S D B VIEW INFRACON P.LTD, MUMBAI V. ITO 9(1)(3), MUMBAI

ITA 276/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0200 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: K G BORA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 276 /MUM/ 2017 (ASSESSMENT YEAR 20 12 - 13 ) M/S. D.B. VIEW INFRACON PVT. LTD. DB HOUSE, GEN. A.K. VAIDYA MARG, GOREGAON EAST MUMBAI - 400 063. PAN : AADCD1969P V S. ITO 9(1)(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI K.G. BORA DEPARTMENT BY MS. N. HEMALATHA DATE OF HEARING 2 4 . 8 . 201 7 DATE OF PRONOUNCEMENT 24 . 8 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20 - 09 - 2016 PASSED BY LD CIT(A) - 20, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2012 - 13. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE DISALLOWANCE MADE BY THE AO U/S 14A OF THE ACT. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED SHARE INCOME FROM PARTNERSHIP FIRMS TO THE TUNE OF RS.4820.16 LAKHS AND CLAIMED THE SAME AS EXEMPT. THE ASSESSEE DID NOT DISALLOW ANY AMOUNT U/ S 14A OF THE ACT AND HENCE THE AO ASKED THE ASSESSEE TO FURNISH WORKINGS FOR DISALLOWANCE AS PER RULE 8D. THE ASSESSEE WORKED OUT THE DISALLOWANCE AT RS.36.01 LAKHS AND THE AO DISALLOWED THE SAME U/S 14A OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAME. 3. THE CASE OF THE ASSESSEE IS THAT IT HAS ACTUALLY INCURRED EXPENSES TO THE TUNE OF RS.95,077/ - ONLY AND HENCE THE DISALLOWANCE U/S 14A SHOULD NOT EXCEED THE ACTUAL EXPENSES. THE LD A.R FURTHER SUBMITTED THAT THESE EXPENSES ARE IN THE NATURE OF AUDI T FEES, LEGAL EXPENSES AND OTHER PETTY EXPENSES, WHICH M/S. D.B. VIEW INFRACON PVT. LTD. 2 ARE REQUIRED TO BE INCURRED IN ORDER TO MAINTAIN A COMPANY. ACCORDINGLY HE SUBMITTED THAT NO DISALLOWANCE IS CALLED FOR U/S 14A OF THE ACT OR IN THE ALTERNATIVE, THE DISALLOWANCE SHOULD BE RESTRICTED TO RS.95,077/ - . 4. ON THE CONTRARY, THE LD D.R SUPPORTED THE ORDER PASSED BY LD CIT(A). 5. HAVING HEARD RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN COMPUTING DISALLOWANCE AS PER THE PROVISIONS OF RULE 8D, SINC E IT HAS RESULTED IN DISALLOWANCE OF AN AMOUNT IN EXCESS OF ACTUAL EXPENSES. IN MY VIEW, THE DISALLOWANCE SHOULD NOT EXCEED ACTUAL EXPENSES CLAIMED BY THE ASSESSEE. I NOTICE FROM THE PROFIT AND LOSS ACCOUNT THAT THE ONLY SOURCE OF INCOME OF THE ASSESSEE WAS SHARE INCOME FROM PARTNERSHIP FIRMS. HENCE IN MY VIEW THE ENTIRE AMOUNT OF RS.95,077/ - SHOULD BE CONSIDERED AS EXPENSES INCURRED IN RELATION TO THE EXEMPT INCOME. ACCORDINGLY I MODIFY THE ORDER PASSED BY LD CIT(A) AND DIRECT THE AO TO RESTRICT THE DI SALLOWANCE U/S 14A OF THE ACT TO RS.95,077/ - . I ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 4 . 8 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 2 4 / 8 / 20 1 7 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 OR DER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI