NAVYUG KRISHI SADHAN P.LTD, MUMBAI V. ACIT 9(2), MUMBAI

ITA 3900/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3367 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B P PUROHIT
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.3900/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2009-10 M/S.NAVYUG KRISHI SADHAN PVT. LTD., PLOT NO.1, ADARSH HOUSING SOCIETY, CROSS ROAD NO.2, MALAD, MUMBAI 400 064. ! ! ! ! / VS. THE ACIT 9(2), AAYKAR BHAVAN, MK ROAD, MUMBAI - 400 020. # ./ $% ./ PAN/GIR NO. : AAACN 2326D ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: SHRI B.P.PUROHIT '(#& * ) / RESPONDENT BY : SHRI PARESH JOHRI ! * + / DATE OF HEARING : 01/07/2013 ,-' * + / DATE OF PRONOUNCEMENT : 01/07/2013 . / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER DATED 08/03/2012 PASSED BY LD. CIT(A)-20, MUMBAI FO R THE ASSESSMENT YEAR 2009-10. THE GROUNDS OF APPEAL READ AS UNDER: FOLLOWING GROUNDS OF APPEAL ARC SUBMITTED WITHO UT PREJUDICE TO ONE ANOTHER :- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) HAS ERRED IN SUSTAINING DISALLOWANCE / ADDITION U/S 14A R.W.R. 8D OF RS.239969/- WITHOUT APPRECIATING THAT NO SUCH DISALLOWANCE / AD DITION IS WARRANTED IN THE CASE . / ITA NO.3900/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2009-10 2 OF THE APPELLANT. THE DISALLOWANCE / ADDITION MADE BY THE AO MAY PLEASE BE QUASHED / DELETED. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) HAS ERRED IN SUSTAINING ADDITION / DISALLOWANCE OF RS.2 39969/- U/S 14A R.W.R. 8D WITHOUT SHOWING WHY THE AO IS NOT SATISFIED WITH TH E WORKING OF SUCH DISALLOWANCE SHOWN BY THE APPELLANT AND WITHOUT SHOWING ANY NEXU S BETWEEN THE EXPENSES DISALLOWED AND THE AMOUNT OF INVESTMENT. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) HAS ERRED IN SUSTAINING THE ACT OF THE AO OF ATTRIBUTIN G PART OF INTEREST OUTGOING TO TAX FREE INCOME AND DISALLOWING IT U/S 14A, AS NO INTER EST BEARING FUNDS ARE USED FOR EARNING TAX FREE INCOME. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) HAS ERRED IN SUSTAINING DISALLOWANCE OF RS.239969/- U/S 14A.. THE WORKING THE QUANTUM OF DISALLOWANCE IS NOT JUST, FAIR, REASONAB LE AND LAWFUL. IT MAY PLEASE BE DELETED. 5) YOUR APPELLANT THEREFORE HUMBLY PRAYS TO YOUR HO NOUR TO KINDLY QUASH THE APPELLATE/IMPUGNED ORDER ON THE POINT OF DISALLOWAN CE U/S 14A AND / OR DELETE THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD CIT(A). 6) YOUR APPELLANT FURTHER PRAYS THAT OTHER / FURTHE R RELIEVES AS MAY BE THOUGHT FIT TO MEET THE ENDS OF JUSTICE MAY KINDLY BE GRANTED TO Y OUR APPELLANT. 2. AT THE OUTSET IT WAS SUBMITTED BY LD. A.R THAT F OR ASSESSMENT YEAR 2008-09 SIMILAR ISSUE WAS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL AND THE MATTER WAS DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 13/4/2012 IN I TA NO. 3708/MUM/2011. LD. A.R HAS PLACED BEFORE US A COPY OF THE SAME AND A COPY WAS ALSO GIVEN TO LD. D.R. IT WAS SUBMITTED THAT SIMILAR ORDER MAY BE PASSED FOR THIS YEAR ALSO. LD. D.R DID NOT RAISE ANY OBJECTION. ACCORDINGLY, FOLLOWING THE AFOREMENTION ED ORDER OF THE TRIBUNAL, WE RESTORE THIS APPEAL ALSO TO THE FILE OF A.O WITH SIMILAR DI RECTIONS. FOR THE SAKE OF COMPLETENESS THE CONCLUDING PORTION OF THE AFOREMENTIONED ORDER OF THE TRIBUNAL IS REPRODUCED BELOW: 7. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND ALSO CONSIDERED THE ADDITIONAL GROUND RAISED BY THE APPELLANT. LOOKING TO THE FACT THAT .THE ADDITIONAL GROUND GOES TO THE VERY ROOT OF THE ISSUE OF DISALLOWANCE U)S. 14A READ WITH RULE 8D, WE ACCORDINGLY ADMIT THE SAME. HOWEVER, WE AGREE WITH THE CONTENTION OF THE LEARNED DR THAT THIS REQUIRES VERIFICATION OF FACTS BY THE ASSESSING OFFICER WHETHER THE APPELLANT HAD INTEREST FREE FUNDS OF ITS OWN TO MA KE THE INVESTMENTS OR NOT. OTHERWISE ALSO THE ASSESSING OFFICER HAS NOT CONSID ERED THE FUND FLOW STATEMENT AND HAS NOT EXAMINE THE INTEREST COMPONENT SO AS TO SEE WHETHER THE BORROWED FUNDS HAVE BEEN UTILISED FOR THE PURPOSE OF INVESTM ENT OR NOT, AS IT WILL HAVE DIRECT . / ITA NO.3900/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2009-10 3 NEXUS WITH THE DISALLOWANCE U/S. 14A READ WITH RUL E 8D. THE ENTIRE MATTER IS, THEREFORE, RESTORE BACK TO THE FILE OF THE ASSESSIN G OFFICER WHO WILL EXAMINE THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION THE AVAILABI LITY OF FUNDS, EXPENDITURE INCURRED AND THE GROUND RAISED IN THE ADDITIONAL GROUND. NEE DLESS TO SAY THAT THE ASSESSING OFFICER WILL GIVE DUE AND EFFECTIVE OPPORTUNITY TO THE APPELLANT TO MAKE ITS REPRESENTATION AND CALL FOR SUCH RECORDS AS MAY BE DEEM FIT FOR EXAMINING THIS ISSUE. 8. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT IS ALLOWED FOR STATISTICAL PURPOSES. 3. ACCORDINGLY, APPEAL FILED BY THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 01/07/2013 . * ,-' / 0!1 01/07/2013 - * 2 3 SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0! DATED 01/07/2013 . . . . * ** * '+45 '+45 '+45 '+45 65'+ 65'+ 65'+ 65'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+! , , / DR, ITAT, MUMBAI 6. 2 9 / GUARD FILE. .! .! .! .! / BY ORDER, (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ! . ./ VM , SR. PS