PHARMALAB PACKAGING SYSTEMS P.LTD, MUMBAI V. ACIT CIR 10(3), MUMBAI

ITA 3248/MUM/2010

• Counselvise Citation: 324819914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI R.V. EASWAR (PRESIDENT) AND SHRI B. R AMAKOTAIAH (AM) I.T.A. NO.3248/MUM/2010 ASSESSMEN T YEAR : 2007-08. M/S. PHARMALAB PACKAGING SYSTEMS PVT. LTD., 3 RD FLOOR, KASTURI SANGHVI ESTATE, GOVANDI STATION ROA D, GOVANDI (EAST),. MUMBAI 400 088. .. APPELLANT (PAN: AABCP 7841 A) VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 10(3), MUMBAI .. RESPONDENT APPELL ANT BY : SHRI SUNIL JHUNJHUNWALA RESPONDENT BY : SHRI SATBIR SINGH (CIT-DR) O R D E R PER B. RAMAKOTAIAH (AM) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-22, MUMBAI, D ATED 18-03-2010. THE ASSESSING OFFICER ON NOTICING THAT THE ASSESSEE H AD RECEIVED DIVIDEND INCOME OF ` 22,17,639/- WHICH WAS CLAIMED AS EXEMPT FROM TAX, I NVOKED THE PROVISIONS OF SECTION 14A READ WITH SECTION 8D AND MADE A DISALLO WANCE OF ` .10,53,908/-. 2 I.T.A. NO.3248/MUM/2010 ASSESSMEN T YEAR : 2007-08. 2. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED THAT IT HAD NOT INCURRED ANY EXPENSES FOR EARNING THE EXEMPT INCOME AND THE INVE STMENTS MADE WERE OUT OF SURPLUS FUNDS AVAILABLE AND CONTESTED THE SAME BOTH ON FACTS AND ALSO ON LAW. THE CIT(A), HOWEVER, FOLLOWING THE SPECIAL BENCH DECISI ON OF THE TRIBUNAL IN THE CASE OF DAGA CAPITAL MANAGEMENT PVT. LTD. (117 ITD 169) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ISSUE IS CONSIDERED AND DECIDED BY THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. V. DCIT (328 ITR 81) AND TH E ASSESSEE HAS NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF THE A SSESSING OFFICER FOR DETERMINING THE REASONABLE AMOUNT UNDER SECTION 14A FOLLOWING THE ABOVE JUDGMENT. 4. SINCE THE PROVISIONS OF RULE 8D WHICH WAS FOLLOW ED BY THE A.O. AND THE LEARNED CIT(A) ARE NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION AS HAS BEEN CONSIDERED AND DECIDED BY THE JURISDICTION AL HIGH COURT IN THE CASE OF AND GODREJ AND BOYCE MFG. CO. LTD. V. DCIT (SUPRA), THE A.O. HAS TO CONSIDER THE DISALLOWANCE OF A REASONABLE AMOUNT. FOR THIS RE ASON THE DISALLOWANCE MADE BY THE A.O. IS SET ASIDE AND THE MATTER IS RESTORED BA CK TO THE FILE OF THE A.O. WITH A 3 I.T.A. NO.3248/MUM/2010 ASSESSMEN T YEAR : 2007-08. DIRECTION TO CONSIDER IT AFRESH KEEPING IN MIND THE PRINCIPLES ESTABLISHED BY THE ABOVE DECISION OF THE HONBLE BOMBAY HIGH COURT OR ANY OTHER JUDGMENT OF THE SUPERIOR JUDICIAL FORUM ON THE ISSUE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE, 2011. SD. SD. (R.V. EASWAR) (B. RAMA KOTAIAH) PRESIDENT ACC OUNTANT MEMBER MUMBAI, DATED: 22 ND JUNE, 2011. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T-10,MUMBAI. 4. CIT(A)-22,MUMBAI 5. DR,C -BENCH (TRUE COPY) KN/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI.