ABBOTT HEALTHCARE P.LTD, MUMBAI V. ADDL CIT RG 2(1), MUMBAI

ITA 267/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71329 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 11-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS JOTHILAKSHMI NAYAK
• Keywords: Earning of tax free income; Revised return
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI .. , , BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO.267/MUM/2011 ( / ASSESSMENT YEAR: 2006-07) ABBOTT HEALTHCARE PRIVATE LIMITED UNIT 4, CORPORATE PARK, SION TROMBAY ROAD, CHEMBUR, MUMBAI-400 071 / VS. ADDL. CIT-RANGE 2(1), AAYAKAR BHAVAN, M. K. MARG, MUMBAI-400 020 ./ ./PAN/GIR NO. AAACK 3935 D ( /APPELLANT ) : ( !' / RESPONDENT ) # / APPELLANT BY : SHRI NIRAJ SETH !' $ # / RESPONDENT BY : MRS. JOTHILAKSHMI NAYAK % &'( $ )* / DATE OF HEARING : 29.08.2013 +,- $ )* / DATE OF PRONOUNCEMENT : 25.09.2013 . / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-4, MUMBAI (CIT(A) FOR SHO RT) DATED 25.11.2010, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2006-07 VIDE ORDER DATED 27.11.2009. 2 ITA NO. 267/MUM/2011 (A.Y. 2006-07) ABBOTT HEALTHCARE PRIVATE LIMITED VS. ADDL. CIT 2. THE APPEAL RAISES TWO GROUNDS. VIDE ITS FIRST GR OUND, THE ASSESSEE DISPUTES THE DISALLOWANCE U/S.14A OF THE ACT, DETERMINED AT RS.9 ,25,702/- BY THE REVENUE, AS AGAINST THAT MADE BY IT SUO MOTU IN THE SUM OF RS.2,51,024/-. THE ASSESSMENT YEAR U NDER REFERENCE IS 2006-07, SO THAT RULE 8D IS NOT MANDAT ORY IN ITS APPLICATION, AS CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F GODREJ & BOYCE MANUFACTURING COMPANY LTD. VS. DCIT [2010] 328 ITR 81 (BOM), WHILE THE AMOUNT ADDITION ALLY DISALLOWED IS ONLY ATTRIBUTABLE TO THE APPLICATION OF RULE 8D2(II) AND 8D2(III). THE TRIBUNAL ON AN EARLIER OCCASION IN THE ASSESSEES C ASE, I.E., FOR A.Y. 2005-06, UNDER LIKE CIRCUMSTANCES, REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) (IN ITA NO.6974/MUM/2010 DATED 17.04.2012/COPY ON RECOR D). THE REVENUE, ON THE OTHER HAND, HAS INVOKED RULE 8 D IN VIEW OF THE SAME, THOUGH NOT MANDATORY, IN ANY CASE PRESCRIBES A REASONABLE METHOD FOR DETERMINING THE AMOUNT TO BE DISALLOWED, AND ON WHICH BASIS ALONE THE DISALLO WANCE U/S.14A FOR YEARS PRIOR TO A.Y. 2008-09 HAS TO BE, IN TERMS OF GODREJ & BOYCE (SUPRA), EFFECTED. THE ASSESSEE HAS NOT FURNISHED ANY SEPARATE EXPENSES RELATABLE TO THE EX EMPT DIVIDEND INCOME, EVEN AS ITS ESTIMATION HAS IN ANY CASE TO BE MADE. THIS EXPLAIN S THE REVENUES STAND. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE GIST OF THE RESPECTIVE CASES OF THE PARTIES HAVE BEEN SUMMED UP VIDE PARA 2 OF THIS ORDER. THE DISALLOWANCE MADE BY THE ASSESSEE IS ONLY IN RESPEC T OF DIRECT EXPENSES, QUA WHICH NO INTERFERENCE HAS BEEN MADE BY THE REVENUE, SO THAT ITS DISALLOWANCE AT RS.9.26 LACS IS INCLUSIVE OF THE DIRECT EXPENDITURE IN THE SUM OF R S.2,51,024/- DISALLOWED BY THE ASSESSEE. THE ASSESSEE HAS, THEREFORE, CLEARLY NOT MADE ANY D ISALLOWANCE QUA EITHER INDIRECT EXPENDITURE OR THE INTEREST EXPENDITURE, AND WHICH HAS NECESSARILY TO BE MADE IN VIEW OF SECTION 14A (3) OF THE ACT, EXCEPT OF COURSE WHERE A FINDING OF FACT THAT NO SUCH EXPENDITURE HAS ACTUALLY BEEN INCURRED BY THE ASSES SEE FOR THE RELEVANT PREVIOUS YEAR, I.E., AS RELATABLE TO THE TAX EXEMPT INCOME, IS ENTERED. THE MATTER IS FACTUAL, AND WE FIND THAT BOTH THE PARTIES HAVE NOT MADE OUT A CASE WITH REFE RENCE TO THE ACTUAL FACTS OBTAINING; 3 ITA NO. 267/MUM/2011 (A.Y. 2006-07) ABBOTT HEALTHCARE PRIVATE LIMITED VS. ADDL. CIT THERE BEING NO REFERENCE TO THE ACTUAL EXPENDITURE INCURRED AND CLAIMED BY THE ASSESSEE INFORMING THE REVENUES ESTIMATION AS WELL. UNDER THE CIRCUMSTANCES, THEREFORE, WE ONLY CONSIDE R IT FIT AND PROPER THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O., AS WAS DONE BY THE TRIBUNAL FOR THE IMMEDIATELY PRECEDING YEAR, AND WHICH WOULD ALSO EN ABLE THE PARTIES TO TAKE A CONSISTENT AND UNIFORM STAND IN THE MATTER. WE DECIDE ACCORDIN GLY. 4. THE SECOND ISSUE ARISING IN THE INSTANT APPEAL I S IN RESPECT OF CLAIM OF BONUS FOR RS.2,90,244/- IN RESPECT OF FINANCIAL YEAR 2003-04. THE SAME, THOUGH CLAIMED TO HAVE BEEN PAID DURING THE RELEVANT PREVIOUS YEAR, HAS NO T BEEN ADMITTED BY THE REVENUE IN THE ABSENCE OF A CLAIM IN ITS RESPECT HAVING BEEN MADE BY THE ASSESSEE PER ITS RETURN OR REVISED RETURN OF INCOME FOR THE YEAR IN VIEW OF TH E DECISION BY THE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT [2006] 284 ITR 323 (SC). 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE OBSERVE THAT THE IMPUGNED CLAIM HAD IN FACT BEEN WRONGLY CLAIMED BY THE ASSESSEE FOR A.Y. 2005-06. WE SAY SO AS THE IMPUGNED EXPENDITURE IS ADMITTEDLY CO VERED U/S. 43B, SO THAT IT COULD ONLY BE CLAIMED IN THE YEAR OF PAYMENT, EXCEPT OF COURSE WHERE THE LIABILITY IN ITS RESPECT IS DISCHARGED PRIOR TO THE DATE OF THE FILING OF THE R ETURN OF INCOME FOR THE RELEVANT YEAR, I.E., TO WHICH EXPENDITURE ACTUALLY PERTAINS, BEING, AS S TATED, FOR A.Y. 2003-04. THE CLAIM AND ITS CONSIDERATION IS AS SUCH MANIFEST FROM THE REC ORD ITSELF. AS EXPLAINED BY THE TRIBUNAL IN THE CASE OF SLS EXPORTS (P.) LTD . VS. DY. CIT [2010] 127 ITD 248 (COCH), THE DECISION IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) WOULD NOT APPLY UNDER SUCH CIRCUMSTANCES. IN FACT, THE HON'BLE JURISDICTIONAL HIGH COURT HAS CLA RIFIED THAT A CLAIM COULD, IN ANY CASE, BE PREFERRED BEFORE AN APPELLATE AUTHORITY INASMUCH AS IT IS ONLY THE TAX AS EXIGIBLE UNDER LAW THAT COULD BE CHARGED TO AND COLLECTED FROM THE ASSESSEE. UNDER THE CIRCUMSTANCES, THEREFORE, THERE BEING NO VERIFICATION ON FACTS AT THE END OF THE REVENUE, WE ONLY DEEM IT PROPER THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O. FOR EXAMINATION OF THE ASSESSEES CLAIM ON MERITS, AND A DECISION IN ACCOR DANCE WITH THE LAW AFTER HEARING THE ASSESSEE IN THE MATTER PER A SPEAKING ORDER. WE DEC IDE ACCORDINGLY. 4 ITA NO. 267/MUM/2011 (A.Y. 2006-07) ABBOTT HEALTHCARE PRIVATE LIMITED VS. ADDL. CIT 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. /-)0 &12/) $ 3$ 456 7 8 ' 9 ) $ ) :; ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 25, 2013 SD/- SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER % ( MUMBAI; <& DATED : 25.09.2013 '.&../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. % =) ( ) / THE CIT(A) 4. % =) / CIT - CONCERNED 5. @'AB !)&C1 , * C1- , % ( / DR, ITAT, MUMBAI 6. BD2 E( / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , % ( / ITAT, MUMBAI