SHAPOORJI PALLONJI INFRASTRUCTURE CAPITAL COMPANY LIMITED, MUMBAI V. ACIT, RANGE 3 (3), MUMBAI

ITA 406/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0736 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 10-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO . 40 6 / MUM/20 1 4 ( / ASSESSMENT YEAR : 20 10 - 1 1 ) SHAPOORJI PALLONJI INFRASTRUCTURE CAPITAL COMPANY LIMITED, SHAPOORJI PALLONJI CENTRE, 41/44, MINOO DESAI MARG, COLABA, MUMBAI - 400005 VS. ACIT, RANGE - 3(3), MUMBAI ./ ./ PAN/G IR NO. : A A BCS 4370 B ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI PORUS KAKA & SHRI DIVESH CHAWLA /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 24 /0 6 / 2015 / DATE OF PRONOUNCEMENT 10/07 /2015 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 7 , MUMBAI , DATED 2 - 10 - 2013 FOR THE ASSESSMENT YEAR 20 10 - 1 1 IN THE MATTER OF ORD ER PASSED U/S.14 3 (3) OF THE I.T.ACT . 2 . THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF RS. 46.68 LAKHS CONFIRMED BY CIT(A) UNDER RULE 8D (2) (III) ON ACCOUNT OF ADMINISTRATIVE EXPENSES BY TAKING 0.5% OF AVERAGE VALUE OF INVESTMENT. ITA NO. 40 6 /1 4 2 3. AT THE OUTS ET, LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL IN ASSESSEES IN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2009 - 2010 , DATED 27 - 3 - 2015, WHEREIN THE TRIBUNAL HAS UPHELD THE ADDITION OF RS. 6 .50 LAKHS UNDER RULE 8D (2) (III) CONSIDERING THE FACT THAT MAJOR INVESTMENT WAS MADE IN THE GROUP CONCERNS ONLY, WHICH DO NOT REQUIRE ANY EXTRA EFFORTS ON ACCOUNT OF ADMINISTRATIVE EXPENSES. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER : - 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ASSESSEE ITSELF HAS MADE A SUO MOTU DISALLOWANCE OF RS. 1 LAKH UNDER RULE 8D(2)(III), HOWEVER, THE AO HAS COMPUTED DISALLOWANCE UNDER RULE 8D(2)(III) AT RS.2,14,85,474/ - . THE ASSESSEE COMPA NY IS BASICALLY ENGAGED IN THE CONSTRUCTION ACTIVITY HAVING TOTAL RECEIPTS OF RS.3229.76 CRORES OUT OF WHICH DIVIDEND INCOME IS ONLY RS.9.68 CRORES, WHICH WORKS OUT TO BE 0.309% OF THE TOTAL RECEIPTS. WE FOUND THAT OUT OF TOTAL DIVIDEND INCOME OF RS.9.86 C RORES, THE ASSESSEE RECEIVED DIVIDEND INCOME OF RS.8 CRORES FROM THE GROUP CONCERN ONLY WHICH DO NOT REQUIRE ANY EXTRA EFFORTS ON ACCOUNT OF ADMINISTRATIVE EXPENSES ETC. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR UPHOLDING THE DIS ALLOWANCE OF RS.10 LAKHS UNDER RULE 8D(2)(III) WHICH WAS CLAIMED BY THE ASSESSEE AT RS.1 LAKH. 9. THE FACTS AND CIRCUMSTANCES IN ITA NO.207/MUM/2013, WHICH HAS BEEN FILED BY ANOTHER GROUP COMPANY, ARE EXACTLY SAME, WHEREIN THE CIT(A) HAS RESTRICTED THE DI SALLOWANCE TO RS.6,50,000/ - AGAINST THE DISALLOWANCE WORKS OUT BY THE ASSESSEE AT RS.2,50,000/ - . THE RELEVANT FINDING OF CIT(A) ARE PARA 4.4, WHICH HAS NOT BEEN CONTROVERTED BY LD. DR BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT FIN D ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 4. ASSESSEES CASE HAS BEEN DISCUSSED BY THE TRIBUNAL IN PARA 9 (ITA NO.207/MUM/2013), WHEREIN DISALLOWANCE UNDER RULE 8D(2)(III) HAS BEEN CONFIRMED TO THE EXTENT OF RS. 6,50,000/ - . AS THE FACTS AND CIRCU MSTANCES OF THE CASE DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2009 - 2010, WE RESTRICT THE DISALLOWANCE TO THE TUNE OF RS. 6 .50 LAKHS UN DER RULE 8D (2) (III) ON ACCOUNT ITA NO. 40 6 /1 4 3 OF ADMINISTRATIVE EXPENSES AS AGAINST DISALLOWANCE OF RS.2.50 LAKHS OFFERED BY THE ASSESSEE. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 10/07 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 10/07 /201 5 . . /PKM , . / 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//