RANGJI REALTIES P.LTD, MUMBAI V. ITO 1(3)(1), MUMBAI

ITA 3787/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9100 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2016
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Keywords: Business income; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 3787 /MUM/20 16 (ASSESSMENT YEAR 20 12 - 13 ) M/S. SHRI RANGJI REALTIES PVT. LTD. (FORMERLY KNOWN AS SHRI RANGJI INVESTMENTS PVT. LTD.) 1 - B, 1 ST FLOOR, COURT CHAMBERS, 35, SIR V.T. MARG NEW MARINE LINES MUMBAI - 400 020. VS. ITO 1(3)(1) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAJCS5225J ASSESSEE BY SHRI GOVIND JAVERI DEPARTMENT BY S HRI PURSHOTTAM KUMAR DATE OF HEARING 5 .1 . 201 7 DATE OF PRONOUNCEMENT 5 . 1 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26.4.2016 PASSED BY THE LEARNED CIT(A) - 3, MUMBAI FOR A.Y. 2012 - 13, WHEREIN FOLLOWING TWO ISSUES ARE BEING CONTESTED : - A) DISALLOWANCE MADE U/S. 14A OF THE I.T. ACT UNDER NORMAL PROVISIONS OF THE ACT. B) NON - GRANTING OF CREDIT OF MAT U/S. 115JAA OF THE I.T. ACT. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE - COM PANY IS HAVING INCOME FROM INVESTMENT IN SHARES AND SECURITIES AND RENTAL INCOME FROM IMMOVABLE PROPERTIES. M/S. SHRI RANGJI REALTIES PVT. LTD. 2 3. THE FIRST ISSUE RELATES TO DISALLOWANCE U/S. 14A OF THE ACT. THE LD A.R SUBMITTED THAT THE ASSESSEE DID NOT RECEIVE ANY EXEMPT INCOME DURING TH E YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO DID NOT CLAIM ANY EXPENDITURE AND HENCE DID NOT MAKE ANY DISALLOWANCE U/S. 14A OF THE ACT. THE ASSESSING OFFICER, HOWEVER, COMPUTED THE DISALLOWANCE U/S. 14A OF THE ACT AS PER RULE 8D OF THE I.T. RULES AT ` 3,5 7,551/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LEARNED CIT(A) ALSO CONFIRMED THE SAME . 4. AT THE TIME OF HEARING LEARNED AR APPEARING FOR THE ASSESSEE INVITED OUT ATTENTION TO THE COPY OF RETURN OF INCOME FILED FOR THE YEAR UNDER CON SIDERATION AND SUBMITTED THAT THE ASSESSEE HAS CLAIMED A SUM OF ` 6,07,131/ - AS EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT AND ENTIRE EXPENSES HAS BEEN DISALLOWED WHILE COMPUTING THE BUSINESS INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE, IN EFFEC T , DID NOT CLAIM ANY EXPENDITURE AGAINST THE INCOME. ACCORDINGLY, HE SUBMITTED THAT THERE IS NO REQUIREMENT TO MAKE ANY DISALLOWANCE U/S. 14A OF THE ACT , AS THE ASSESSEE DID NOT CLAIM ANY EXPENDITURE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE CONTR A RY SUPPORTED THE ORDERS PASSED BY THE TAX AUTHORITIES. 6. HAVING HEARD THE RIVAL SUBMISSIONS, WE FIND MERIT IN THE CONTENTIONS PUT FORTH BY THE ASSESSEE. THE QUESTION OF MAKING DISALLOWANCE U/S. 14A WOULD ARISE ONLY IF THE ASSESSEE HAS CLAIMED ANY EXPEND ITURE AGAINST GROSS INCOME DISCLOSED. IN THE INSTANT CASE, ENTIRE AMOUNT OF EXPENDITURE DEBITED TO THE PROFIT AND LOSS ACCOUNT HAS BEEN DISALLOWED BY THE ASSESSEE WHILE COMPUTING BUSINESS INCOME, MEANING THEREBY, THE ASSESSEE DID NOT CLAIM ANY EXPENDITURE. HENCE, QUESTION OF MAKING ANY DISALLOWANCE U/S. 14A SHALL NOT ARISE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE MADE U/S. 14A OF THE ACT. M/S. SHRI RANGJI REALTIES PVT. LTD. 3 7. NEXT GROUND RELAT ES TO NON - GRANTING OF CREDIT FOR MAT WHILE COMPUTING TAX U/S. 115JAA OF THE ACT. LEARNED AR SUBMITT ED THAT THE ASSESSEE HAS RAISED A SPECIFIC GROUND ON THIS ISSUE, VIDE GROUND NO. 3 RAISED BEFORE THE LEARNED CIT(A) , BUT THE LEARNED CIT(A) HAS NOT DISPOSED OF THE SAME. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS TO BE RESTORED TO THE FILE OF THE LEARNED CIT(A) . ACCORDINGLY, WE RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) WITH THE DIRECTION TO ADJUDICATE THE SAME AFTER HEARING THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 05 . 1 .201 7. SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEM BER MUMBAI ; DATED : 05 / 1 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY. /ASSTT. REGISTRAR) PS ITAT, MUMBAI