BARODA INDUSTRIES P. LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 2078/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8624 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 03-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARIGOVIND SINGH
• Keywords: Opportunity of being heard
• Section: 143(3); 14A

Judgement Text

I.T.A NO.2078/ MUM/2009 BARODA INDUSTRIES P.LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. [ CORAM: D.MANMOHAN, V.P. AND PRAMOD KUMAR, AM ] I.T.A NO.2078/ MUM/2009 ASSESSMENT YEAR: 2005-2006 BARODA INDUSTRIES P.LTD. .. APPELLANT BAJAJ BHAVAN, 2 ND FLOOR, JAMNALAI, BAJAJ MARG, 226, NARIMAN POINT, MUMBAI-21. PA NO.AAACB 2428 A VS DY.COMMISSIONER OF INCOME TAX 3(1) ,. RESPONDEN T AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 APPEARANCES: M.A.GOHEL, FOR THE APPELLANT HARI GOVIND SINGH, FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CHALLENGED CIT(A)S ORDER DATED 14 TH JANUARY, 2009, IN THE MATTER OF ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2005-06. 2. THE ONLY ISSUE IN THIS APPEAL IS AGAINST DIRECTION OF THE CIT (A) TO THE AO TO COMPUTE DISALLOWANCE UNDER SECTION 14A OF THE ACT AS PER THE PROCEDURE LAID DOWN IN RULE 8D OF THE INCOME TAX RULES, 1962. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE LIKE TH IS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS CLAIMED DIVIDEND INCOME OF ` .2,00,64,970 AS EXEMPT UNDER SECTION 10(34) AND 10(35). THE AO ASKED THE ASSESSEE TO GIVE REASONS WHY THE FINANCIAL CHARGES AND EXPENSES ATTRIBUTABLE TO EARNING OF THE EXEMPTED IN COME SHOULD NOT BE DISALLOWED UNDER SECTION 14A OF THE ACT. AFTER CONSIDERING TH E ASSESSEES SUBMISSIONS, THE AO I.T.A NO.2078/ MUM/2009 BARODA INDUSTRIES P.LTD 2 APPORTIONED THE TOTAL EXPENDITURE AT ` .1,46,490/- AND ARRIVED AT A FIGURE OF ` .88,490/- FOR THE PURPOSE OF DISALLOWANCE UNDER SEC TION 14A OF THE ACT, WHICH WAS SUSTAINED IN THE FIRST APPEAL. 4. BEFORE US, LEARNED REPRESENTATIVES AGREE THAT SO FAR AS THE QUESTION OF DISALLOWANCE U/S.14A IS CONCERNED, THE ISSUE IS NOW DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE BOMBAY HIGH COURTS JUDGEME NT IN THE CASE OF GODREJ & BOYCE LIMITED VS. ACIT (328 ITR 81), HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE IN SUCH CIRCUMSTANCES AND THE DISALL OWANCE HAS TO BE WORKED OUT BY THE AO ON SOME REASONABLE BASIS. BEFORE US, A DECI SION DATED 3.12.2010 OF A CO- ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN C ASE FOR THE ASSESSMENT YEAR 2004-05 IS PLACED ON RECORD, WHEREIN ALSO, ON IDENT ICAL FACTS, THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO IN THE LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & B OYCE LTD (SUPRA). UNDER SUCH CIRCUMSTANCES, AND WITH THE CONSENT OF THE PARTIES, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISALLOWANCE AS PER THE AFORENOTED JUDGMENT, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARIN G I.E. ON 8 TH FEBRUARY, 2011. SD/- (D.MANMOHAN ) (VICE PRESIDENT) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 8 TH FEBRUARY, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),XVIII, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-3 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.2078/ MUM/2009 BARODA INDUSTRIES P.LTD 3