DEEPEN A PAREKH, MUMBAI V. ACIT CEN CIR 20, MUMBAI

ITA 3308/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0619 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ./ I.T.A. NO. 3308 /MUM/2013 ( / ASSESSMENT YEAR : 2009-10 SHRI DEEPEN A. PAREKH, 601 AUTO COMMERCE HOUSE, NANA CHOWK, KENNEDY BRIDGE, MUMBAI 400 007. / VS. D.C.I.T. CENTRAL CIR. 20, MUMBAI. ./ PAN : AAIPP6817G ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY NONE R E SPONDENT BY : SHRI LOVE KUMAR (D.R.) / DATE OF HEARING : 25-05-2015 / DATE OF PRONOUNCEMENT : 27-05-2015 [ !' / O R D E R PER R.C. SHARMA, A.M . : THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) -39,, MUMBAI DATED 14-01-2 013 FOR THE A.Y. 2009-10 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INC OME TAX ACT, 1961. ! 2. AT THE TIME OF HEARING, NOBODY FROM ASSESSEES SIDE HAS APPEARED INSTEAD OF GIVING NOTICES TO THE ASSESSEE. THE BENC H, THEREFORE DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. D.R. AN D CONSIDERING THE MATERIAL PLACED ON RECORD. ITA 3308/M/13 2 3. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO T HE ADDITION MADE U/S 14A READ WITH RULE 8-D OF THE INCOME TAX RULES, 1962. 4. WE HAVE HEARD LD. D.R. AND FOUND THAT THE DISALL OWANCE HAS BEEN MADE BY THE A.O. IN RESPECT OF INTEREST AND ADMINISTRATI VE EXPENSES ON THE PLEA THAT THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS. 6,11,9 45/-. THE CONTENTION OF THE ASSESSEE BEFORE THE A.O. WAS THAT HE HAS INCURR ED INTEREST EXPENDITURE OF RS. 4,519/- ONLY WHICH WAS PAID TO THE BANK FOR OVE RDRAFT FACILITY. IT WAS ALSO THE CONTENTION OF THE ASSESSEE THAT TOTAL EXPENSES CLAIMED IN THE P&L ACCOUNT WAS RS. 1,94,511/-, THEREFORE, THE TOTAL DISALLOWAN CE COULD NOT EXCEED THE EXPENSES DEBITED TO THE P&L ACCOUNT. HOWEVER, THE A.O. DID NOT CONSIDER THE ASSESSEES CONTENTION AND ARBITRARILY COMPUTED THE DISALLOWANCE AT RS. 6,19,220/-. BY THE IMPUGNED ORDER, THE LD. CIT(A) C ONFIRMED THE DISALLOWANCE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE CONTENTIONS OF THE LD. D. R. AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE ASSESSEE HAS DEBITED TOTAL EXPENDITURE OF RS. 1,94,511/-. THE DISALLOWAN CE U/S 14A READ WITH RULE 8-D IS BEING MADE IN RESPECT OF EXPENDITURE ATTRIBU TABLE TO EARNING OF EXEMPT INCOME. HOWEVER, IN NO CASE THE DISALLOWANCE CAN BE MORE THAN THE EXPENDITURE DEBITED AND CLAIMED BY THE ASSESSEE. IN THIS CASE, THE A.O. HAS DISREGARDED THE TOTAL EXPENDITURE DEBITED TO THE P& L ACCOUNT AND WORKED OUT THE DISALLOWANCE AT 25% OF THE DIVIDEND INCOME AS W ELL AS DISALLOWANCE UNDER RULE 8D(2)(III). WE DO NOT FIND ANY MERIT IN THE O RDER OF THE A.O. AND ACCORDINGLY THE SAME IS SET ASIDE AND REMIT THE MAT TER BACK TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH AFTER GIVING DUE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA 3308/M/13 3 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2015. !' # $% &! ' 27-05-2015. ( ) SD/- SD/- (D. MANMOHAN) (R.C. SHARMA) VICE PRESIDENT ACCOUNTANT MEMBER $ 4 MUMBAI ; &! DATED 17-05-2015 .5../ RK RKRK RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 6 () / THE CIT(A) 39, MUMBAI 4. 6 / CIT -CENT, 11, MUMBAI 5. 9:( 55;< , ;< , $ 4 / DR, ITAT, MUMBAI D BENCH 6. (>? @ / GUARD FILE. ' / BY ORDER, 9 5 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 4 / ITAT, MUMBAI