NEELKANTH URBAN DEVELOPERS PVT LTD, MUMBAI V. I.T.O. WD 6(1)(4), MUMBAI

ITA 2323/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100525 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RANJANDR
• Assessee Lawyers: GYANESHWARY Y KATARAM
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.2323/MUM/2011 ASSESSMENT YEAR: 2007-08 M/S NEELKANTH URBAN DEVELOPERS PRIVATE LIMITED, FINE HOUSE, ANANDJI LANE, 5 TH FLOOR, M.G. ROAD, GHATKOPAR (E), MUMBAI-400077 / VS. THE INCOME TAX OFFICER, WARD-6(1)(4), AAYAKAR BHAVAN, MUMBAI-400020 ( !'# $ /ASSESSEE) ( % / REVENUE) P.A. NO. AAFCA8887K !'# $ / ASSESSEE BY SHRI GYANESHWARY Y.KATARAM % / REVENUE BY SHRI M. RANJAN-DR & !%' ( $ ) / DATE OF HEARING : 06/08/2015 ( $ ) / DATE OF ORDER: 25/08/2015 M/S NEELKANTH URVAN DEVELOPERS ITA NO.2323/MUM/2011 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 28/01/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, HOLDING THAT THE ASSESSEE COULD NOT ESTABLISH WHETH ER ANY BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE A ND FURTHER CONFIRMING THE DISALLOWANCE OF ADMINISTRATIVE AND O THER EXPENSES U/S 14A OF THE INCOME TAX ACT, 1961 (HEREI NAFTER THE ACT). 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, SHRI GYANESHWAR Y. KATARAM, ADVANCED HIS ARGUMENTS WHICH IS IDENTICAL TO THE GROUND RAISED. THE ONLY ISSUE RAISED BY THE ASSESSEE PERTAINS TO DISALLOWAN CE MADE U/S 14A OF THE ACT. ON THE OTHER HAND, THE LD. DR, SHRI M. RANJAN, DEFENDED THE CONCLUSION ARRIVED AT IN THE I MPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED LOSS OF RS.14,32,699 /- IN ITS RETURN ON 30 TH OCTOBER, 2007, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON THE CASE OF THE ASSESSE E WAS TAKEN FOR SCRUTINY UNDER CASS, THEREFORE, REQUISITE NOTIC E U/S 143(2) OF THE ACT WAS SERVED UPON THE ASSESSEE. D URING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO F URNISH THE WORKING OF AMOUNT WITH RESPECT TO PROVISION U/S 14A OF THE ACT READ WITH RULE 8D OF THE RULES. THE STAND O F THE M/S NEELKANTH URVAN DEVELOPERS ITA NO.2323/MUM/2011 3 ASSESSEE WAS THAT SINCE NO EXPENDITURE WAS INCURRED FOR EARNING EXEMPT INCOME, THEREFORE, SECTION 14A IS NO T APPLICABLE. THIS CLAIM OF THE ASSESSEE WAS NOT ACCE PTED BY THE LD. ASSESSING OFFICER ON THE PLEA THAT WITHOUT INCURRING ANY ADMINISTRATIVE EXPENSES/OTHER EXPENSES, IT IS N OT POSSIBLE TO EARN THE EXEMPT INCOME, THEREFORE, APPL YING THE DECISION IN THE CASE OF M/S DAGA CAPITAL MANAGEMENT PVT. LTD. (ITA NO.8057/MUM/2003) ORDER DATED 20/10/2008, HE MADE A DISALLOWANCE OF RS.30,31,503/- U/S 14A OF TH E ACT READ WITH RULE 8D. ON APPEAL, BEFORE THE LD. COMMIS SIONER OF INCOME TAX (APPEALS), THE ASSESSING OFFICER WAS DIR ECTED TO ADOPT A REASONABLE BASIS OF METHOD FOR MAKING THE DISALLOWANCE UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE BY FOLLOWING THE DECISION FROM HONBLE HIGH COURT I N GODREZ & BOYCE MANUFACTURING COMPANY LTD. VS DCIT. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING T O ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, BROADLY, WE FIND NO INFIRMITY IN THE DIRECTION CONTAINED IN THE IMPUGNED ORDER. HOWEVER, WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSES SEE AND AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD, TO THE ASSESSEE, DECIDE AFRESH, THE CASE IN TERMS OF THE D ECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN GOREZ & B OYCE MANUFACTURING COMPANY LTD. VS DCIT BY ADOPTING A REASONABLE APPROACH. THE ASSESSEE IS ALSO AT LIBER TY TO M/S NEELKANTH URVAN DEVELOPERS ITA NO.2323/MUM/2011 4 FURNISH EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM, THUS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/08/2015. SD/ - (R.C.SHARMA) S D/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & ' MUMBAI; *! DATED : 25/08/2015 F{X~{T? P.S/. !. . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. & 1$ ( +, ) / THE CIT, MUMBAI. 4. & 1$ / CIT(A)- , MUMBAI 5. 3%4 /$!' , +,) +' 5 , & ' / DR, ITAT, MUMBAI 6. 6 7' / GUARD FILE. / BY ORDER, 03,$ /$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI