ABHIDEEP CHEMCIALS P.LTD, MUMBAI V. ADDL CIT 10(1), MUMBAI

ITA 3658/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48791 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN KUMAR
• Assessee Lawyers: K SHIVARAM
• Keywords: Rule 8D; Set aside
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NOS.3657 & 3658/MUM/2010 : AS ST.YEARS 2006-2007 & 2007-2008 M/S.ABHIDEEP CHEMICALS PRIVATE LIMITED 503 KESHAVA, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI 400 051. PAN : AAACA5336N. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX RANGE 10(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.SHIVARAM RESPONDENT BY : SHRI SHRAVAN KUMAR O R D E R PER R.S.SYAL (AM) : THESE TWO APPEALS BY TH E ASSESSEE RELATING TO THE ASSESSMENT YEARS 2006- 2007 AND 2007-2008 INVOL VE SOME COMMON ISSUES, WE ARE, THEREFORE, DISPOSING THEM OFF BY THIS CONSOLIDATED ORDE R FOR THE SAKE OF CONVENIENCE. ASST. YEAR 2006-2007 2. THE ONLY ISSUE RAISED IN THIS A PPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.97,762 MADE U/S.43B(F) OF THE ACT. BR IEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSE E WHILE FILING RETURN ADDED THIS AMOUNT. THEREAFTER IT CAME ACROSS SOME JUDGEMENT STRIKING DOWN THE PROVISIONS OF SECTION 43B(F) PERTAINING TO LEAVE ENCASHMENT. BEFORE TH E LEARNED CIT(A) IT WAS ARGUED THAT THE SAID AMOUNT BE NOT DISALLO WED. NOT CONVINCED WITH THE ASSESSEES SUBMISSION, THE LEARNED CIT(A) DISMISSED THIS GROUND RAISED BEFORE HIM. ITA NOS.3657 & 3658/MUM/2010 M/S.ABHIDEEP CHEMICALS PRIVATE LIMITED. 2 3. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD IT IS SEEN THAT THE ASSESSEE CLAIME D DEDUCTION FOR THE FIRST TIME BEFORE THE LEARNED CIT(A) WHICH WAS NOT GRANTED. THE LEARNED A.R. FAIRLY CONCEDED BEFORE US THAT THERE WAS NO FORCE IN THE CLAIM FOR MAKING DEDUCTION BUT HE SIMPLY WANTED TO KEEP THE ISSUE ALIVE. IN VI EW OF THE CONTENTION MADE BE FORE US, WE DISMISS THIS GROUND OF APPEAL. 4. IN THE RESULT THE APPEAL IS DISMISSED. ASST. YEAR 2007-2008 5. FIRST TWO GROUNDS ARE AGAINST THE C ONFIRMATION OF DISALLOWANCE OF RS.84,886 BEING THE PROVISION MADE TOWARDS LEAV E ENCASHMENT. BOTH THE SIDES ARE IN AGREEMENT THAT THE FA CTS AND CIRCUMSTANCES OF THIS ISSUE ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF ASSESS MENT YEAR 2006-2007. FO LLOWING THE VIEW TAKEN HEREINABOVE, WE DISM ISS THIS GROUND. 6. GROUND NO.3 IS AGAINST THE CONFIR MATION OF ADDITION MADE BY THE ASSESSING OFFICER U/S.14A OF THE ACT. THE A.O. H AS COMPUTED THE DISALLOWANCE U/S.14A AT RS.77,759. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. AGGRIEVED THEREBY, THE ASSESSEE IS IN A PPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DISALLOWANCE U/S 14A IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE H ONBLE BOMBAY HIGH COURT IN GODREJ & BOYCE LTD. MFG. CO. VS. DCIT (2010) 328 ITR 81 (BOM) HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE IN CIRCUMSTANCES AS ARE PREVAILING PRESENTLY AND THE DISALLO WANCE HAS TO BE WORKED OUT BY THE AO ON SOME `REASONABLE BASIS AND NOT RULE 8D. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE ITA NOS.3657 & 3658/MUM/2010 M/S.ABHIDEEP CHEMICALS PRIVATE LIMITED. 3 QUANTUM OF DISALLOWANCE, AS PER THE AF ORE-NOTED JUDGMENT, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THIS APPEAL IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 4 TH DAY OF MAY, 2011. SD/- SD/- (V.DURGA RAO) JUDICIAL MEMBER (R.S.SYAL) ACCOUNTANT MEMBER MUMBAI : 4 TH MAY, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXI, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.