CYRUS INVESTMENT P.LTD, MUMBAI V. DCIT 1(1), MUMBAI

ITA 3672/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0703 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR LD
• Assessee Lawyers: BEHARILAL LD
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 143(3); 14A; 115JB

Judgement Text

ITA NO.3672/MUM/2015 CYRUS INVESTMENTS PRIVATE LIMITED ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3672/MUM/2015 ( / ASSESSMENT YEAR: 2010-2011) C YRUS INVESTMENT PRIVATE LIMITED (CIN:U65920MH1923PTC001053) ESPLANADE HOUSE, HAZARIMAL SOMANI MARG FORT MUMBAI 400 001 / VS. D EPUTY COMMISSIONER OF INCOME TAX 1(1) AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 ./ ./PAN/GIR NO. AAACC-2880-P ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ASSESSEE BY : SHRI BEHARILAL, LD. AR REVENUE BY : SHRI ARUN KUMAR, LD. DR / DATE OF HEARING : 08/05/2017 / DATE OF PRONOUNCEMENT : 12/05/2017 ITA NO.3672/MUM/2015 CYRUS INVESTMENTS PRIVATE LIMITED ASSESSMENT YEAR 2010-11 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY THE ASSESSEE FOR THE ASS ESSMENT YEAR [AY] 2010-11 ASSAILS THE ORDER OF THE LD. COMMISSIO NER OF INCOME-TAX (APPEALS)-2 [CIT(A)], MUMBAI DATED 18/03/2015 QUA CONFIRMATION OF SECTION 14A DISALLOWANCE READ WITH RULE 8D(2)(III) FOR RS.47,39,650/-. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT CORPORATE ASSESSEE, WAS ASSESSED FOR IMPUGNED AY U/S 143(3) AT LOSS OF RS.2,19,62,779/- AFTER CERTAIN ADJUSTMENTS / DISALLOWANCES AS AGAINS T RETURNED LOSS OF RS.2,88,06,195/- E-FILED BY ASSESSEE ON 15/10/2010. ONE OF THE DISALLOWANCE SUFFERED BY ASSESSEE WAS RS.68,43,416/ - U/S 14A READ WITH RULE 8D. THE ASSESSEE WAS ENGAGED AS NBFC COMPANY DURING THE IMPUGNED AY AND EARNED EXEMPT INCOME OF RS.27.58 CR ORES AGAINST WHICH IT MADE SUO-MOTO DISALLOWANCE OF RS.169.28 LACS U/S 14A ON ACCOUNT OF FOLLOWING ITEMS:- HOWEVER, NOT-CONVINCED, AO APPLIED RULE 8D AND WOR KED THE SAID DISALLOWANCE AS RS. 237.71 LACS WHICH COMPRISED OF RS.154.20 LACS U/R 8D(2)(I), RS.21.03 LACS U/R 8D(2)(II) & BALANCE RS. 62.46 LACS U/R 8D(2)(III). RESULTANTLY, THE ASSESSEE SUFFERED NET DISALLOWANCE OF RS.68.43 LACS WHICH WAS ASSAILED WITH PARTIAL SUCCE SS BEFORE LD. CIT(A) NO. PARTICULARS AMOUNT (RS.) 1. INTEREST 1,50,29,000/- 2. LEGAL & PROFESSIONAL EXPENSES 3,17,792/- 3. DEMAT CHARGES 59,170/- 4. DIVIDEND COLLECTION CHARGES / ADMINISTRATION EXPENSES (5%) 15,22,316/- TOTAL 1,69,28,278/- ITA NO.3672/MUM/2015 CYRUS INVESTMENTS PRIVATE LIMITED ASSESSMENT YEAR 2010-11 3 VIDE IMPUGNED ORDER WHERE THE LD. CIT(A) DELETED AD DITION U/R 8D(2)(II) FOR RS.21.03 LACS AFTER NOTING THAT THE SAME WAS AL READY DISALLOWED U/R 8D(2)(I) WHICH REDUCED THE SAID DISALLOWANCE TO RS. 47.39 LACS. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE OUTSET, LD. COUNSEL FOR ASSESSE [AR] CONT ENDED THAT SIMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR AY 2008-09 & 2009-10 WHICH REACHED UP-TO THE LEVEL OF TRIBUNAL AND THE ISSUE I N BOTH THE YEARS HAS BEEN SET ASIDE TO LD. AO FOR FRESH ADJUDICATION AFT ER CONSIDERING THE METHOD OF DISALLOWANCE ADOPTED BY THE ASSESSEE AND THEREFORE, THE INSTANT ISSUE, ON SIMILAR LINES, MAY ALSO BE SET AS IDE TO LD. AO WITH SIMILAR DIRECTIONS. THE LD. DR RAISED NO OBJECTION AGAINST THE SAME. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED RELE VANT OF THE TRIBUNAL AND FIND THAT THE ISSUE IN EARLIER TWO AY VIDE ITA NO.2705/MUM/2103 ORDER DATED 19/01/2015 FOR AY 2009 -10 & ITA NO.2622/MUM/2013 ORDER DATED 08/04/2015 FOR AY 2008 -09 HAS BEEN SET ASIDE TO AO FOR FRESH ADJUDICATION. THEREFORE, WITHOUT DELVING MUCH DEEPER INTO THE ISSUE, ON SIMILAR LINES, WE SET ASI DE THE MATTER TO LD. AO FOR FRESH ADJUDICATION AFTER APPRECIATING THE METHO D OF DISALLAOWANCE ADOPTED BY THE ASSESSEE AND RE-ADJUDICATE THE SAME AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE, IN TURN, IS ALSO DIRECTED TO SUBSTANTIATE HIS CLAIM FORTHWITH FAILING WHICH LD. AO SHALL BE AT LIBERTY TO DECIDE THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. THE LD. AO IS ALSO DIRECTED TO RE-WORK BOOK PROF IT U/S 115JB AND CARRY FORWARD / SET-OFF OF LOSSES, IF APPLICABLE. ITA NO.3672/MUM/2015 CYRUS INVESTMENTS PRIVATE LIMITED ASSESSMENT YEAR 2010-11 4 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH MAY, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 12 .05.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. #&- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI