JM FINANCIAL LTD, MUMBAI V. ITO 4(3)(1), MUMBAI

ITA 3441/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62268 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 19-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 29-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNDER SINGH
• Assessee Lawyers: SANJAY R PARIKH; K SHIVARAM
• Keywords: Business income; Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NO.3441/MUM/2011 : ASST. YEAR 2007-2008 M/S.JM FINANCIAL LIMITED 141, MAKER CHAMBERS-III NARIMAN POINT, MUMBAI 400 021. PAN : AAACJ2590B. THE INCOME TAX OFFICER WARD 4(3)(1) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : S/SHRI K.SHIVARAM & SANJAY R.PARIKH RESPONDENT BY : SHRI SUNDER SINGH DATE OF HEARING : 19.04.2012 DATE OF PRONOUNCEMENT : 25.04.2012 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 21.02.2011, IN RELATION TO THE ASSESSMENT YEAR 2007-2008. 2. FIRST GROUND IS AGAINST TAXING RENTAL INCOME UND ER THE HEAD `INCOME FROM HOUSE PROPERTY. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE RECEIVED LEASE RENT OF ` 13,72,560 IN RESPECT OF KAMANWALA CHAMBER, P.M.ROAD, MUMBAI AND SOME OTHER PROPERTY SITUATED A T AHMEDABAD. THIS INCOME WAS TREATED BY THE ASSESSEE AS ITS BUSINESS INCOME. THE ASSESSING OFFICER TREATED SUCH INCOME UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. THE LEARNED CIT(A), FOLLOWING HIS VIEW TAKEN IN ASSESSM ENT YEARS 2004-2005 TO 2006-2007, UPHELD THE ASSESSMENT ORDER ON THIS ISS UE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT HAS BEEN DULY ADMITTED ON BEHALF OF THE ASSESSEE THAT THE TRIBUNAL IN EARLIER ASSESSMENT YEARS HAS HELD SUCH INCOME TO BE TAXABLE UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. NO DISTINGUISHING FEA TURE IN THE FACTS OF THE INSTANT YEAR VIS--VIS THE EARLIER YEARS WAS BROUGH T TO OUR NOTICE. IN VIEW OF THIS ITA NO.3441/MUM/2011 M/S.JM FINANCIAL LIMITED. 2 CONCESSION AND RESPECTFULLY FOLLOWING THE PRECEDENT , WE UPHOLD THE ORDER ON THIS ISSUE. THIS GROUND IS NOT ALLOWED. 4. THE SECOND GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF ` 1,24,70,433 U/S 14A OF THE ACT. THE ASSESSING OFFIC ER DISALLOWED THE CLAIM OF THE ASSESSEE AMOUNTING TO ` 1,24,70,433 U/S.14A OF THE ACT. THE LEARNED CIT(A) SUSTAINED THE DISALLOWANCE IN FIRST APPEAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DIS ALLOWANCE U/S 14A IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE BOMBAY HIG H COURT IN GODREJ & BOYCE LTD. MFG. CO. VS. DCIT [(2010) 328 I TR 81 (BOM)] HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE IN CIRCUMSTANCES AS ARE PREVAILING PRESENTLY AND THE DISALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME `REASONABLE BASIS AND NOT RULE 8D. THIS POSIT ION HAS BEEN DULY ACCEPTED BY THE LD. AR. UNDER SUCH CIRCUMSTANCES, WE SET ASI DE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDI NG THE QUANTUM OF DISALLOWANCE, AS PER THE AFORE-NOTED JUDGMENT, AFTE R ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 25 TH DAY OF APRIL, 2012. SD/- SD/- (VIJAY PAL RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 25 TH APRIL, 2012. DEVDAS* ITA NO.3441/MUM/2011 M/S.JM FINANCIAL LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - X, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.