DHARMASINH MORARJI POPAT, MUMBAI V. ITO 11(2)(2), MUMBAI

ITA 20/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3841 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 16-05-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 03-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Keywords: Depreciation
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , . ! , '# ' $ BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARO RA, AM ./ I.T.A. NO. 27 & 20/MUM/2011 ( % % % % & & & & / ASSESSMENT YEARS :2004-05 & 2005-06 MR. DHARMASINH MORARJI POPAT, C/O. M/S.MULLA AND MULLA AND CRAIGIE BLUNT AND CAROE, MULLA HOUSE, FORT, MUMBAI 400 001. % % % % / VS. INCOME TAX OFFIER- 11(2)(2), ROOM NO.443, AAYKAR BHAVAN, MK ROAD, MUMBAI - 400 020. ' '# ./ ( ./ PAN/GIR NO. : AAMPP 3239N ( ') / APPELLANT ) .. ( *+') / RESPONDENT ) ') , ' / APPELLANT BY: MS. KOMAL MOTA *+') - , ' / RESPONDENT BY : SMT. R.M.MADHAVI % - .# / DATE OF HEARING : 16/05/2013 / & - .# / DATE OF PRONOUNCEMENT : 16/05/2013 '0 / O R D E R PER I.P.BANSAL,J.M: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE. TH EY ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A)-3, MUMBAI DATED 12/10/2010 FOR ASSESSMENT YEARS 2005-06 AND 2004-05 RESPECTIVELY. GROUNDS OF APPEAL IN BOTH THE APPEALS READ AS UNDER: GROUND OF APPEAL IN ITA NO.27/MUM/2011: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONSI DERING THAT THE DISALLOWANCES OTHER THAN THOSE UNDER SECTION 14A AS NOT HAVING BE EN RAISED AND THEREFORE NOT ADJUDICATED UPON. THE SAME HAVE BEEN TAKEN IN THE M EMO OF APPEAL FILED BEFORE THE ./ I.T.A. NO. 27 & 20/MUM/20111 ( % % % % & & & & / ASSESSMENT YEARS : 2004-05 & 2005-06 2 LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND IN PARTICULAR IN GROUND (1) THEREOF. THE SAME ARE REPEATED HEREIN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN APPLYING SECTION 1 4A TO THE FACTS OF THE APPELLANTS CASE. GROUND OF APPEAL IN ITA NO.20/MUM/2011: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONSI DERING THAT THE DISALLOWANCES OTHER THAN THOSE UNDER SECTION 14A AS NOT HAVING BE EN RAISED AND THEREFORE NOT ADJUDICATED UPON. THE SAME HAVE BEEN TAKEN IN THE M EMO OF APPEAL FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND IN PARTICULAR IN GROUND (2) THEREOF. THE SAME ARE REPEATED HEREIN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN APPLYING SECTION 1 4A TO THE FACTS OF THE APPELLANTS CASE. 2. GROUND NO.1 OF BOTH THE APPEALS RAISES GRIEVANCE REGARDING NON- ADJUDICATION BY LD.CIT(A) IN RESPECT OF DISALLOWANC E OF EXPENDITURE OTHER THAN MADE UNDER SECTION 14A. LD. CIT(A) HAS PRINCIPALLY ADJUDICATED THIS GROUND IN A.Y 2004-05 WITH THE FOLLOWING OBSERVATION: 2.1 GROUND NO. 1 PERTAINS TO AO HAVING ERRED IN D ISALLOWING THE EXPENSES AS CLAIMED BUT INSTEAD DISALLOWED SOME ITEMS TOTALLY A ND OTHER ITEMS AFTER SUBSTANTIAL REDUCTION -AS CAN BE SEEN FROM HIS ASSESSMENT ORDER DATED 11TH DECEMBER 2006. COMPUTATION OF INCOME. AND DISALLOWANCE IS NOT CAPA BLE OF BEING COMPREHENDED. 2.1.2 GROUND NO.1 IS A GENERAL GROUND ARGUING AGA INST .THE DISALLOWANCES MADE AND THAT LD. AO ERRED IN DOING THE SAME. THE GROUND ALSO STATES THAT THE COMPUTATION OF INCOME AND DISALLOWANCE IS NOT CAPA BLE OF BEING COMPREHENDED. IN. SO FAR AS THIS PARTICULAR PORTION OF APPELLANTS GR OUND IS CONCERNED, IT DOES NOT STAND IN THE FACE OF SUBMISSIONS MADE BY APPELLA NT DURING APPELLATE PROCEEDINGS WHICH EXPLAINS HOW DISALLOWANCES ARE MADE BY AO. IN THE WRITTEN SUBMISSION FILED ON 1-9-09 ON PAGE 2, PARA 2, APPELLANT HAS INTER-AL IA STATED AS UNDER: THE ASSESSING OFFICER DURING THE R K. 2003-04 REL EVANT TO A. } 004-05 HAS RELYING UPON HIS PREDECESSORS ORDER FOR A.Y. 2001- 02 AND A.Y 2003-04 DISALLOWED THE CLAIM OF THE APPELLANT MADE TOWARDS ALLOCATION OF SPECIFIC EXPENDITURE AGAINST SPECIFIC SOURCE OF EARNING AN D INSTEAD PRORATED THE ENTIRE EXPENDITURE AGAINST THE EXEMPTED SHARE OF P ROFITS AND THE REMUNERATION RECEIVED FROM THE PARTNERSHIP FIRM AF TER ADHOC ALLOCATION OF 10%. OF THE ARBITRATION PROCEEDS AS EXPENSES FROM T HE ARBITRATION INCOME.... 2.1.1 MOREOVER, IN SO FAR AS THE EXPENSES ARE CONCE RNED, APART FROM THE DISALLOWANCE CALCULATED BY AO U/S.14A WHICH IS COVE RED BY APPELLANT IN GROUND NO.2, THE ASSESSMENT ORDER INDICATES DISALLOWANCE O F EXPENDITURE IN RESPECT OF CAR DEPRECIATION, CAR LOAN, INTEREST, SOCIETY OUTGOINGS AND RESIDENCE ELECTRICITY. HOWEVER, THERE IS NO SPECIFIC MENTION OR PRAYER IN THE GROUNDS IN RESPECT OF THESE EXPENSES NOR HAVE ANY WRITTEN SUBMISSIONS OR ARGUME NTS BEEN MADE IN THIS REGARD. CONSEQUENTLY, THE DISALLOWANCES OTHER THAN U/S .14A ARE CONSIDERED AS NOT HAVING BEEN RAISED AND,. THEREFORE, NOT ADJUDICATED UPON. ./ I.T.A. NO. 27 & 20/MUM/20111 ( % % % % & & & & / ASSESSMENT YEARS : 2004-05 & 2005-06 3 2.1 FOR ASSESSMENT YEAR 2005-06 HE HAS FOLLOWED HIS AFOREMENTIONED ORDER AND HAS DISMISSED THE GRIEVANCE OF THE ASSESSEE. 3. WE HAVE HEARD BOTH PARTIES ON THIS ISSUE. IN TH E INTEREST OF JUSTICE WE RESTORE THIS ISSUE TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO GIVEN AN OPPORTUNITY TO THE ASSESSEE AND RE-ADJUDICATE THE GRIEVANCE OF THE ASSESSEE REGARDING DISALLOWANCE OTHER THAN SECTION 14A OF THE INCOME T AX ACT,1961(THE ACT). 4. IN THE RESULT, GROUND NO.1 OF BOTH THE APPEALS I S CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. 5. GROUND NO.2 OF BOTH THE APPEALS RELATES TO DISAL LOWANCE MADE UNDER SECTION 14A OF THE ACT. LD. CIT(A) HAS RESTORED TH IS ISSUE TO THE FILE OF A.O WITH A DIRECTION TO RE-ADJUDICATE THE DISALLOWANCE IN THE LIGHT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MF G. CO. LTD. 328 ITR 81(BOM). 6. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND WE FIND NO INFIRMITY IN THE DIRECTIONS GIVEN BY LD. CIT(A) TO THE AO TO RE -ADJUDICATE THE ISSUE OF DISALLOWANCE UNDER SECTION 14A BY ADOPTING A REAS ONABLE BASIS IN THE LIGHT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F GODREJ & BOYCE MFG. CO. LTD.(SUPRA). WE DECLINE TO INTERFERE. THEREFORE, GROUND NO.2 OF BOTH THE APPEALS IS DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS ARE CONSIDERED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2013 . '0 - & #' 1 2%3 16/05/2013 - 4 SD/- SD/- ( SANJAY ARORA) (I.P.BANSAL) /ACCOUNTANT MEMBER '# /JUDICIAL MEMBER MUMBAI; 2% DATED 16/05/2013 ./ I.T.A. NO. 27 & 20/MUM/20111 ( % % % % & & & & / ASSESSMENT YEARS : 2004-05 & 2005-06 4 . % . .VM , SR. PS '0 '0 '0 '0 - -- - *.56 *.56 *.56 *.56 7'6&. 7'6&. 7'6&. 7'6&. / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 694 *.% , , / DR, ITAT, MUMBAI 6. 4: ; / GUARD FILE. '0% '0% '0% '0% / BY ORDER, +6. *. //TRUE COPY// < << < / = = = = (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI