ALLANA COLD STORAGE P.LTD, MUMBAI V. AST CIT RG 1(1), MUMBAI

ITA 2366/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8026 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 24-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , HON'BLE ACCOUNTANT MEMBER ITA.NO.2366 & 2367 /MUM/2015 (A.Y S . 2011 - 12 & 2010 - 11 ) ALLAN A COLD STORAGE PRIVATE LIMITED, ALLANA HOUSE, 4, J.A. ALLANA MARG, COLABA, MUMBAI 400 001 PAN NO: AAACA 5972 E V . ADDL. COMMISSIONER OF INCOME TAX RANGE 1(1), INCOME TAX OFFICE, 5 TH FLOOR, ROOM NO. 538, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI APURVA SHAH REVENUE BY : SHRI PURUSHOTTAM KUMAR DATE OF HEARING : 12 .12 .2017 DATE OF PRONOUNCEMENT : 20 .12 .2017 O R D E R PER C. N. PRASAD (JM) 1. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS OF T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, MUMBAI DATED 29.01.2015 FOR THE ASSESSMENT YEARS 2011 - 12 AND 2010 - 11 RESPECTIVELY. THE ONLY GRIEVANCE IN BOTH THESE APPEALS IS IN RESPECT OF CONFIRMING THE DISALLOWANCE U/S. 14A R.W. RULE 8D(2)(III). 2 ITA.NO.2366 & 2367 /MUM/2015 (A.Y.2011 - 12) ALLANA COLD STORAGE PRIVATE LIMITED 2. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN COM PUTING THE DISALLOWANCE UNDER RULE 8D(2)(III) ONLY THOSE INVESTMENTS WHICH YIELDED DIVIDEND INCOME SHOULD BE CONSIDERED AND N OT ALL THE INVESTMENTS AND THIS CONTENTION IS ALSO SUPPORTED BY THE DECISION OF THE DELHI SPECIAL BENCH OF ITAT IN THE CASE OF A ACIT V. VIREET INVESTMENTS PRIVATE LIMITED [165 ITD 27 ]. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THOUGH OTHER CONTENTIONS AND PROPOSITIONS WERE CANVAS S ED BY THE ASSESSEE IF THIS IS ACCEPTED THE OTHER CONTENTIONS MAY NOT BE RELEVANT. 3. LD.DR STRONGLY SUPPORTED THE ORDER S OF T HE LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW AND THE DECISION OF THE DELHI SPECIAL BENCH IN THE CASE OF ACIT V. VIRE ET INVE STMENTS PRIVATE LIMITED (SUPRA). WE OBSERVE THAT THE SPECIAL BENCH OF THE DELHI TRIBUNAL HELD THAT ONLY THOSE INVESTMENTS ARE TO BE CONSIDERED FOR COMPUTING AVERAGE VALUE OF INVESTMENTS WHICH YIELDED EXEMPT INCOME DURING THE YEAR. THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE UNDER RULE 8D(2)(III) BY CONSIDERIN G ONLY THOSE INVESTMENTS WHICH YIELDED EX EMPT INCOME DURING THE YEAR AND RECOMPUTE THE INCOME ACCORDINGLY . NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE WE FOLLOWED 3 ITA.NO.2366 & 2367 /MUM/2015 (A.Y.2011 - 12) ALLANA COLD STORAGE PRIVATE LIMITED THE ORDER OF THE SPECIAL BENCH TRIBUNAL AND HELD THAT THE ONLY T HE INVESTMENTS YIELDING DIVIDEND INCOME SHOULD BE CONSIDERED FOR DISALLOWANCE UNDER RULE 8D(2)(III) THE OTHER CONTENTIONS RAISED BY THE ASSESSEE NEED NOT GONE INTO AS THEY ARE NOT RELEVANT AS SUBMITTED BY LD .A.R. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 20 TH DECEMBER , 2017 . SD/ - SD/ - ( RAMIT KOCHAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20 / 12 / 2017 GIRIDHAR , SPS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM