SPECIAL BENCH I N THE CASE OF ACIT V. VIREET INVESTMENTS PRIVATE LIMITED (SUPRA). WE OBSERVE THAT THE SPECIAL BENCH OF THE DELHI TRIBUNAL HELD THAT ONLY THOSE INVESTMENTS ARE TO BE CONSIDERED FOR COMPUTING AVERAGE VALUE OF INVESTMENTS WHICH YIELDE D EXEMPT INCOME DURING THE YEAR. THEREFORE, RESPECTFULLY FOLLOWING THE SAI D DECISION, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE UNDER RULE 8D(2)(III) BY CONSIDERING ONLY THOSE INVESTMENTS WHICH YIELDED EX EMPT INCOME DURING THE YEAR AND RECOMPUTE THE INCOME ACCORDINGLY. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL GIVE ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. SINCE WE FOLLOWED ITA.NO.2366 & 2367/MUM/2015 (A.Y.2011-1 2) ALLANA COLD STORAGE PRIVATE LIMITED THE ORDER OF THE SPECIAL BE NCH TRIBUNAL AND HELD THAT ITA NO. 1887/MUM/2 015- ALLANA COLD STORAGE PVT. LTD. 3 THE ONLY THE INVESTMENTS YIELDING DIVIDEND INCOME S HOULD BE CONSIDERED FOR DISALLOWANCE UNDER RULE 8D(2)(III) THE OTHER CONTEN TIONS RAISED BY THE ASSESSEE NEED NOT GONE INTO AS THEY ARE NOT RELEVANT AS SUBM ITTED BY LD.A.R. 4. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR SUBSEQUENT ASSESSMENT YEAR IN ITA NO. 2366 & 2367/MUM/2015 DAT ED 20.12.2017, THIS APPEAL IS ALSO RESTORED TO THE FILE OF ASSESSI NG OFFICER. THE ASSESSING OFFICER IS DIRECTED TO FOLLOW THE DECISION OF SPECI AL BENCH OF DELHI TRIBUNAL IN VIREET INVESTMENT PRIVATE LTD (SUPRA) AND ASSESS EES OWN CASE FOR FOR ASSESSMENT YEAR 2010-11 AND 2011-12 IN ITA NO.2376 & 2366/M/2015 DATED 20.12.2017. NEEDLESS TO SAY THAT BEFORE PASSI NG THE ORDER, THE ASSESSING OFFICER SHALL GRANT ADEQUATE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DAY OF MARCH 2018. SD/- SD/- ( G.S. PANNU ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 09/03/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE C