RAJAN L. KEWALRAMANI, MUMBAI V. ITO WD 1(2)(4), MUMBAI

ITA 2252/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4078 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-07-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: MATHURIA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI .. , ! ' # , $ ', % BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.2252/MUM/2012 : ASST.YEAR 2002-2003 SHRI RAJAN L.KEWALRAMANI C/O.POHOOMAL KEWALRAM SONS EXPORTS PRIVATE LIMITED, 35 COURT CHAMBERS, NEW MARINE LINES MUMBAI 400 020. PAN :AABPK8022F. THE INCOME TAX OFFICER WARD 1(2)(4) MUMBAI. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI M.S.MATHURIA *+&' , - , - , - , - / RESPONDENT BY : SHRI KISHAN VYAS ) , .! / / / / DATE OF HEARING : 30.07.2013 /01 , .! / DATE OF PRONOUNCEMENT : 31.07.2013 ' 2 ' 2 ' 2 ' 2 / / / / 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 30.11.2011 IN RELATION TO THE ASSESSMENT YEAR 2002-2003. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS AGAINST THE SUSTENANCE OF ADDITION U/S 14A OF THE ACT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE RECEIVED CERTAIN EXEMPT INCOME. N O DISALLOWANCE WAS OFFERED U/S 14A. THE ASSESSING OFFICER MADE ADD ITION OF ITA NO.2252/MUM/2012. SHRI RAJAN L.KEWALRAMANI. 2 ` 2,62,417 TOWARDS INTEREST EXPENDITURE RELATABLE TO THE INVESTMENTS MADE IN SECURITIES GIVING EXEMPT INCOME. THE LEARNE D CIT(A) UPHELD THE ADDITION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSMENT YEA R INVOLVED BEFORE US IS 2002-2003. THE HONBLE JURISDICTIONAL HIGH CO URT IN THE CASE OF GODREJ & BOYCE LTD. MFG. CO. V. DCIT [(2010) 328 IT R 81 (BOM)] HAS HELD THAT THE PROVISIONS OF RULE 8D CANNOT BE A PPLIED TO ANY ASSESSMENT YEAR PRIOR TO 2008-2009 AND IN SUCH EARL IER YEARS THE DISALLOWANCE IS TO BE MADE ON SOME REASONABLE BASIS . THE LD. AR CONTENDED THAT THE AUTHORITIES FAILED TO TAKE NOTE OF THE FACT THAT THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE WER E MORE THAN THE INVESTMENTS MADE IN SECURITIES EARNING EXEMPT INCOM E. WE FIND THAT THIS ARGUMENT HAS NOT BEEN ADDRESSED BY THE AUTHORI TIES. IT IS BUT NATURAL THAT IF THE ASSESSEE HAS INTEREST FREE FUND S AVAILABLE WITH IT AND THE INVESTMENT IS MADE OUT OF SUCH FUNDS THEN NO DI SALLOWANCE ON ACCOUNT OF INTEREST CAN BE MADE U/S 14A. WE, THEREF ORE, SET ASIDE THE VIEW TAKEN BY THE LEARNED CIT(A) IN THIS REGARD AND SEND THE MATTER BACK TO THE FILE OF THE AO FOR WORKING OUT THE DISA LLOWANCE, IF ANY, AFTER DISPOSING OF THE ASSESSEES CONTENTION IN THI S REGARD. 4. 3 .4 $) 3. , 5 6, 78 9 : . ; , <. => IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ITA NO.2252/MUM/2012. SHRI RAJAN L.KEWALRAMANI. 3 ORDER PRONOUNCED ON THIS 31 ST DAY OF JULY, 2013. ' 2 , /01 ?')4 0 , @ SD/- SD/- (VIVEK VARMA) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; ?') DATED : 31 ST JULY, 2013. DEVDAS* ' 2 , *$.:# A #1. ' 2 , *$.:# A #1. ' 2 , *$.:# A #1. ' 2 , *$.:# A #1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. B () / THE CIT, THANE. 4. B / CIT(A) 2, MUMBAI. 5. #E@ *$.$) , , / DR, ITAT, MUMBAI 6. @ F / GUARD FILE. ' 2) ' 2) ' 2) ' 2) / BY ORDER, +#. *$. //TRUE COPY// 7 7 7 7/ // /= < = < = < = < ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI