ARIANE ORGACHEM P. LTD, MUMBAI V. DCIT CEN CIR 23, MUMBAI

ITA 4106/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49073 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MOURYA
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA. NO. 4106/MUM/2010 ASSESSMENT YEAR 2007-2008 ARIANE ORGACHEM PVT. LTD. MUMBAI-400 071 PAN AAACA4729J VS. DCIT, C.C. 23 MUMBAI. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI RAKESH JOSHI FOR RESPONDENT : SHRI P.C. MOURYA ORDER PER D. MANMOHAN, V.P. 1. THE ONLY GROUND URGED IN THE APPEAL FILED BY TH E ASSESSEE READS AS UNDER : THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLO WANCE OF RS.4,34,702/- MADE U/S. 14A OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E. 2. ADMITTEDLY, ASSESSING OFFICER INVOKED THE PROVI SIONS OF SECTION 14A OF THE I.T. ACT READ WITH RULE 8D TO DI SALLOW A PORTION OF THE EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT I NCOME I.E., DIVIDEND INCOME. LEARNED CIT(A) CONFIRMED THE ORDER OF THE A SSESSING OFFICER IN THE LIGHT OF DECISION OF THE ITAT, SPECIAL BENCH, M UMBAI IN THE CASE OF ITO, MUMBAI VS. M/S. DAGA CAPITAL MANAGEMENT LTD. ( 2009) 117 ITD 169 (S.B.) (MUM.) 3. FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING BOTH THE PARTIES ADMITTED THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE IN THE LIGHT OF DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT AND ANOTHER (2010) 328 ITR 81 (BOM.) WHEREIN THE HONBLE COURT OBSERVED THAT RULE 8D CAN NOT BE APPLIED 2 RETROSPECTIVELY AND HENCE COMPUTATION OF DISALLOWAN CE HAS TO BE MADE ON REASONABLE BASIS, WITHOUT GOING BY THE PROCEDURE PRESCRIBED UNDER RULE 8D. UNDER THESE CIRCUMSTANCES, WE SET ASIDE TH E ORDER OF THE TAX AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO RE- COMPUTE THE CLAIM OF DISALLOWANCE IN ACCORDANCE WITH LAW. NEEDLESS TO OB SERVE THAT ASSESSEE IS FREE TO FILE RELEVANT MATERIAL IN SUPPO RT OF HIS CONTENTION AS TO WHAT SHOULD BE THE REASONABLE DISALLOWANCE UNDER SECTION 14A OF THE ACT. WITH THESE OBSERVATIONS, AS PRONOUNCED IN THE OPEN COURT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (J.SUDHAKAR REDDY) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 16 TH JUNE, 2011 VBP/- COPY TO 1. ARIANE ORGACHEM PVT. LTD., RUNWAL CHAMBERS, 1STR OAD, 3 RD FLOOR, CHEMBUR, MUMBAI-400 071 PAN AAACA4729J 2. DCIT, CENTRAL CIRCLE 23, MUMBAI 3. CIT(A)-40, MUMBAI 4. CIT, CENTRAL-II, MUMBAI 5. DR A BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.