QUANTUM ASSET MANAGEMENT CO. P.LTD, MUMBAI V. ITO WD 3(3)(4), MUMBAI

ITA 2809/MUM/2012

• Counselvise Citation: 280919914 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: K K VED
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2809/MUM/2012 ( / ASSESSMENT YEAR : 2008-09) QUANTUM ASSET MANAGEMENT CO PVT.LTD. 505, REGENT CHAMBERS, NARIMAN POINT, MUMBAI-400021 / VS. THE INCOME TAX OFFICER WARD 3(3)(4), AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI-400020 ( / APPELLANT) .. ( !' / RESPONDENT) ./ $% ./ PAN/GIRNO.:AAACQ1297 & / APPELLANT BY : SHRI K K VED !' ' & /RESPONDENT BY : SHRI VIJAY KUMAR BORA ( ) ' * + / DATE OF HEARING : 29.10.2014 ,- ' * + /DATE OF PRONOUNCEMENT : 5.11.2014. / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 28- 01-2011 PASSED BY LD CIT(A)-7, MUMBAI AND IT RELATE S TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.4,66,463/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SEC. 14A OF THE ACT. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSES SEE DID NOT RECEIVE ANY DIVIDEND INCOME AND HENCE THE QUESTION OF MAKING AN Y DISALLOWANCE U/S 14A OF THE ACT DOES NOT ARISE. HE SUBMITTED THAT THIS VIE W FINDS SUPPORT FROM THE DECISIONS RENDERED RECENTLY BY VARIOUS HIGH COURTS. THE LD COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS MADE INVESTMENTS IN GROWTH SCHEMES OF THE ITA NO.2809/M/2012 2 MUTUAL FUNDS AND SUCH SCHEMES WILL NOT DECLARE ANY DIVIDEND. HE FURTHER SUBMITTED THAT THE GAINS ARISING ON SALE OF UNITS U NDER GROWTH SCHEME IS OFFERED TO TAX AS CAPITAL GAINS. ACCORDINGLY HE SUBMITTED THAT THE PROVISIONS OF SEC. 14A SHALL NOT BE APPLICABLE TO THE ASSESSEE DURING THE INSTANT YEAR. 3. ON THE CONTRARY, THE LD D.R SUBMITTED THAT T HE DIVIDEND GETS AUTOMATICALLY REINVESTED UNDER GROWTH SCHEMES OF MUTUAL FUND AND HENCE IT IS NOT CORRECT TO SAY THAT THE ASSESSEE DID NOT RECEIVE ANY DIVIDEND. 4. WHEN THE CONTENTIONS OF THE LD D.R WERE PUT FORTH TO THE LD A.R AND FURTHER WHEN IT WAS POINTED OUT THAT THE PECULIAR FACTS PRE VAILING IN THE INSTANT CASE WERE NOT EXAMINED BY THE AO, THE LD A.R AGREED THAT THIS ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. THE LD D.R ALSO DID NOT OBJECT TO THE PLEA PUT FORTH BY LD A.R. ACCORDINGLY, WE SET ASIDE THE ORD ER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO WITH T HE DIRECTION TO EXAMINE THIS ISSUE AFRESH AFTER AFFORDING NECESSARY OPPORTUNITY TO THE ASSESSEE. WE ALSO DIRECT THE AO TO PASS A SPEAKING ORDER, INTER ALIA, ON THE ISSUES VIZ., WHETHER THE PROVISIONS OF SEC. 14A SHALL APPLY TO THE FACTS PRE VAILING IN THE INSTANT CASE AND WHETHER THE ASSESSEE HAS INCURRED ANY EXPENDITURE I N EARNING THE EXEMPT INCOME, IF ANY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 5TH NOV, 2014 . ,- ( . /0 1 2 5TH NOV , 2014 - ' 3) 4 SD S D ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER / ( ) MUMBAI: 5TH NOV,2014. . . ./ SRL , SR. PS ITA NO.2809/M/2012 3 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ( 9* ( ) / THE CIT(A)- CONCERNED 4. ( 9* / CIT CONCERNED 5. 6. :; 3 !*< , + < , / ( ) / DR, ITAT, MUMBAI CONCERNED 3 = ) / GUARD FILE. > ( / BY ORDER, TRUE COPY ? $ (ASSTT. REGISTRAR) + < , / ( ) /ITAT, MUMBAI