ASST CIT 11(3), MUMBAI V. NAVROZ HORMASJI SEERVAI, MUMBAI

ITA 4129/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83689 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Depreciation; Earning of tax free income
• Section: 143(3)

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI R.C. SHARMA, AM AND AMIT SHUKLA, J.M. ./ I.T.A. NO.4129 /MUM/2013 ( / ASSESSMENT YEAR : 2009-2010 ACIT 11( 3 ), ROOM NO. 446, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. / VS. NAVROZ HORMASJI SEERVAI, 8, SHIV SHANTI BHUVAN, 148, MAHARSHI KARVE MARG, CHURCHGATE, MUMBAI 400 020. ./ PAN : ABKPS 4285 N ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI VIVEK BATRA R E SPONDENT BY : SHRI NITESH JOSHI / DATE OF HEARING : 03-09-2014 / DATE OF PRONOUNCEMENT : 03-09-2014 [ !' / O R D E R PER R.C. SHARMA, A.M . : THIS IS AN APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) -2, MUMBAI DATED 22-03-2013 FOR THE A.Y. 2009-10 IN THE MATTER OF ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 . 2. THE ONLY GRIEVANCE RAISED BY THE REVENUE RELATE S TO THE DELETION OF ADDITION OF RS. 9,39,852/- MADE BY THE A.O. U/S 14- A OF THE INCOME TAX ACT, 1961. ITA 4129/M/13 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED TH E RECORDS AVAILABLE ON RECORD. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN ADVOCATE FILED HIS RETURN OF INCOME AT RS. 3.04 CRORES. IN THE ASSESSMENT FRAME D U/S 143(3) OF THE ACT, THE A.O. DISALLOWED AN AMOUNT OF RS. 9,39,852/- BY INVOKING THE PROVISIONS OF SECTION 14-A READ WITH RULE 8-D OF THE INCOME TAX R ULES, 1962. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED TH E ADDITION BY OBSERVING AS UNDER:- I HAVE GONE THROUGH THE ISSUE. IT IS SEEN THAT THE APPELLANT IS MANAGING HIS INVESTMENTS BY AVAILING PROFESSIONAL M ANAGEMENT SERVICES AND THE EXPENSES INVOLVED WAS NOT CLAIMED AS DEDUCTION FOR INCOME-TAX PURPOSE. FURTHER, THE APPELLANT HAS DIS ALLOWED THE EXPENSES LIKE CAR, TELEPHONE, ELECTRICITY EXPENSES, CAR DEPRECIATION ETC. FOR PERSONAL USE. CONSIDERING ALL THESE ASPECTS, I AM OF THE VIEW THAT NO FURTHER DISALLOWANCE SHOULD BE MADE WITH REGARD TO THE EXPENSES CONNECTED WITH THE EARNING OF TAX FREE INCOME. THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 9,39,852/-. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND FOUND FROM THE RECO RDS THAT ASSESSEES FUNDS WERE MANAGED BY PROFESSIONAL MANAGER AND PROFESSION AL MANAGEMENT FEES PAID OF RS. 6,78,451/- WAS NOT CLAIMED AS EXPENDITU RE FOR INCOME TAX PURPOSES AND THE SAME WAS DEBITED TO THE PERSONAL C APITAL ACCOUNT. SIMILARLY, STT OF RS. 46,462/- WAS ALSO DEBITED TO THE PERSONAL CAPITAL ACCOUNT AND THE SAME WAS NOT CLAIMED AS EXPENDITURE FOR INCOME TAX PURPOSES. DEMAT CHARGES WERE ALSO NOT CLAIMED AS E XPENDITURE. IN ADDITION TO THIS, THE ASSESSEE HIMSELF HAS DISALLOWED 1/5 TH OF THE MOTOR CAR EXPENSES AND TELEPHONE EXPENSES OF RS. 9352/- ON ACCOUNT OF PERSONAL USE. SINCE THE INDIRECT EXPENSES INCURRED BY THE ASSESSEE ON ACCOU NT OF PAYMENT MADE TO THE PROFESSIONAL MANAGER, WHO WAS MANAGING THE FUND S OF THE ASSESSEE, WAS NOT CLAIMED AS EXPENDITURE, THERE IS NO REASON FOR DISALLOWANCE OF EXPENDITURE BY INVOKING THE RULE 8-D OF THE INCOME TAX RULES, 1 962. FURTHER, THE FINDINGS RECORDED BY THE LD. CIT(A) AT PARA NO. 3.5 HAS NOT BEEN CONTROVERTED, WE DO ITA 4129/M/13 3 NOT FIND ANY REASON OR INFIRMITY IN THE ORDER OF TH E LD. CIT(A) DELETING THE DISALLOWANCE MADE BY THE A.O. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD SEPTEMBER, 2014. !' # $% &! ' 03-09-2014 ( ) SD/ - SD/- (AMIT SHUKLA) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 03-09-2014 [ .6../ RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT(A) 2,, MUMBAI 4. 7 / CIT 11, MUMBAI 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI B BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI