Gujarat State Investments Ltd., Ahmedabad V. The Income Tax Officer Wd. 4(1), Ahmedabad

ITA 3324/AHD/2009

• Counselvise Citation: 332420514 RSA 2009
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: M G PATEL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.3324/AHD/2009 ASSESSMENT YEAR:2006-07 GUJARAT STATE INVESTMENTS LTD., 6 TH FLOOR, H.K. HOUSE, ASHRAM ROAD, AHMEDABAD PAN NO.AABCG4649M V/S . INCOME TAX OFFICER, WARD-4(1), AHMEDABAD (APPELLANT) .. (RESPONDENT) /BY APPELLANT SHRI M.G. PATEL, AR /BY RESPONDENT SHRI S.K. GUPTA, CIT-DR /DATE OF HEARING 05-03-2012 /DATE OF PRONOUNCEMENT 30-03-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER O F LD. COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, AHMEDABAD PASSED ON 26-0 8-2009 FOR ASSESSMENT YEAR 2006-07. 2. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/ S. 143(2) OF THE INCOME-TAX ACT, 1961 ISSUED TO THE ASSESSEE. THE AS SESSMENT PROCEEDINGS WERE COMPLETED VIDE ORDER 08-12-2008. THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.2,78,69,155/- ON ACCOUNT OF PRO PORTIONATE ADMINISTRATION AND OTHER EXPENSES. AGAINST THIS, ASSESSEE APPROACH ED BEFORE THE LD. ITA NO.3324/AHD/2009 A.Y. 2006-07 GSIL V. ITO WD-4(1) ABD PAGE 2 CIT(A), WHO CONFIRMED THE ADDITION MADE BY ASSESSIN G OFFICER. WHILE DISALLOWING EXPENSES, THE AO ADOPTED THE METHOD PRE SCRIBED IN RULE-8D OF THE IT RULE, 1962. THE ASSESSEE FEELING AGGRIEVED B Y THE ORDER OF LD. CIT(A) HAS APPROACHED TO THIS TRIBUNAL RAISING FOLLOWING G ROUNDS OF APPEAL FOR DETERMINATION:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-VIII, AHMEDABAD HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.2,78,69,155/- MADE BY THE ASSESSING OFFICER IN R ESPECT OF PROPORTIONATE ADMINISTRATION AND OTHER EXPENDITURE U/S. 14A OF THE INCOME TAX ACT, 1961 READ WITH PROVISIONS OF RULE 8 D OF THE INCOME TAX RULES, 1962. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -VIII, AHMEDABAD HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.2,78,69,155/- THOUGH THE SAME IS IN EXCESS OF AC TUAL ADMINISTRATION AND OTHER TOTAL EXPENDITURE OF RS.33,54,000/- ACTUA LLY INCURRED BY THE APPELLANT COMPANY WHICH IS APPARENTLY WRONG. 3. WE HAVE HEARD THE PARTIES, PERUSED THE MATERIALS ON RECORD AND THE JUDGMENTS CITED BY THE RIVAL RESPECTIVE PARTIES. IT IS ADMITTED POSITION, THE ASSESSING OFFICER HAS ADOPTED METHOD PRESCRIBED UND ER RULE 8D WHILE MAKING DISALLOWANCE U/S. 14A OF THE ACT. THE LD. AR HAS ARGUED BEFORE US THAT RULE 8D WOULD NOT APPLICABLE IN THE YEAR UNDER CONSIDERATION AND HE RELIED UPON THE FOLLOWING JUDGMENTS PASSED BY THE H ONBLE HIGH COURTS:- I) CIT V. CATHOLIC SYRIN BANK LTD. & ORS. 237 CTR 1 64 (KER) II) ACIT V. SUN INVESTMENTS (P) LTD. 48 SOT 159 (D EL) III) GODREJ AND BOYCE MFG. CO. LTD. V. DCIT (2010) 328 ITR 81 (BOM) IV) CIT V. RELIANCE INDUSTRIES LD. (2011) 339 ITR 632 (BOM) V) CIT V. WALFORT SHARE AND STOCK BROKERS P. LTD. ( 2010) 326 ITR 1 (SC) ON THE CONTRARY, LD. CIT-DR HAS SUPPORTED THE ACTIO N OF THE ASSESSING OFFICER AND WHICH IS CONFIRMED BY LD. CIT(A). IN VIEW OF TH E AUTHORITATIVE JUDICIAL PRONOUNCEMENTS THAT RULE 8D OF THE IT RULE, WOULD N OT APPLY PRIOR TO THE ITA NO.3324/AHD/2009 A.Y. 2006-07 GSIL V. ITO WD-4(1) ABD PAGE 3 ASSESSMENT YEAR 2007-08, THE MATTER IS REMITTED BAC K TO THE FILE OF THE ASSESSING OFFICER TO MAKE RE-ASSESSMENT AFTER GIVIN G SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE IMPUGNED ORDER OF THE LD. CIT(A) IS HEREBY SET ASIDE. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE OF CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 30/03/2012 '() * +, +, +, +, --. --. --. --. /. /. /. /. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. )-1 + +2 / CONCERNED CIT 4. + +2- / CIT (A) 5. .56 ---1, + -1 , '() / DR, ITAT, AHMEDABAD 6. 69: ;< / GUARD FILE. BY ORDER/ +, , /TRUE COPY/ =/ ' > + -1 , '() *