RAMESH C SHAH HUF, MUMBAI V. ITO WD 19(2)(2), MUMBAI

ITA 2280/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3001 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Court: TRIBUNAL
• Department Lawyers: AJAY
• Assessee Lawyers: DHIRAJ H MEHTA
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.2280/M/2015 (ASSESSMENT YEAR: 2010 - 2011 ) RAMESH C. SHAH, HUF, 1/2/3 C WING, LANCELOT, NEXT TO DATTANI NAGAR, S.V. ROAD, BORIVALI WEST, MUMBAI - 92. / VS. ITO, WARD 19(2)(2), PIRAMAL CHAMBERS, MUMBAI. ./ PAN : AAFHR9861M ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DHIRAJ H MEHTA / RESPONDENT BY : SHRI AJAY, DR / DATE OF HEARING : 29.06.2016 / DATE OF PRONOUNCEMENT : 29.06.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 19.3.2015. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE DISALLOWABILITY OF AMOUNT OF RS. 3,45,207/ - U/S 14A OF THE ACT. THIS IS THE CASE OF HUF AND EARNED EXEMPT INCOME OF RS. 4,76,596/ - AND CLAIMED NO EXPENDIT URE IN THE P & L ACCOUNT. IN THE ASSESSMENT, AO NOTICED THE CLAIM OF EXEMPT INCOME AND NO DISALLOWANCE WAS MADE U/S 14A OF THE ACT AND PROCEEDED TO INVOKE THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF IT RULES, 1962. IN THIS REGARD, ASSESSEE SUBMITT ED THAT NO SUCH DISALLOWANCES ARE WARRANTED SINCE THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE ON THIS ACCOUNT AND THE EXPENDITURE INCURRED BY EARNING OF SUCH EXEMPT INCOME WAS CLAIMED IN RESPECT OF THE CAPITAL GAINS ACCOUNTS AND THE COPARCENERS OF THE HUF . IN THE ASSESSMENT, WITHOUT ADDRESSING TO THE OBJECTION OF THE ASSESSEE IN THIS REGARD, AO DISALLOWED THE ABOVE SUM. ON APPEAL, CIT (A) CONFIRMED THE SAME. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2 3. BEFORE ME, LD COUNSEL FOR THE ASSESSEE SU BMITTED THAT SINCE NO EXPENDITURE IS CLAIMED IN THE P & L ACCOUNT, THE DISALLOWANCE IS NOT LEGALLY SUSTAINABLE IN VIEW OF VARIOUS JUDGMENTS ON THE SUBJECT. 4. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. AFTER HEARING BOTH THE PARTIES AND AS PER THE REQUEST OF THE ASSESSEE, I AM OF THE OPINION THAT THE FACT OF SUCH CLAIM OF EXPENDITURE IN THE P & L ACCOUNT RELATABLE TO THE EXEMPT INCOME OF THE ASSESSEE ARE NOT ON RECORD. THEREFORE, FOR THE LIMITED PURPOSE OF EXAMINATION ON THE ISSUE, I REMAND THIS ISSUE TO THE FILE OF THE AO, WHO SHALL EXAMINE AND DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE BINDING DECISIONS ON THE SUBJECT. IF HE COMES TO THE CONCLUSION THAT NO EXPENSES ARE CLAIMED BY THE ASSESSEE IN THE P & L ACCOUNT, THERE IS NO NEED FOR INVOKING THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF THE ACT. AO IS DIRECTED TO APPLY THE CORRECT LEGAL POSITION AND DECIDE THE ISSUE AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I ORDER ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OF JUNE, 2016. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 29 .6.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 3 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ ASSTT. REGISTRAR) , / ITAT, MUMBAI