DCIT - 8(2), MUMBAI V. M/s. HINDUSTAN DORR OLIVER LTD., MUMBAI

ITA 2109/MUM/2007

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5777 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 24-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 13-03-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAN BAHADUR
• Assessee Lawyers: J D MISTRY

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J B ENCH, MUMBAI . . , , !'#$ , % & BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLAI YA, AM ./ I.T.A. NO.2109/MUM/2007 ( ' ' ' ' / ASSESSMENT YEAR :2003-04 THE DCIT, 8(2), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. HINDUSTAN DORR OLIVER LTD., DORR OLIVER HOUSE, CHAKALA, ANDHERI (E), MUMBAI-400 099 ( % ./ ) ./ PAN/GIR NO. : AAACH 0964D ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / APPELLANT BY: SHRI RAJAN BAHADUR +,(* . - / RESPONDENT BY: SHRI J.D. MISTRY . /0% / DATE OF HEARING : 16.01.2014 12' . /0% / DATE OF PRONOUNCEMENT : 16.01.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-VIII, MUMBAI DT.08.12.2006 PERTAINING TO A.Y . 2003-04. 2. THE REVENUE HAS RAISED TWO SUBSTANTIVE GROUNDS O F APPEAL. GROUND NO. 1 RELATES TO THE GRIEVANCE THAT THE LD. CIT(A) ERRED IN HOLDING THAT SECTION 115-O(5) IS NOT APPLICABLE IN ASSESSEES CASE FOR A.Y. 2003-04 THEREBY DIRECTING THE AO TO ALLOW DEDU CTION CLAIMED U/S. 80-M OF THE ACT. ITA NO. 2109/M/07 2 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLA IMED DEDUCTION U/S. 80- M ON ACCOUNT OF DIVIDEND RECEIVED FROM M/S. SKOL BR EWERIES LTD. AMOUNTING TO RS. 18,37,126/- ON THE GROUND THAT THE ASSESSEE HAD IN TURN DECLARED DIVIDEND AMOUNTING TO RS. 50,77,000/-. TH E DIVIDEND WAS PAID DURING THE FINANCIAL YEAR 2003-04 AND WAS SUBJECT T O CORPORATE DIVIDEND TAX U/S. 115-O OF THE I.T. ACT. THE AO WAS OF THE FIRM BELIEF THAT ONCE THE PROVISIO0NS OF SEC. 115-O(5) IS APPLIED, THE AS SESSEE BECOMES INELIGIBLE FOR ANY DEDUCTION U/S. 80-M OF THE ACT A ND ACCORDINGLY DISALLOWED THE SUM OF RS. 18,37,126/-. 4. THE ASSESSEE STRONGLY AGITATED THIS MATTER BEFOR E THE LD. CIT(A). THE LD. CIT(A) HAS CONSIDERED THIS GRIEVANCE VIDE G ROUND NO. 2 OF APPEAL BEFORE HIM AND AFTER CONSIDERING THE FACTS A ND THE SUBMISSIONS AND THE LEGAL DECISIONS, THE LD. CIT(A) FINALLY CONCLUD ED THAT SEC. 115-O(5) IS NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CO NSIDERATION AND DIRECTED THE AO TO ALLOW DEDUCTION AS CLAIMED U/S. 80-M OF THE ACT. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS SUE HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AGROVET LTD. VS DCIT 32 3 ITR 97. THE LD. COUNSEL FOR THE ASSESSEE FURTHER RELIED UPON THE DE CISION OF THE TRIBUNAL IN THE CASE OF CASTLE INVESTMENT & INDUSTRIES PVT. LTD. IN ITA NO.1713/M/06 FOR A.Y. 2003-04. THE LD. COUNSEL FUR THER RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF SILVAS SA INDUSTRIES PVT. LTD. IN ITA NO. 162/M/02 AND ALSO IN THE CASE OF KALKABOD B YRAMJEE & SONS AGENCY PVT. LTD. IN ITA NO. 4102/M/01. ITA NO. 2109/M/07 3 6. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCE DED THIS ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DECISIONS RELIED UPON BY THE ASSESSEE. WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL. RESPECTFULLY FOLLO WING THE DECISIONS MENTIONED HEREINABOVE, FINDINGS OF THE LD. CIT(A) A RE CONFIRMED. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 8. WITH GROUND NO. 2, THE REVENUE ALLEGES THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW DEDUCTION OF RS. 72,21,393/- BEING PROVISION FOR WARRANTY AND FILED SERVICES DISALLOWE D IN EARLIER YEARS AND WRITTEN BACK IN THE YEAR UNDER CONSIDERATION IN VIE W OF THE FACT THAT THE DISALLOWANCE IN EARLIER YEAR HAD BEEN CONFIRMED BY THE LD. CIT(A). 9. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENT ION TO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 200 3-04 IN ITA NO. 1667/M/07 AND POINTED OUT THAT A SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL. 10. THE LD. DR SUBMITTED THAT THE ISSUE MAY BE REST ORED BACK TO THE FILES OF THE AO FOR VERIFICATION OF THE CLAIM OF TH E ASSESSEE. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CA REFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE ORDER O F THE TRIBUNAL. WE FIND THAT THE TRIBUNAL IN A.Y. 2003-04 IN ITA NO. 1667/M /07 AT PARA-6 HAS REMITTED THE MATTER BACK TO THE FILES OF THE AO WIT H A DIRECTION TO DECIDE THE ISSUE BY FOLLOWING THE DIRECTIONS GIVEN BY THE TRIBUNAL FOR A.Y. 2000-01 AND 2002-03. FACTS AND ISSUES BEING IDENTI CAL, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL (SUPRA), WE REMIT THE MATTER BACK ITA NO. 2109/M/07 4 TO THE FILES OF THE AO WITH SIMILAR DIRECTION AS GI VEN BY THE TRIBUNAL IN EARLIER ASSESSMENT YEARS. GROUND NO. 2 IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED IN PART FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 16/01/2014 . 3 . 2' % 4 56 16/01/2014 2 . 7 SD/- SD/- (I.P. BANSAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 5 DATED 16/01/2014 . . ./ RJ , SR. PS 3 3 3 3 . .. . +/! +/! +/! +/! 8!'/ 8!'/ 8!'/ 8!'/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. !:7 +/ , , / DR, ITAT, MUMBAI 6. 7; < / GUARD FILE. 3 3 3 3 / BY ORDER, ,!/ +/ //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI