DCIT, New Delhi V. M/s Mansrover Investments Ltd., New Delhi

ITA 211/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58955 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS RENU JAUHRI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.211/DEL/2011 ASSESSMENT YEAR : 2007-08 DCIT, ROOM NO.413, CR BUILDING, CIRCLE 6 (1), NEW DELHI. VS. M/S MANSROVER INVESTMENTS LTD., 86, SHAKTI APARTMENTS, SFS, ASHOK VIHAR, PHASE-III, DELHI 110 052. PAN : AAACM0211C (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MRS. RENU JAUHRI, CIT, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT. IT IS DIR ECTED AGAINST THE ORDER DATED 22 ND SEPTEMBER, 2010 PASSED BY THE CIT(A) FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS U NDER:- 1. THE ORDER OF LEARNED CIT (APPEALS) IS ERRONEOUS & CONTRARY TO FACTS & LAW. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN RESTRICTING THE ADDITI ON MADE U/S 14A TO RS.10,36,770/- AS AGAINST RS.2,80,79,144/- MAD E BY THE A.O. 2.1 THE LD. CIT (A) IGNORED THE FACT THAT THE DISALLOWAN CE HAS BEEN CORRECTLY MADE BY THE ASSESSING OFFICER U/S 14A OF THE ACT AS PER THE PROVISIONS OF THE RULE 8D OF THE IT RULES. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AM END ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF HEARI NG. ITA NO.211/DEL/2011 2 2. THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE. HOWEV ER, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. EARLIER ALSO NOTIC ES WERE SENT AND THE ASSESSEE DID NOT REPRESENT. THEREFORE, WE PROCE EDED TO DECIDE THE PRESENT APPEAL EX PARTE QUA THE ASSESSEE. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ,THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED EXEMPTED INCOME IN THE SHAPE OF DIVIDEND OF ` 5,69,64,130/- AND REFERRING T O SECTION 14A AND RULE 8D,HE CALCULATED THE DISALLOWANCE U/S 14A AT A SU M OF ` 2,80,79,144/-. LEARNED CIT (A) HAS HELD THAT RULE 8D WAS NOT APPLICABLE. CONSIDERING THE DIRECT EXPENSES (DEMAT EXP ENSES), INTEREST EXPENSES AND ADMINISTRATIVE EXPENSES, LEARNED CI T (A) NOTED THAT THE ASSESSEE ITSELF HAD DISALLOWED INTEREST OF ` 79, 97,865/- AND ALSO TAKING INTO ACCOUNT OTHER FACTORS, HE HAS UPHELD THE DISALLOWANCE ONLY TO THE EXTENT OF ` 10,36,771/- EXCLUDING THE I NTEREST DISALLOWED BY THE ASSESSEE OF ` 79,97,865/-. THE DEPARTMENT IS AGGRIE VED WITH THE DELETION AND, HENCE, HAS FILED THE AFOREMENTIONED AP PEAL. 4. THE LEARNED DR SUBMITTED THAT THOUGH RULE 8D IS NO T APPLICABLE FOR THE YEAR UNDER CONSIDERATION, BUT, THE DISALLOWAN CE HAS TO BE MADE IN ACCORDANCE WITH THE DECISION OF HONBLE DELHI HIG H COURT IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT (2011) 203 TAXMAN 3 64 (DELHI). SHE SUBMITTED THAT THE SAID DECISION WAS NOT AVAILABLE WHEN LEARNED CIT (A) HAS DECIDED THE ISSUE, THEREFORE, IT WILL BE J UST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR RE- ADJUDICATION OF THE ISSUE OF DISALLOWANCE U/S 14A. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE L EARNED AR AND WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS THE ORDER PASSED BY THE CIT (A). THE ASSESSING OFFICER HAS AP PLIED RULE 8D AND LEARNED CIT (A) HAS SIMPLY REFERRED TO THE DIRECT EXPENSES AND ITA NO.211/DEL/2011 3 OTHER EXPENSES AND HAS ESTIMATED THE DISALLOWANCE. AS TH E MATTER NOW IS COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE MAXOPP INVESTMENT LTD. VS. CIT (SUPRA), WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE REGARDING DISALLOWANCE U/S 14A IN ACCORDANCE WITH THE AFOREMENTIONED DECISION IN THE CASE OF MAXOP P INVESTMENT LTD. (SUPRA). NEEDLESS TO MENTION THAT THE ASSESSING OFFI CER WILL GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE D IRECT ACCORDINGLY. 6. IN THE RESULT, FOR STATISTICAL PURPOSES THE APPEAL FI LED BY THE REVENUE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.20 12. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 23.03.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES