NIPRA FINANCIAL SERVICES P. LTD, MUMBAI V. ITO 4(2)(1), MUMBAI

ITA 3574/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55645 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 19-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: DEEPESH T CHHEDA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI V. DURGA RAO ( JM) I.T.A.NO.3574/MUM/2009 (A.Y. 2006-07) NIPRA FINANCIAL SERVICES PVT.LTD., 501,, CORPORATE ARENA, D.P. PIRAMAL ROAD, GOREGAON (W), MUMBAI-400 062. PAN: AABCN - 1311K. VS. ADDL.COMMR. OF INCOME-TAX, RANGE 10(3), MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHRI DEEPESH T. CHHEDA. RESPONDENT BY SHRI S HANTAM BOSE. DATE OF HEARING 19 - 10 - 2011 DATE OF PRONOUNCEMENT 25 - 10 - 2011 O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 15-05-2009 IN RELATION TO ASSESSMENT YEAR 2006-0 7. 2. THE FIRST GROUND IS AGAINST THE DISALLOWANCE OF LOSS ON UNREALIZED FUTURES & OPTIONS. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE CONTENDED THAT THE ISSUE RAISED IN THIS GROUND IS COVERED IN ASSESSEE S FAVOUR BY A SPECIAL BENCH DECISION IN THE CASE OF DCIT (INTERNATIONAL TAXATIO N) VS. BANK OF BAHRAIN & KUWAIT (2010) 132 TTJ (MUMBAI) (SB) 505, IN WHICH I T HAS BEEN HELD THAT THE LOSS INCURRED BY THE ASSESSEE ON ACCOUNT OF EVALUAT ION OF THE CONTRACT ON THE LAST ITA NO.3574/MUM/2009 NIPRA FINANCIAL SERVICES P.LTD. 2 DAY OF THE RELEVANT ACCOUNTING PERIOD, I.E. BEFORE THE DATE OF MATURITY OF THE FORWARD CONTACT, IS ALLOWABLE AS DEDUCTION. THE LD. D.R. CANDIDLY ACCEPTED THIS SUBMISSION. 4. IN VIEW OF THE RIVAL BUT COMMON SUBMISSIONS, WE DECIDE THIS ISSUE IN ASSESSEES FAVOUR. THIS GROUND IS ALLOWED. 5. THE SECOND GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF INTEREST AND OTHER EXPENDITURE OF RS.9,558/- ALLOCABLE TO DI VIDEND INCOME U/S.14A OF THE ACT. 6. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE RECEIVED DIVIDEND OF RS.69,784/- AND LONG-TERM CAPITAL GAIN OF RS.11, 93,06/- AND CLAIMED THEM AS EXEMPT FROM TAX. NO DISALLOWANCE WAS OFFERED U/S.14 A OF THE ACT. THE AO MADE DISALLOWANCE TO THE TUNE OF RS.9,558/- TOWARDS INTE REST AND OTHER EXPENSES. WHEN THE MATTER CAME UP BEFORE THE CIT(A), HE CONFI RMED THE DISALLOWANCE MADE BY THE AO. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED IN THIS AP PEAL IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE MFG. LTD. VS. DCIT (2010) 328 ITR 81 (BOM) IN WHICH IT HAS BEEN HELD THAT DISALLOWANCE IS CALLED FOR U/S.14A IN SUCH CIRCUMST ANCES. HOWEVER, THE MANNER OF COMPUTATION OF SUCH DISALLOWANCE HAS BEEN RESTORED TO THE FILE OF AO FOR MAKING ON SOME REASONABLE BASIS. IT HAS FURTHER BEEN HELD IN THIS CASE THAT THE PROVISIONS OF RULE 8D ARE NOT APPLICABLE AS THESE A RE PROSPECTIVE. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO ITA NO.3574/MUM/2009 NIPRA FINANCIAL SERVICES P.LTD. 3 COMPUTE DISALLOWANCE U/S.14A IN ACCORDANCE WITH THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE AFORENOTED CASE OF GODREJ & BOYCE LTD. 8. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25TH DAY OF OCTOBER, 2011. SD/- SD/- (V. DURGA RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 25TH OCTOBER , 2011. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-IV,,MUMBAI. 4 CIT,CITY-4,MUMBAI. 5.DR,F BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NO.3574/MUM/2009 NIPRA FINANCIAL SERVICES P.LTD. 4 DETAILS DATE INITIALS DESIGN ATION 1 . DRAFT DICTATED ON 1 9 - 1 0 - 2011 SR.PS/ 2 . DRAFT PLACED BEFORE AUTHOR 20 - 1 0 - 2011 SR.PS/ 3 . DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 . DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COME S TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 . DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 . DATE O N WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *