NATIONAL BANK FOR AGRICULTURE AD RURAL DEVELOPMENT, MUMBAI V. ADDL CIT RG 3(2), MUMBAI

ITA 4077/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75209 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 14A

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI .. , , BEFORE SHRI P.M. JAGTAP, AM AND SHRI AMIT SHUKLA, J M ./ I.T.A. NO.4077 /MUM/2012 ( / ASSESSMENT YEAR : 2007-2008 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT, C-24, G BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. / VS. THE ADDL. COMM.OF INCOME TAX RANGE 3(2), AAYAKAR BHAVAN, MAHARSHI KARVE MARG, MUMBAI -400 020. . / PAN : AAACT 4020 G ( # / APPELLANT ) .. ( $%# / RESPONDENT ) APPELLANT BY SHRI K.K. VED RESPONDENT B Y : SHRI PREETAM SINGH ) * / DATE OF HEARING :06-01-2013 ) * / DATE OF PRONOUNCEMENT : 10-01-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DTD. 2.3.2012 PASSED BY THE LD. CIT(A) 49, MUMBAI AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE OF RS. 8,16,42,751/- MADE BY THE A.O. AND CONFIRMED BY THE LD.CIT(A) U/S 14A READ WI TH RULE 8-D OF THE INCOME TAX RULES, 1962. 2. THE ASSESSEE IN THE PRESENT CASE IS ENGAGED IN T HE BUSINESS OF RURAL INFRASTRUCTURE DEVELOPMENT AND INSTITUTIONAL DEVELO PMENT OF THE CO-OPERATIVE ITA 4077/M/12 2 BANKS AND RRBS. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS MADE INVE STMENT IN EQUITY SHARES OF NABARD, THE DIVIDEND INCOME ON THE SAID SHARES BEIN G EXEMPT FROM TAX. HE, THEREFORE, APPLIED RULE 8-D OF THE INCOME TAX RULES , 1962 TO WORK OUT THE INTEREST AND OTHER EXPENSES ATTRIBUTABLE TO THE INV ESTMENT MADE IN SHARES WHICH WERE LIABLE TO BE DISALLOWED U/S 14A OF THE A CT. THE ASSESSEE HAD ALREADY OFFERED A DISALLOWANCE OF RS. 13,47,00,257/ - U/S 14A OF THE ACT WHEREAS THE A.O. WORKED OUT A DISALLOWANCE OF RS. 2 1,63,42,998/- AND THEREFORE HE MADE A FURTHER DISALLOWANCE OF RS. 8,1 6,42,751/- U/S 14A OF THE ACT. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID DISALLOWANCE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS HELD BY T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. VS. DCIT (2010) 328 ITR 81 (BOM.), RULE 8-D IS APPLICABLE ONLY PROSPECTIVEL Y I.E. FROM A.Y. 2008-09. AS FURTHER HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE SAID CASE, THE DISALLOWANCE U/S 14A OF THE ACT FOR THE YEARS PRIOR TO A.Y. 2008-09 IS REQUIRED TO BE MADE ON SOME REASONABLE BASIS. KEEPING IN VI EW THE SAID DECISION OF THE HONBLE BOMBAY HIGH COURT, WE RESTORE THIS ISSU E TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH BY COMPUTING THE DISAL LOWANCE TO BE MADE U/S 14 OF THE ACT ON SOME REASONABLE BASIS. ACCORDINGLY , THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTIC AL PURPOSE. ITA 4077/M/12 3 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JANUARY, 2014. . ) / 0 10-01-2014 ) SD/- SD/- (AMIT SHUKLA) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 0 DATED 1050152014 [ .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $%# / THE RESPONDENT. 3. () / THE CIT(A)4, MUMBAI. 4. / CIT 3, MUMBAI 5. : $< , * < , / DR, ITAT, MUMBAI B BENCH 6. ? / GUARD FILE. / BY ORDER, %: $ //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI