DCIT (OSD), MUMBAI V. HINDUSTAN EXPORT IMPORT CORPORATION P LTD, MUMBAI

ITA 3174/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8358 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 31-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H BENCH BEFORE SHRI I.P.BANSAL (JUDICIAL MEMBER) AND SHRI RAJENDRA (ACCOUNTANT MEMBER) ITA NO.3174/MUM/2011 ASSESSMENT YEAR: 2007-08 DCIT (OSD), R.NO.533, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. HINDUSTAN EXPORT IMPORT CORPORATION P. LTD., ANAND BHAVAN, 348, DR. NAOROJI ROAD, FORT, MUMBAI-01 PAN NO.AAACH 1112 M VS. (RESPONDENT) C.O.NO.129/MUM/2011 (ARISING OUT OF ITA NO.3174/MUM/2011) ASSESSMENT YEAR: 2007-08 HINDUSTAN EXPORT IMPORT CORPORATION P. LTD., ANAND BHAVAN, 348, DR. NAOROJI ROAD, FORT, MUMBAI-01 PAN NO.AAACH 1112 M DCIT (OSD), R.NO.533, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. VS. (RESPONDENT) APPELLANT BY : SHRI RAKESH RANJAN CROSS OBJECTOR BY: MS HEENA DOSHI DATE OF HEARING: 31.10.2012 DATE OF PRONOUNCEMENT: 31.10.2012 ORDER PER I.P.BANSAL, JM: THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARE DIRECTED AGAINST ORDER DATED 2.11.2010 OF LD CIT(A)-1, MUMBAI FOR ASSESSMENT YEAR 2007-08. 2. GROUND RAISED BY REVENUE READS AS UNDER: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A) IS JUSTIFIED IN REJECTING THE AOS W ORKING OF EXPENSES U/S.14A AS PER RULE 8D BY OBSERVING THAT ITA NO.3174/MUM/2011 C.O.NO.129/MUM/2011 ASSESSMENT YEAR: 2007-08 2 JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOY CE MFG CO. LTD. HAS DECIDED THIS ISSUE THAT RULE 8D WILL BE AP PLICABLE ONLY FROM A.Y. 2008-09 ONWARDS. 2. GROUNDS OF CROSS OBJECTION RAISED BY ASSESSEE AR E AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO WORK OU T THE DISALLOWANCE U/S 14A OF THE ACT. HE OUGHT NOT TO HA VE DONE SO. 2. WITHOUT PREJUDICE TO CROSS-OBJECTION NO.1, ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN N OT DELETING THE DISALLOWANCE OF RS.9,04,289/- MADE U/S 14A R.W.R. 8D. HE OUGHT NOT TO HAVE DONE SO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) HAS ERRED IN DISALLOWING THE LOSS I RS.22,714/- U/ S 94(7) OF THE ACT. HE OUGHT NOT TO HAVE DONE SO. 3. AS IT CAN BE SEEN FROM THE APPEAL FILED BY THE R EVENUE AND GROUND NOS.1 & 2 OF THE CROSS OBJECTIONS FILED BY THE ASS ESSEE, ALL OF THEM RELATE TO DISALLOWANCE UNDER SECTION 14A. 4. THE ASSESSING OFFICER MADE THE DISALLOWANCE OF R S.9,04,289/- WITH REFERENCE TO RULE 8D. LD CIT(A) HAS HELD THAT RULE 8D CANNOT BE APPLIED TO ASSESSMENT YEAR 2007-08 AS PER DECISION OF HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG CO LTD VS DCIT (328 ITR 81). HE HAS RESTORED THE MATTER BACK TO THE FILE OF AO T O MAKE THE DISALLOWANCE AS PER AFOREMENTIONED DECISION OF HON BLE JURISDICTIONAL HIGH COURT(SUPRA) AFTER GIVING THE ASSESSEE A REASO NABLE OPPORTUNITY OF HEARING. IT IS AGAINST THOSE DIRECTIONS OF LD CIT( A) THE REVENUE HAS RAISED THE AFOREMENTIONED GROUND. THE ASSESSEE IS ALSO OBJECTING TO ANY ADDITION MADE ON APPLICATION OF SECTION 14A. 5. AT THE OUTSET, IT MAY BE MENTIONED THAT IT WAS T HE COMMON CONTENTION OF BOTH THE PARTIES THAT RULE 8D IS NOT APPLICABLE FOR THE ITA NO.3174/MUM/2011 C.O.NO.129/MUM/2011 ASSESSMENT YEAR: 2007-08 3 ASSESSMENT YEAR UNDER CONSIDERATION. IF IT IS SO, WE ARE OF THE OPINION THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION SO FAR AS RELATES TO APPLICABILITY OF RULE 8D AND DIRECTED THE AO TO COM PUTE THE REASONABLE DISALLOWANCE AS PER DECISION OF AFOREMENTIONED DECI SION OF HONBLE JURISDICTIONAL HIGH COURT (SUPRA). WE FIND NO INFI RMITY IN SUCH DIRECTION OF LD CIT(A) AS SAME IS ACCORDING TO THE AFOREMENTI ONED DECISION OF HONBLE JURISDICTIONAL HIGH COURT. WE DECLINE TO I NTERFERE IN SUCH FINDINGS RECORDED BY LD CIT(A). THEREFORE, THE APP EAL FILED BY REVENUE WHICH IS ON THE SOLE ISSUE OF APPLICABILITY OF RULE 8D IS DISMISSED AND GROUND NOS.1 & 2 OF THE CROSS OBJECTION FILED BY AS SESSEE ARE ALSO DISMISSED. 6. SO FAR AS ISSUE RELATES TO CROSS OBJECTION NO.3 FILED BY ASSESSEE, LD COUNSEL FOR ASSESSEE HAS FAIRLY ADMITTED THAT THIS DISALLOWANCE HAS BEEN SUSTAINED BY LD CIT(A) ON THE BASIS OF NON-AVAILABI LITY OF DETAILS WHICH WERE NEITHER FILED BEFORE THE AO NOR BEFORE LD CIT( A). SHE CONTENDED THAT THE DETAILS ARE STILL NOT AVAILABLE. IN THIS VIEW OF SITUATION, AFTER HEARING BOTH PARTIES AND IN ABSENCE OF ANY DETAILS, WE HOLD THAT THE CLAIM OF ASSESSEE WITH REGARD TO DISALLOWANCE OF LOSS OF RS.22,714/- U/S.94(7) HAS RIGHTLY BEEN REJECTED BY LD CIT(A). WE DECLINE TO INTERFERE. HENCE, GROUND NO.3 OF CROSS OBJECTION FILED BY ASESSEE IS REJECTED. 7. IN THE RESULT, APPEAL FILED BY REVENUE AND CROSS OBJECTIONS FILED BY ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012 SD/- (RAJENDRA) ACCOUNTANT MEMBER SD/- (I.P.BANSAL) JUDICIAL MEMBER MUMBAI, DATED 31 ST OCTOBER, 2012 PARIDA ITA NO.3174/MUM/2011 C.O.NO.129/MUM/2011 ASSESSMENT YEAR: 2007-08 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX(A)-1. 4. CIT- 1 5. DEPARTMENTAL REPRESENTATIVE, BENCH H MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI