ESSVEE INVESTMENT ADVISORS P.LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 2968/MUM/2012

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6821 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: PRAVIN KUMAR BAFNA
• Keywords: Earning of tax free income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 2968 / MUM/20 12 ( ASSESSMENT YEAR : 2008 - 09 ) M/S. ESSVEE INVESTMENT ADVISORS PVT. LTD., 102, FREE PRESS HOUSE FREE PRESS JOURNAL ROAD NARIMAN POINT MUMBAI 400 021 VS. THE DEPUTY COMMISSIONER OF IT CIRCLE 3(1) M.K.ROAD MUMBAI PAN/GIR NO. AAACE0814D APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI PRAVIN KUMAR BAFNA REVENUE BY SHRI V. JUSTIN DATE OF HEARING 18 / 05 /201 8 DATE OF PRONOUNCEME NT 29 / 05 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 6, MUMBAI DATED 22/03/2018 FOR A.Y.2008 - 09 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. ONLY GRIEVANCE OF ASSESSEE RELATES TO DISALLOWANCE MADE U/S.14A R.W.RULE 8D AMOUNTING TO RS.67,38,678/ - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS DEALING IN SECURITIES AND FINANCIAL ACTIVITIES. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE GOT DIVIDEND ITA NO. 2968/MUM/2012 M/S. ESSVEE INVESTMENT ADVISORS PVT. LTD., 2 INCOME OF RS.23,91,501/ - . HOWEVER, AO MADE DISALLOWANCE OF RS.67,38,678/ - UNDER RULES 8D. 5. IT WAS CONTENTION OF LEARNED AR THAT THE SHARES HELD BY ASSESSEE AS STOCK IN TRADE IS TO B E EXCLUDED. AS AN ALTERNATE, IT WAS ARGUED THAT DISALLOWANCE U/S.14A SHOULD BE RESTRICTED TO THE AMOUNT OF EXEMPT INCOME RECEIVED DURING THE YEAR. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND DO NOT FIND ANY MERIT IN THE CONTENTION OF LEARNED AR WITH REGA RD TO EXCLUDING THE SHARES HELD AS STOCK IN TRADE WHILE COMPUTING AVERAGE INVESTMENT ON WHICH DISALLOWANCE IS WARRANTED I N VIEW OF THE RECENT DECISION OF HONBLE SUPREME COURT IN CASE OF MAXOOP INVESTMENT , DATED 12/02/2018, . HOWEVER, WITH REGARD TO ASSESSE ES CONTENTION TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF DIVIDEND INCOME, WE ARE INCLINED TO AGREE , IN VIEW OF THE DECISION IN THE CASE OF DELHI HIGH COURT IN CASE OF JOINT INVESTMENTS PVT. LTD., DATED 25/02/2015. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY HONBLE DELHI HIGH COURT, WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE U/S.14A TO THE EXTENT OF EXEMPT INCOME RECEIVED DURING THE YEAR UNDER CONSIDERATION. WE DIRECT ACCORDINGLY. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 05 /201 8 SD/ - ( AMARJIT SINGH ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 29 / 05 /201 8 KARUNA S R. PS ITA NO. 2968/MUM/2012 M/S. ESSVEE INVESTMENT ADVISORS PVT. LTD., 3 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//