HATHIBHAI BULAKHIDAS P. LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 285/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3871 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 03-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R V SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SMT.ASHA VIJAY RAGHAVAN, JUDICIAL MEMBER I.T.A.NO.285/MUM/2009 A.Y 2005-06 HATHIBHAI BULAKHIDAS PVT. LTD., 86, MASJID BUNDER ROAD, MUMBAI 400 003 PAN: AAACH 7116D VS. ASST. COMMISSIONER OF I.T., CIRCLE 6(3), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.V.SHAH. RESPONDENT BY : SMT.JOTHILAKSHMI NAYAK. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL ASSESSEE HAS RAISED VARIOUS GROUNDS , BUT AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE ONLY DISPUTE INVOLVED IS REGARDING CONFIRMATION OF ADDIT ION U/S.14A. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD RETURNED AL L THE INCOME AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN SUSTAINED U /S.14A. 2. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE MAT TER MAY BE SET ASIDE FOR VERIFICATION AND ALSO IN THE LIGHT OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG . CO.LTD. VS. DCIT [43 DTR 171]. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT DURING ASSESSMENT PROCEEDINGS, AO HAD NOTICED THAT THE ASSESSEE HAD MADE CERTAIN INVESTMENTS IN SOME MUTUAL FUNDS AND T HAT IS WHY DISALLOWANCES WERE MADE U/S.14A. THE SPECIAL BENCH OF THE TRIBUNAL IN 2 THE CASE OF CHEM INVESTMENT LTD. VS. ITO [121 ITD 3 18] HAS HELD THAT EVEN WHEN NO INCOME IS RECEIVED, DISALLOWANCE U/S.1 4A CAN BE MADE. SINCE THE INCOME FROM MUTUAL FUNDS IS LIKELY TO BE EXEMPT, THEREFORE, ADDITION WAS POSSIBLE. HOWEVER, AT THE SAME TIME TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO.LT D. VS. DCIT [SUPRA] HAS HELD THAT RULE 8D IS NOT OF RETROSPECTIVE NATUR E. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND REMIT THE MATTER BACK TO THE FILE OF THE AO FOR RE-EXAMIN ATION OF THE WHOLE ISSUE AND THE SAME MAY BE DECIDED IN THE LIGHT OF T HE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF CHEM I NVESTMENT LTD. VS. ITO [SUPRA] AND HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF GODREJ & BOYCE MFG. CO.LTD. VS. DCIT [SUPRA] . NEED LESS TO SAY THAT THE ASSESSEE SHOULD BE PROVIDED AN ADEQUATE OPPORTU NITY OF BEING HEARD. 4. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF NOVEMBER, 2010. SD/- SD/- (ASHA VIJAY RAGHAVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 12 TH NOVEMBER, 2010. P/-* 3