Positive Securities Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2557/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4178 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 25-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI RAMACHAN DRAN
• Assessee Lawyers: M P RASTAGI
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.2557 /DEL/2010 ASSESSMENT YEAR : 2007-08 M/S POSITIVE SECURITIES PVT. ACIT, LTD., 220-OKHLA INDL. AREA, CIRCLE-14 (1), NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AADCP AADCP AADCP AADCP- -- -6362 6362 6362 6362- -- -L LL L APPELLANT BY : SHRI M.P. RASTAGI, ADVOCATE. RESPONDENT BY : SHRI RAVI RAMA CHANDRAN, SR. DR. ORDER PER B.K. HALDAR, AM: THIS IS AN ASSESSEE'S APPEAL FILED AGAINST THE ORDER OF LD CIT(A)XVII, NEW DELHI DATED 8.3.2010 FOR ASSESSMENT YEAR 2007-08. T HE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. THE CIT(A) HAS ERRED ION CONFIRMING THE ACTION OF TH E LD ASSESSING OFFICER OF ALLOCATING AND DISALLOWING U/S 14A R EAD WITH RULE 8D THE 100% OF EXPENSES INCURRED IN A MECHANIC AL MANNER AND WITHOUT APPLICATION OF MIND. 2. THE ALLOCATION OF 100% EXPENSES TO EARNING JUST `.14.4 9 LAKHS OF DIVIDEND AND CONSEQUENTLY CONCLUDING THAT NIL NO EXPENSES HAVE BEEN INCURRED BY THE COMPANY FOR EARNING TAXAB LE INCOME OF `.429.78 LAKHS DOES NOT STAND TO REASON. PAGE 2 OF 4 ITA NO2557/DEL/10 3. THAT THE RULE 8D IS TO BE IGNORED AS ITS APPLICATION I S RESULTING IN ABSURDITY AND THUS UNWORKABLE. 4. THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE BASIC GRIEVANCE OF THE APPELLANT IS THAT APPLICATION OF RU LE 8D BY THE AUTHORITIES BELOW FOR DETERMINING THE DISALLOWANCE U/ S 14A OF THE ACT WAS NOT JUSTIFIED IN VIEW OF THE HON'BLE BOMBAY HIGH COURTS JUDGMENT IN THE CASE OF GODREJ & BOYCE MFG. COMPANY LTD. V. CIT, 328 ITR 81. LD DEPARTMENTAL REPRESENTATIVE HAS NOT BROUGH T TO OUR NOTICE CONTRARY VIEW IF ANY TAKEN BY THE JURISDICTIONAL HI GH COURT. IN VIEW OF THE ABOVE, WE HOLD THAT ASSESSMENT YEAR INVOLVED IN TH E PRESENT CASE BEING 2007-08, RULE 8D COULD NOT HAVE BEEN APPLIED FOR WORKING OUT THE DISALLOWANCE U/S 14A OF THE ACT. WE, THEREFORE, SE T ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE INVOLVED IN THE PRESENT CASE AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFI CER WITH THE DIRECTION THAT THE ISSUE BE DECIDED AFRESH KEEPING IN VIEW THE HON'BLE BOMBAY HIGH COURTS JUDGMENT IN THE CASE OF GODREJ & BOYCE MFG. COMPANY LTD. (SUPRA) AND AFTER GIVING THE ASSESSEE ADEQU ATE OPPORTUNITY OF BEING HEARD. 3. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 4. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 25 TH APRIL, 2011. SD/- SD/- (R.P. TOLANI) (B.K. HAL DAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 25.4.2011. HMS PAGE 3 OF 4 ITA NO2557/DEL/10 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 25/4/2011 DATE OF DICTATION 25/4/2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. DATE OF ORDER SENT TO THE CONCERNED BENCH PAGE 4 OF 4 ITA NO2557/DEL/10