DCIT CEN CIR 7(1), MUMBAI V. REKHA JHUNJHUNWALA, MUMBAI

ITA 3822/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0379 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN
• Assessee Lawyers: RUTUJA PAWAR
• Keywords: Search and seizure; Tax effect
• Section: 153A; 14A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 3822 / MUM/20 16 & 3823/MUM/2016 ( ASSESSMENT YEAR : 2006 - 07 & 2007 - 08 ) DCIT CEN CIR 7(1) R.NO.653, 6 TH FLOOR AAYAKAR BHAVAN, M.K.RO AD, MUMBAI - 400020 VS. SMT REKHA JHUNJHUNWALA 151, NARIMAN BHAVAN MUMBAI 400 021 PAN/GIR NO. APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI A MOHAN ASSESSEE BY MS. RUTUJA PAWAR DATE OF HEARING 31 / 07/ 201 8 DATE OF PRON OUNCEMENT 19 / 09 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY REVENUE AGAINST THE ORDER OF CIT(A) - 49, MUMBAI DATED 10/03/2016 FOR A.Y.2006 - 07 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.153A OF THE IT ACT, 1961 2. THE COMMON GROUND TAKEN BY THE REVENUE IN BOTH THE ASSESSMENT YEARS IS AS UNDER: - 1). WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT ( A ) , WAS JUSTIFIED IN DIRECTING THE AO TO DELETE THE DISALLOWANCE U/S 14A OF RS.72,44,504 / - MADE, RELYING ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF ALL CARGO LOGISTICS LTD(374 ITR 645). WITHOUT APPRECIATING THE FACT THAT THE DECISION OF THE HIGH COURT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED AND THE SAME IS PEND ING. ITA NO. 3822/MUM/2016 & 3823/MUM/2016 SMT. REKHA JHUNJHUNWALA 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS EARNING INCOME FROM BUSINESS HOUSE PROPERTY AND CAPITAL GAINS. DURING THE COURSE OF ASSESSMENT, AO MADE DISALLOWANCE U/S.14A IN THE ASSESSMENT ORDER FRAME D U/S.143(3) R.W.S. 153A OF THE ACT. 5. BY THE IMPUGNED ORDER, CIT(A) DELETED THE ADDITION AFTER OBSERVING THAT INTEREST FREE FUNDS WAS AVAILABLE AGAINST THE INVESTMENT IN SHARES AND SECURITIES. PRECISE OBSERVATION OF CIT(A) WAS AS UNDER: - 6.2.4 I FIND THAT THE APPELLANT HAS FILED RETURN U/S 153A, FOLLOWING THE SEARCH, INCLUDING THE SAID INCOME OF RS,261 ,278/ - ON ACCOUNT OF DISALLOWANCE U/S 14A TO THE TOTAL INCOME DECLARED U/S 139 ON 31.10.2006 AT RS. 25,21, 12.646/ - . I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS CORRECTLY WORKED OUT THE DISALLOWANCE U/S 14A ON THE SAME LINES AS COMPUTED BY THE A.O FOR A.Y 2004 - 05 & 2005 - 06 VIDE ORDER DATED 07.10.201 1 WHILE GIVING EFFECT TO THE ORDER OF THE ITAT DATED 10.12.2010, BY WHICH THIS ISSUE WAS SET ASID E TO THE FILE OF THE A.O FOR A,YRS.2004 - 05 TO 2006 - 07, ON THE GROUNDS OF CONSISTENCY. I FIND NO JUSTIFICATION FOR THE A.O TO COMPUTE THE DISALLOWANCE U/S 14A AT RS.75,05,785/ - IGNORING THE BASIS ON WHICH DISALLOWANCE U/S 14A HAD BEEN WORKED OUT FOR A.Y 2004 - 05 & 2005 - 06 VIDE ORDER DATED 07.10.2011 IN THE CASE OF THE APPELLANT, UNDER SIMILAR FACTS AND CIRCUMSTANCES AND IGNORING THE FACT THAT INTEREST FREE FUNDS OF RS.225.95 CRORES WAS AVAILABLE AGAINST THE INVESTMENT IN SHARES AND SECURITIES TO THE EXTENT OF RS.184.75 CRORES. 6.3 IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION OF RS.72,44,507/ - MADE TO THE TOTAL INCOME FILED IN RESPONSE TO NOTICE U/S 153A AT RS.25,25,11,488/ - IS FOUND TO BE WITHOUT ANY JUSTIFICATION AND THE SAME IS DELETED. 6. AT THE OUTS ET, LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2008 - 09 WHEREIN SIMILAR ADDITION HAS ITA NO. 3822/MUM/2016 & 3823/MUM/2016 SMT. REKHA JHUNJHUNWALA 3 BEEN DELETED BY THE CIT(A) WAS CONFIRMED BY THE TRIBUNAL AFTER HAVING FOLLOWING OBSERVATION. 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT OUR INDULGENCE IN THE PRESENT CASE HAS BEEN SOUGHT TO ADJUDICATE AS TO WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE DISALLOWANCE OF RS.68,07,509/ - MADE BY THE A.O UNDER SEC. 14A BY RELYING ON THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. ALL CARGO GLOBAL LOGISTICS LTD. (2015) 374 ITR 645 (BOM), OR NOT. WE FIND THAT IT REMAINS AS A MATTER OF A CONCEDED FACT THAT DURING THE COURSE OF THE SEARCH AND SEIZURE ACTION CONDUCTED ON THE ASSESSEE ON 29.08.2011, NO MATERIAL WHATSOEVER WAS FOUND AS REGARDS THE DISALLOWANCE UNDER SEC.L4A. WE FIND THAT THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. ALL CARGO GLOBAL LOGISTICS LTD. (2015) 374 ITR 645 (BOM) HAD UPHELD THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL, WHEREIN IT WAS OBSERVED THAT IN THE ABSENCE OF INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF THE SEARCH AND SEIZURE PROCEEDINGS CONDUC TED UNDER SEC. 132 OF THE ACT, NO ADDITION IN RESPECT OF AN UNABATED ASSESSMENT COULD BE MADE. WE ARE OF THE CONSIDERED VIEW THAT AS THE CIT(A) IN THE PRESENT CASE GOING BY THE RULE OF JUDICIAL DISCIPLINE HAD FOLLOWED THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA), THEREFORE, NO INFIRMITY EMERGES FROM HIS ORDER. WE ARE OF I THE CONSIDERED VIEW THAT THOUGH THE REVENUE HAD NOT ACCEPTED THE AFORESAID ORDER OF THE HON'BLE HIGH COURT OF BOMBAY AND HAD FILE D A SLP AGAINST THE SAME, HOWEVER, AS THE ORDER OF THE HON'BLE HIGH COURT I HAD NOT BEEN STAYED BY THE HON'BLE SUPREME COURT, THEREFORE, THE SAME HOLDS THE GROUND AS ON DATE. WE THUS FINDING OURSELVES TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE CIT(A) A ND FINDING NO REASON TO DISLODGE THE SAME, THEREFORE, UPHOLD HIS ORDER. 7. THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE EXACTLY SAME, WHEREIN IN THE SEARCH ASSESSMENT ADDITIO N MADE U/S.14A WAS DELETED BY THE CIT(A) AND THE TRIBUNAL AFTER RELYING ON THE DECISION OF THE BOMBAY HIGH COURT IN CASE OF ALL CARGO GLOBAL LOGISTICS LTD., CONFIRMED THE ACTION OF CIT(A) FOR SUCH DELETION. RESPECTFULLY ITA NO. 3822/MUM/2016 & 3823/MUM/2016 SMT. REKHA JHUNJHUNWALA 4 FOLLOWING THE ORDER OF THE TRIBUNAL , REVENUES APPEAL IN BOTH THE YEARS ARE DISMISSED. 8. WE FURTHER OBSERVE THAT THE TAX EFFECT IN THE APPEAL FOR THE A.Y.2007 - 08 IS BELOW RS.20 LAKHS, THEREFORE, IN VIEW OF THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018 , THE APPEAL DESERVES TO BE DISMISSED. 9 . IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 / 09 /201 8 SD/ - ( SANDEEP GOSAIN ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNT ANT MEMBER MUMBAI ; DATED 19 / 09 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//