A.C.I.T. CIRCLE 7(2), MUMBAI V. RUPEE FINANCE & MANAGEMENT PVT. LTD., MUMBAI

ITA 2260/MUM/2012

• Counselvise Citation: 226019914 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: RAJESH CHAMARIA
• Keywords: Revised return
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI . . , ! , ' # BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 2260 / / 2012 A.Y. 2007-08 ITA NO. : 2260/MUM/2012 (ASSESSMENT YEAR: 2007-08) ASSTT. COMMISSIONER OF INCOME TAX -7(2), ROOM NO. 624, M.K. ROAD, MUMBAI -400 020 VS M/S. RUPEE FINANCE AND MANAGEMENT P. LTD., CONTINENTAL BUILDING, 135, DR. A.B. ROAD, WORLI, MUMBAI -400 018 .: PAN: AABCR 9194 C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KISHAN VYAS RESPONDENT BY : SHRI RAJESH CHAMARIA ! /DATE OF HEARING : 31-07-2013 '# ! / DATE OF PRONOUNCEMENT : 07 -08-2013 ' O R D E R ! , : PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER O F CIT(A) 13, MUMBAI, DATED 16.12.2011, WHEREIN THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE U/S 14 R.W. RULE 8D(II) TO RS. 41,97,082/- INSTEAD OF RS. 1,70,56,648/- IGNORING T HE FACT THAT THE ASSESSEE ITSELF HAS SUO MOTTO DISALLOWED THE SUM OF RS. 1,65,69,978/- U/S 14A BY FILING A REVISED RETURN. M/S. RUPEE FINANCE AND MANAGEMENT P. LTD. ITA NO. 2260/MUM/2012 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE U/S 14 R.W. RULE 8D(II) TO RS. 41,97,082/- INSTEAD OF RS. 1,70,56,648/- IGNORING T HE FACT THAT THE ASSESSEE WAS NOT IN A POSITION TO PROVE THE NEXUS B ETWEEN THE INVESTMENTS AND THE SOURCE THEREOF. 2. THE SOLITARY ISSUE IS WITH REGARD TO RESTRICTION OF DISA LLOWANCE U/S 14A READ WITH RULE 8D. 3. IN THE ASSESSMENT, THE AO DISALLOWED RS. 1,70,56,648/- U/S 14A READ WITH RULE 8D. BEFORE THE CIT(A), THE ASSESSEE PLE ADED THAT RS. 1,65,69,978/- WAS WRONGLY PLACED IN THE REVISED RETUR N AND OTHER GROUNDS. 4. THE CIT(A), THEREFORE, TAKING INTO ACCOUNT DETAILED SUBM ISSION, RESTRICTED THE DISALLOWANCE TO RS. 41,97,082/- (RS. 40,33,289 + RS. 1,63,793). 5. AGAINST THIS, THE DEPARTMENT IS IN APPEAL. 6. BEFORE US, THE DR PLEADED AND PLACED RELIANCE ON THE O RDER OF THE AO WHERE, ON THE OTHER HAND, THE AR PLEADED THAT S INCE THE ISSUE PERTAINS TO PRE AMENDMENT PERIOD, AS HELD BY THE HONBL E BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD., THE ISSUE BE RESTORED TO THE AO. 7. WE HAVE HEARD THE ARGUMENTS AND WE ARE IN AGREEME NT WITH THE SUBMISSION OF THE AR THAT THE ISSUE BE RESTORED TO THE FILE OF THE AO FOR RECONSIDERATION AND RECOMPUTATION ON REASONABLE BASIS, AS THE RULE WOULD NOT BE APPLICABLE. 8. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIR ECT THE AO TO RECOMPUTE THE DISALLOWANCE DE NOVO , ON A REASONABLE BASIS, AFTER AFFORDING ADEQUATE AND REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. WE HOLD ACCORDINGLY. M/S. RUPEE FINANCE AND MANAGEMENT P. LTD. ITA NO. 2260/MUM/2012 3 10. THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2013. SD/- SD/- ( . . ) ( ! ) (R.S. SYAL) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 07/08/2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) ' '( ( ) - 13 MUMBAI / THE CIT (A)-13, MUMBAI. 4) ' '( 7, MUMBAI / THE CIT7, MUMBAI, 5) *+, - , ' ! - , ./ / THE D.R. D BENCH, MUMBAI. 6) , 0 COPY TO GUARD FILE. '12 / BY ORDER / / TRUE COPY / / [ 3 / 4 5 ' ! - , ./ DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *784 . . * CHAVAN, SR. PS