MANOHAR MANAK ALLOYS PVT.LTD, MUMBAI V. ACIT.,-4(2), MUMBAI

ITA 3484/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62580 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: RAJKUMAR SINGH
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NOS.3484 & 3485/MUM/2011 : ASST. YEARS 2006-20 07 & 2007-2008 M/S.MANOHAR MANAK ALLOYS PVT. LTD. C/O.B.C.BOTHRA & CO., CAS 297, TARDEO ROAD, WILLIE MANSION NANACHOW, 1 ST FLOOR, OPP. BANK OF INDIA MUMBAI 400 007. PAN : AAACM2688K. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 4(2) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI RAJ KUMAR SINGH RESPONDENT BY : SHRI M.RAJAN DATE OF HEARING : 06.06.2012 DATE OF PRONOUNCEMENT : 13.06.2012 O R D E R PER R.S.SYAL, AM : THESE TWO APPEALS BY THE ASSESSEE RELATE TO THE ASS ESSMENT YEARS 2006- 2007 AND 2007-2008. 2. THE ONLY ISSUE RAISED IN THESE TWO APPEALS IS AG AINST THE CONFIRMATION OF DISALLOWANCE U/S 14A. BRIEFLY STATED THE FACTS OF T HE CASE FOR ASSESSMENT YEAR 2006-2007 ARE THAT THE ASSESSEE EARNED TAX FREE DIV IDEND INCOME OF ` 64,500. NO DISALLOWANCE U/S 14A WAS OFFERED. THE ASSESSING OFF ICER COMPUTED THE DISALLOWANCE U/S 14A AS PER RULE 8D, WHICH LED TO T HE DISALLOWANCE OF ` 36,75,303. THE LEARNED CIT(A) UPHELD THE DISALLOWAN CE. 3. INSOFAR AS THE ASSESSMENT YEAR 2007-2008 IS CONC ERNED, THE ASSESSEE EARNED EXEMPT DIVIDEND INCOME OF ` 1,69,512. AS NO DISALLOWANCE WAS OFFERED BY THE ASSESSEE, THE A.O., INVOKING THE PROVISIONS OF RULE 8D, MADE THE ADDITION AT ` 28,26,349, WHICH CAME TO BE AFFIRMED IN THE FIRST A PPEAL. ITA NOS.3484 & 3485/MUM/2011 M/S.MANOHAR MANAK ALLOYS PRIVATE LIMITED. 2 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE LTD. MFG. CO. V. DCIT [(2010) 328 IT R 81 (BOM)] HAS HELD THAT DISALLOWANCE U/S 14A IS MAINTAINABLE IN THE CIRCUMSTANCES WHICH ARE PREVAILING BEFORE US. HOWEVER, IT HAS BEEN HELD THAT THE PROVISIONS OF RULE 8D CAN APPLY ONLY ON AND OR ASSESSMENT YEAR 2008-20 09. AS THE ASSESSMENT YEARS UNDER CONSIDERATION ARE BEFORE THE SAID ASSES SMENT YEAR, IN OUR CONSIDERED OPINION, THERE IS NO BASIS WITH THE AO FOR MAKING D ISALLOWANCE AS PER RULE 8D AND WITH THE CIT(A) TO SUSTAIN SUCH DISALLOWANCE. I N THIS JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, IT HAS BEEN LAI D DOWN THAT IN THE YEARS ANTERIOR TO ASSESSMENT YEAR 2008-2009, THE DISALLOW ANCE IS REQUIRED TO BE MADE ON SOME REASONABLE BASIS AND NOT AS PER RULE 8D. UN DER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDERS AND RESTORE MATTER TO THE FILE OF AO FOR WORKING OUT THE DISALLOWANCE U/S 14A ON SOME REASON ABLE BASIS IN CONFORMITY WITH THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIG H COURT. 5. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 13 TH DAY OF JUNE, 2012. SD/- SD/- (VIVEK VARMA) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 13 TH JUNE, 2012. DEVDAS* ITA NOS.3484 & 3485/MUM/2011 M/S.MANOHAR MANAK ALLOYS PRIVATE LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - VIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.