J.M FINANCIAL INSTITUTIONAL SECURITIES LTD, MUMBAI V. CIT 3, MUMBAI

ITA 2863/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4406 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRIDR
• Assessee Lawyers: K SIVARAM
• Section: 14A; 263

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI-JBENCH , , BEFORE S/SH. SANJAY GARG, JUDICIAL MEMBER & ASHWA NI TANEJA, ACCOUNTANT MEMBER /.ITA NO.2863/MUM/2014, /ASSESSMENT YEAR-2009-10 J.M. FINANCIAL INSTITUTIONAL SECURITIES LTD.(SUCCESSOR OF JM FINANCIAL VENTURES LTD.) 7 TH FLOOR, CNERGY, APPASAHEB MARATHE MARG, PRABHADEVI MUMBAI-400 025. PAN NO.AAACM 7079 C VS. CIT-3, ROOM NO.612, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( / APPELLANT ) ( /RESPONDENT) APPELLANT BY S/SHRI K.SIVARAM & SANJAY PARIKH RESPONDENT BY SHRI ALOK JOHRI-DR DATE OF HEARING : 17.12.2015 DATE OF PRONOUNCEMENT : 08.01.2015 O R D E R PER ASHWANI TANEJA, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER PASSED BY THE LD. CIT-3 , MUMBAI U/S. 263 FOR ASSESSMENT YEAR 2009-10 VIDE ORDER DT.10.3.2014. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- A) REVISION U/S. 263 1) THE LEARNED COMMISSIONER OF INCOME TAX - 3, MUMB AI (CIT) ERRED ON FACTS AND IN LAW IN SETTING ASIDE THE ORDER PASSED BY THE INCOME TAX OFFICER 3(2)(1), MUMBAI (AO) HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER (AO) WAS PASSED WITHOUT APPLICATION OF MIN D OR FAILED TO APPLY HIS MIND TO THE CASE IN ALL PERSPECTIVE AND THEREFORE THE ORDER WAS ERRONEOUS. 2) THE LEARNED CIT ERRED ON FACTS AND IN LAW IN HOL DING THAT THE AO HAD NOT MADE ANY ENQUIRY BEFORE ACCEPTING THE DISALLOWA NCE MADE BY THE 2 ITA NO.2863/M/14-JM FINANCIAL APPELLANT U/S. 14A OF RS. 1,54,50,477/- AND HENCE THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE R EVENUE. 3) THE APPELLANT PRAYS THAT YOUR HONOUR HOLD THAT T HE ORDER PASSED BY THE AO WAS AFTER MAKING PROPER INQUIRY AND WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HEN CE THE ORDER PASSED BY THE CIT U/S. 263 SETTING ASIDE THE ASSESSMENT MADE BY THE AO, MAY BE HELD TO BE BAD IN LAW. B) GENERAL 4) THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER AND THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DE LETE OR MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE ORDER UNDER SECTION 263 HAS BEEN PASSED BY THE CIT ON THE GROUND THAT AO HAD PASSED THE ASSESSMENT ORDER WITHOUT APPLICAT ION OF MIND WITH RESPECT TO DISALLOWANCE U/S.14A. 3. DURING THE COURSE OF HEARING IT HAS BEEN SUBMITTED BY THE LD. COUNSEL THAT AGGREGATE EXPENSES DEBITED IN THE P&L ACCOUNT OF TH E ASSESSEE ARE TO THE TUNE OF RS.1,98,84,182/-, AS AGAINST WHICH THE ASSESSEE ITS ELF DISALLOWED VOLUNTARILY U/S. 14A A SUM OF RS.1,54,50,477/- AS PER COMPUTATION SH EET ENCLOSED IN THE PAPER BOOK. IT WAS FURTHER SUBMITTED THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS QUERIES WERE ASKED BY THE ASSESSING OFFICER WITH RE SPECT TO DISALLOWANCE U/S. 14A, AND IN RESPONSE TO THE SAME, THE ASSESSEE HAD FURNI SHED REQUISITE INFORMATION AND DETAILS AND THESE WERE DULY CONSIDERED BY THE AO AN D ONLY THEREAFTER CLAIM, OF THE ASSESSEE WAS ACCEPTED IN THE ASSESSMENT ORDER. IT I S ALSO SUBMITTED THAT NO JUSTIFICATION HAS BEEN GIVEN BY THE LD. CIT THAT H OW DISALLOWANCE MADE BY THE ASSESSEE VOLUNTARILY WAS INCORRECT. IT HAS ALSO NOT BEEN SHOWN BY THE LD.CIT THAT DISALLOWANCE WORKS OUT TO BE FOR A GREATER AMOUNT. ONLY ON VAGUE REMARKS THE 3 ITA NO.2863/M/14-JM FINANCIAL ASSESSMENT HAS BEEN SET ASIDE. ON THE OTHER HAND LD . DR HAS RELIED UPON THE ORDER OF THE CIT. 4. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH SIDES, ORDERS OF THE LOWER AUTHORITIES AND MATERIAL PLACED BEFORE US FOR OUR CONSIDERATION. IT IS NOTED BY US THAT ASSESSEE IS A NON-BANKING FINANCIAL COMPANY . DURING THE YEAR, IT HAS EARNED INTEREST INCOME ALSO, WHICH IS TAXABLE UNDER THE IN COME TAX LAW. IT HAS ALSO EARNED DIVIDEND INCOME, WHICH HAS BEEN CLAIMED AS EXEMPT I N THE COMPUTATION SHEET. IT IS NOTED THAT VOLUNTARY DISALLOWANCE OF RS.1,54,50,477 /- HAS BEEN MADE BY THE ASSESSEE IN THE COMPUTATION SHEET. FURTHER DETAILS WERE ASKED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . IN RESPONSE, THE ASSESSEE SUBMITTED DETAILED BREAK UP AND JUSTIFICATION FOR M AKING PROPORTIONATE DISALLOWANCE OUT OF THE EXPENSES CLAIMED BY THE ASS ESSEE IN THE P&L ACCOUNT. ITEM-WISE BREAK-UP OF EXPENSES HAS BEEN GIVEN JUSTI FYING ALLOCATION OF EXPENSES FOR EARNING EXEMPTED INCOME. ALL THESE DETAILS WERE DULY EXAMINED BY THE ASSESSING OFFICER, AND THEREAFTER ONLY THE ASSESSIN G OFFICER FOUND THAT VOLUNTARY DISALLOWANCE MADE BY THE ASSESSEE IN THE RETURN FI LED BY IT, WAS JUSTIFIED AS PER LAW AND FACTS. IN THE ORDER PASSED U/S. 263 LD. CIT HAS ALLEGED THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER. WE FI ND THAT THERE ARE NO JUSTIFIED BASIS ON THE PART OF LD. CIT TO HOLD IT SO. NOTHING HAS BEEN MENTIONED IN THE ORDER BY THE LD. CIT THAT HOW THE DISALLOWANCE MADE U/S.1 4A WOULD BE OF AN AMOUNT MORE THAN THE DISALLOWANCE MADE BY THE ASSESSEE ITS ELF. IT IS NOTED THAT THE ASSESSEE HAS ITSELF MADE DISALLOWANCE OF RS.1.54 CRORES AS A GAINST TOTAL EXPENDITURE OF RS.1.98 CRORES, AND ITS JUSTIFICATION HAS ALSO BEEN GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE VIEW TAKEN BY THE ASSES SING OFFICER IS CERTAINLY ONE OF THE POSSIBLE VIEWS AS PER LAW. WE FURTHER FIND T HAT THE DISALLOWANCE MADE BY THE ASSESSEE VOLUNTARILY IN THE RETURN IS JUSTIFIED AS PER LAW AND FACTS. KEEPING IN VIEW 4 ITA NO.2863/M/14-JM FINANCIAL ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND TAK ING HELP FROM THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF FINE JEWE LLERY (372 ITR 303) , THE ORDER PASSED BY THE LD. CIT IS CONTRARY TO LAW AND FACTS AND, THEREFORE, IT IS HEREBY QUASHED. 5. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COU RT ON 08.01.2016. 08 , 2016 SD/- SD/- ( /SANJAY GARG ) ( /ASHWANI TANEJA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER , MUMBAI, DATED : 08.01.2016 JV, SR. PS / 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