Appeal details
Counselvise Citation
22919914 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-08-2013
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
D
Next Hearing Date
29-04-2013
Assessment Year
2007-2008
Appeal Filed On
10-01-2012
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL D DD D BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKAR RAO D. KARUNAKAR RAO D. KARUNAKAR RAO D. KARUNAKAR RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO. 229/MUM/2012 229/MUM/2012 229/MUM/2012 229/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2007-08) ACIT 12(1), ROOM NO. 117, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. MARG MUMBAI-400020 % % % % / VS. M/S D. S. PURBHOODAS & CO. 1103, STOCK EXCHANGE TOWER, DALAL STREET, FORT, MUMBAI-400001 #' ! ./ ( ./ PAN/GIR NO. : AAAFD2711K ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') , , , , / APPELLANT BY : SHRI SHEKHAR L. GAJBHIYE *+') *+') *+') *+') - -- - , , , , /RESPONDENT BY : SHRI MADHUR AGARWAL % % % % - -- - .! .! .! .! / DATE OF HEARING : 8 TH AUGUST 2013 /0& /0& /0& /0& - -- -.! .! .! .! /DATE OF PRONOUNCEMENT: 14 TH AUGUST 2013 ' 1 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 21.10.2011 OF COMMISSIONER OF INCOME TAX(APPEALS) F OR THE ASSESSMENT YEAR 2007-08. 2. THE ONLY GROUND RAISED BY THE REVENUE IS AS UNDE R: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING AN AMOUNT OF ` 18,50,276/- BY RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ &BOYCE LTD. WHICH IS STILL PENDING BEFORE THE HONBLE SUPREME COURT. ITA NO.229/M/2012 D.S PRABHUDAS & CO. 2 3. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE EARNED DI VIDEND ON MUTUAL FUNDS AS WELL AS LONG TERM CAPITAL GAIN WHICH ARE E XEMPT U/S 10 OF THE INCOME TAX ACT. THE AO HAS DISALLOWED ADMINISTRATIV E AND MANAGERIAL EXPENSES OF ` 18,50,276/- U/S 14A BY APPLYING RULE 8D. ON APPEAL, THE CIT(A) HAS HELD THAT RULE 8D IS NOT APPLICABLE IN T HE YEAR UNDER CONSIDERATION IN VIEW OF THE DECISION OF HONBLE JU RISDICTION HIGH COURT IN CASE OF GODREJ BOYCE MFG. CO. LTD. VS DCIT 328 ITR 81. ACCORDINGLY, THE CIT(A) HAS RESTRICTED THE DISALLOWANCE OF ` 5,00,00 0/- U/S 14A ON ACCOUNT OF ADMINISTRATIVE AND MANAGERIAL EXPENSES. THE LD. AR OF THE ASSESSEE HAS INVITED OUR ATTENTION TO THE VARIOUS DECISIONS OF THIS TRIBUNAL WHERE IT HAS BEEN HELD THAT THE DISALLOWANCE U/S 14A ON ACCO UNT OF ADMINISTRATIVE AND MANAGERIAL EXPENSES CAN BE MADE AT 2% OF THE TO TAL EXEMPT INCOME. HE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL DA TED 10.10.2012 IN CASE OF ACIT VS CREDIT LYONNAIS IN ITA NO. 5318/M/2001. AT THE OUTSET WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DEC IDED BY THIS TRIBUNAL IN CASE OF ACIT VS M/S CREDIT LYONNAIS (SUPRA) IN PARA 17 AS UNDER: 17. AS REGARDS THE OTHER ADMINISTRATIVE AND MANAG EMENT EXPENSES ARE CONCERNED, WE FIND THAT THE TRIBUNAL I N THE CASE OF JCIT VS AMERICAN EXPRESS BANK LIMIKTED IN ITA NO. 5904/MUM/2005 VIDE ITS ORDER DATED 8 TH AUGUST 2012 HAS HELD THAT DISALLOWANCE U/S 14A IS CALLED FOR IN RESPECT OF INCOME WHICH IS EXEMPT U/S 10(33) AND ALSO U/S 10(15)(IV)(H). IN SOFAR AS THE AMOUNT OF DISALLOWANCE TOWARDS ADMINISTRATIVE AND M ANAGEMENT EXPENSES IN RELATION TO EXEMPT DIVIDEND AND INTERES T INCOME IS CONCERNED, WE FIND THAT THE TRIBUNAL IN DDIT (IT) V S STATE BANK OF MAURITIUS LIMITED IN ITA NO. 2456/MUM/2006 & ORS. V IDE ITS ORDER DATED 3 RD OCTOBER 2012 HAS UPHELD THE SUSTENANCE OF DISALLOWANCE ON ACCOUNT OF ADMINISTRATIVE AND MANAG EMENT EXPENSES IN RELATION TO EXEMPT INCOME AT 2% OF SUCH EXEMPT INCOME. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO SUSTAIN ITA NO.229/M/2012 D.S PRABHUDAS & CO. 3 DISALLOWANCE AT 2% OF TOTAL EXEMPT INCOME U/S 10(33 ) AND ALSO U/S 10(15). 4. AS IT IS CLEAR FROM THE ORDER OF THIS TRIBUNAL ( SUPRA) THAT A SIMILAR VIEW HAS BEEN TAKEN BY THIS TRIBUNAL IN NUMBER OF C ASES AS REFERRED ABOVE. ACCORDINGLY BY FOLLOWING THE EARLIER ORDERS OF THIS TRIBUNAL WE DIRECT THE AO TO SUSTAIN THE DISALLOWANCE ON ACCOUN T OF ADMINISTRATIVE AND MANAGEMENT EXPENSES AT 2% OF THE TOTAL EXEMPT INCOM E. THE ORDER OF THE CIT(A) QUA THIS ISSUE IS MODIFIED TO THAT EXTEN T. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF AUGUST 2013 ' 1 - /0& ! 2 3'%4 14 TH 5#. 0 - 5 SD/- SD/- ( . ) ! '# (D. KARUNAKAR RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 14 TH AUGUST 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI
