DCIT CIR 3(1), MUMBAI V. FORNAX REAL ESTATE LATD, NEW DELHI

ITA 275/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3904 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM BATRA
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOS AIN (JM) ITA NO. 275 /MUM/2014 ASSESSMENT YEAR: 2010-11 THE DCIT, CIRCLE 3(1 ) , ROOM NO. 607, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- 400020. VS. M/S. FORNAX REAL ESTATE LTD. M-62 & 63, 1 ST FLOOR, CONNAUGHT PLACE, NEW DELHI- 110001 PAN : AABCF1259G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. VIKRAM BATRA RESPONDENT BY : SHRI. JITENDRA SANGHVI DATE OF HEARING: 18/02/2016 DATE OF PRONOUNCEMENT: 18/02/2016 O R D E R PER JASON P. BOAZ, AM THE AFORESAID APPEAL HAS BEEN FILED BY THE REV ENUE AGAINST THE IMPUGNED ORDER DATED 18/10/2013 PASSED BY THE CIT( A)-6, MUMBAI FOR THE ASSESSMENT YEAR 2010-11, ON THE FOLLOWING G ROUNDS:- 1) ' WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN CONSIDERING THE INVESTMENTS, THE INCOME OF WHICH ARE NOT TAXABLE IN THE CALCULATION OF AVERAGE INVESTMENT WHILE WORKING OUT DISALLOWANCE U/S 14A R.W. RULE 8D BY CONSIDERING TH E AVERAGE INVESTMENT OF RS. 57,50,59,135/- INSTEAD OF CONSIDE RING THE AVERAGE INVESTMENT OF RS. 83,39,84,135/- AS COMPUTE D BY THE 2 ITA NO. 275 /MUM/2014 ASSESSMENT YEAR: 2010-11 ASSESSING OFFICER AND THUS DELETING THE DISALLOWANC E U/S14A TO THE EXTENT OF RS. 12,94,625/- . 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN RESTRIC TING THE DISALLOWANCE U/S 14A OF THE IT ACT WITHOUT APPRECIA TING THE FACT THE ASSESSEE HAS INVESTED IN MUTUAL FUNDS WHICH ARE CAPABLE OF GENERATING EXEMPT INCOME AS HELD BY THE DECISION OF SPECIAL BENCH OF HON. ITAT, DELHI IN THE CASE OF CHEMINVEST LTD. [121 ITD 318 (DEL)]. 3). THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 4). THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER A NY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. AT THE OUTSET, IT IS NOTICED THAT, IN RESPECT OF THE DISPUTED ISSUE THE TAX EFFECT ON THIS AMOUNT IS RS. 12,94,62 5/- WHICH IS MUCH BELOW THE SPECIFIED MONETARY LIMIT OF RS. 10 L AKHS. AS PER THE LATEST CBDT CIRCULAR NO. 21 OF 2015, DATED 10 TH DECEMBER, 2015, NEW GUIDELINES OF MONETARY LIMIT FOR FILING O F APPEALS BY THE DEPARTMENT HAS BEEN ISSUED, WHEREBY THE TAX EFFECT FOR FILING OF APPEAL BEFORE THE ITAT HAS BEEN PRESCRIBED AT RS. 1 0 LAKHS. IN THE SAID CIRCULAR, IT HAS BEEN SPECIFICALLY CLARIFIED T HAT THE SAID INSTRUCTION WILL APPLY RETROSPECTIVELY TO ALL THE P ENDING APPEALS. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND IS DISMISSED IN LIMINE . 3 ITA NO. 275 /MUM/2014 ASSESSMENT YEAR: 2010-11 ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEBRUARY, 2016 SD/- SD/- ( SANDEEP GOSAIN ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 18/02/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA