M/S GALIAKOTWALA ENGINEERING COMPANY PVT. LTD., Mumbai V. ACIT CIRCLE-3(1)(2), Mumbai

ITA 2632/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4465 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 26-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI BEFORE SHRI MAHAVIR SINGH , VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 2632/MUM/2019 : A.Y : 2013 - 14 M/S. GALIAKOTWALA ENGINEERING COMPANY PVT. LTD., 66, MAKER CHAMBER - III, JAMNALAL BAJAJ MARG, NARIMAN POINT, MUMBAI 400 021 . PAN : AAACG5701D (APPELLANT) VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1)(2), MUMBAI. (RESPONDENT) A PPELLANT BY : NONE RE SPONDENT BY : SHRI T.S. KHALSA DATE OF HEARING : 01/02/2021 DATE OF PRONOUNCEMENT : 01/02/2021 O R D E R PER MAHAVIR SINGH , VP : THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A) - 9, MUMBAI IN A PPEAL NO. CIT(A) - 9/CIR.3/TR.126/2016 - 17 DATED 20.03.2019. THE ASSESSMENT WAS FRAMED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1)(2), MUMBAI UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2013 - 14 VIDE ORDER DATED 29.02.2016. 2. BRIEF FACTS ARE THAT THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSESSEE HAS INVESTED IN EQUITY SHARES AND MUTUAL FUNDS A SUM OF RS.2,07,99,352/ - AND EARNED EXEMPT INCOME OF RS.6,18,304/ - . 2 ITA NO. 2632/MUM/2019 M/S. GALIAKOTWALA ENGINEERING CO. PVT. LTD. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE BY INVOKING PROVIS IONS OF SECTION 14A OF THE ACT R.W.R 8D OF THE INCOME TAX RULES. HE COMPUTED THE DISALLOWANCE UNDER RULE 8D(2)(II) AND 8D(2)(III) OF THE INCOME TAX RULES (HEREINAFTER REFERRED TO AS THE RULES) TOTALLING TO RS.3,02,169/ - . AGGRIEVED, ASSESSEE PREFERRED A PPEAL BEFORE THE CIT(A), WHO RESTRICTED THE DISALLOWANCE UNDER RULE 8D(2)(III) OF THE RULES AT RS.1,11,002/ - . AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF T HE CASE. AT THE OUTSET, IT IS NOTED FROM THE ASSESSMENT ORDER AS WELL AS ORDER OF CIT(A) THAT THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER QUA THE CLAIM OF ASSESSEE THAT THERE IS NO EXPENDITURE INCURRED ON ACCOUNT OF EARNING OF EXEMPT INCOME . EVEN THE ASSESSING OFFICER HAS NOT GONE THROUGH THE ACCOUNTS OF THE ASSESSEE AND COULD NOT POINT OUT WHICH EXPENSES ARE RELATABLE TO EXEMPT INCOME. HENCE, HE HAS NOT RECORDED ANY SATISFACTION BEFORE REJECTING THE ACCOUNTS OF THE ASSESSEE. WE ARE OF TH E VIEW THAT RECORDING OF SATISFACTION IS A PRIMARY CONDITION FOR INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT R .W.R 8D OF THE RULES. HENCE, WE DELETE THE DISALLOWANCE CONFIRMED BY CIT(A) AMOUNTING TO RS.1,11,002/ - . 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST FEBRUARY, 2021. SD/ - SD/ - (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER ( MAHAVIR SINGH ) VICE PRESIDENT MUMBAI, DATE : 1 S T FEBRUARY, 20 21 *SSL* 3 ITA NO. 2632/MUM/2019 M/S. GALIAKOTWALA ENGINEERING CO. PVT. LTD. COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, G BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI