M/s. Nucleus Software Exports Ltd., New Delhi V. Additional Commisioner of Income Tax, New Delhi

ITA 3870/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0008 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G . BANSAL, ACCOUNTANT MEMBER I.T.A. NO.3870 /DEL/2010 ASSESSMENT YEAR : 2006-07 M/S NUCLEUS SOFTWARE EXPORTS VS. ADDL. CIT, LTD., 33-35, THYAGRAJ NAGAR RANGE-13, MARKET, NEW DELHI NEW DELHI PAN NO.AAACN5382P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD GUPTA, FCA RESPONDENT BY : SHRI ASHOK PANDEY, CIT-DR ORDER PER K.G. BANSAL, AM: THE ASSESSEE HAS TAKEN UP TWO GROUNDS IN THE APPEAL TO TH E EFFECT THAT THE LEARNED CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF `2 6,76,963/-, MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS CONTAINED IN SECTION 14A OF THE ACT AND RULE 8D OF THE I.T. RULES, 1962 (THE RULES). 2. IT IS THE COMMON CASE OF BOTH THE PARTIES THAT THE D ECISION OF SPECIAL BENCH OF MUMBAI TRIBUNAL IN THE CASE OF DAGA CAPITAL MANAGEMENT (P) LIMITED (2009) 117 ITD (AT) 169 IS NO LONGER A GOOD LAW IN VIEW OF THE DE CISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MANUFACTURI NG COMPANY LIMITED VS. DCIT, (2010) 194 TAXMAN 203. IN THIS CASE, IT HAS B EEN HELD BY THE HONBLE HIGH COURT THAT THE PROVISIONS CONTAINED IN SECTION 14A AND RULE 8D ARE NOT ULTRA VIRUS. IT HAS BEEN FURTHER HELD THAT THE PROVISION CONTAINED IN RU LE 8D IS APPLICABLE TO THE PROCEEDINGS OF ASSESSMENT YEAR 2008-09 AND ONWARD. IT IS ALSO HELD THAT PRIOR TO 2 THIS YEAR, THE ASSESSING OFFICER CAN MAKE INQUIRY REGARDI NG THE EXPENDITURE INCURRED FOR EARNING THE INCOME WHICH IS NOT TO BE INCLUDED IN TH E TOTAL INCOME OF THE ASSESSEE. ON THE BASIS OF SUCH INQUIRY, HE MAY MAKE DISA LLOWANCE OF A REASONABLE AMOUNT, DEPENDING THE FACTS OF THE CASE. THE EXERCISE AS P ER THE RATIO OF THIS CASE HAS NOT BEEN CARRIED OUT BY THE LOWER AUTHORITIES. THEREFO RE, THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE MATTER O F THE DISALLOWANCE OR OTHERWISE AS PER AFORESAID DECISION. IN CASE THE DECISION OF ANY OTHER HIGH COURT INCLUDING THE TERRITORIAL HIGH COURT IS RECEIVED TILL FI NALIZATION OF THE ASSESSMENT PURSUANT TO THIS ORDER, THE SAME SHALL ALSO BE CONSIDERED BY THE ASSESSING OFFICER. 3. IN RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATI STICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.03.2011. SD/- SD/- ( I.P. BANSAL ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTA NT MEMBER NS DT.31.03.2011. COPY FORWARDED TO:- 1. M/S NUCLEUS SOFTWARE EXPORTS LIMITED, 33-35, THYAGRAJ N AGAR MARKET, NEW DELHI. 2. ADDL. CIT, RANGE-13, NEW DELHI. 3. THE RESPONDENT 4. THE CIT 5. THE CIT (A)-, NEW DELHI. 6. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER 3 (ITAT, NEW DELHI).