RARE ENTERPRISES, PUNE V. ADDL CIT RG 12(1), MUMBAI

ITA 1911/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3577 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 26-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: R ASHOKAN
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NO.1911/MUM/2009 : ASST.YEAR 2004-2005 M/S.RARE ENTERPRISES 105, SIR VITHALDAS CHAMBERS 16 MUMBAI SAMACHAR MARG FORT, MUMBAI 400 023. PA NO.AAEFR8176J. VS. THE ADDL.COMMISSIONER OF INCOME-TAX RANGE 12(1) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.ASHOKAN RESPONDENT BY : SHRI JITENDRA YADAV O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 09.02.2009 IN RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. THE ONLY ISSUE IN THIS APPEAL IS AGAINST THE CON FIRMATION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S.14A. THE ASSESSEE IS ENGAGED IN TRADING IN SHARES AND DEBENTURES AND VENTURE CAPITAL CONTRIBUT IONS. THE A.O. COMPUTED THE DISALLOWANCE U/S.14A AT RS.20,64,825. WHEN THE MATT ER CAME UP BEFORE THE LEARNED CIT(A), HE DIRECTED THE ASSESSING OFFICER TO COMPUT E THE DISALLOWANCE U/S.14A AS PER RULE 8D, AGAINST WHICH THE ASSESSEE IS IN APPEA L BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DIS ALLOWANCE U/S 14A IS NO MORE RES INTEGRA IN VIEW OF THE RECENT JUDGMENT DATED 12.08.2010 OF THE HONBLE BOMBAY HIGH COURT IN GODREJ& BOYCE LIMITED VS. ACIT HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE IN CIRCUMSTANCES AS ARE PREVAILING PRESENTLY AND THE DISALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME `REASONABLE BASIS AND NOT RULE 8D. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE ITA NO.1911/MUM/2009 M/S.RARE ENTERPRISES. 2 THE MATTER TO THE FILE OF THE AO FOR DECIDING THE Q UANTUM OF DISALLOWANCE, IF ANY, AS PER THE AFORE NOTED JUDGMENT, AFTER ALLOWING A REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 20 TH DAY OF DECEMBER, 2010. SD/- SD/- ( VIJAY PAL RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 20 TH DECEMBER, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.