RAYMOND APPAREL LIMITED, MUMBAI V. ACIT 2(3), MUMBAI

ITA 413/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3022 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KASHYAB
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.413/MUM/2014 ( / ASSESSMENT YEAR:2007-08 M/S. RAYMOND APPAREL LTD., NEW HIND HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI-400 001 / VS. THE ACIT-2(3), AAYAKAR BHAVAN, MUMBAI-400 020 ./ ./ PAN/GIR NO. : AAACJ 2732K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI NITESH JOSHI / RESPONDENT BY: SHRI SANJEEV KASHYAB / DATE OF HEARING :19.10.2015 ! / DATE OF PRONOUNCEMENT :19.10.2015 '# / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-6, MUMBAI DATED 23.10.2013 PERTAINI NG TO ASSESSMENT YEAR 2007-08. 2. THE GRIEVANCE OF THE ASSESSEE REVOLVES AROUND TH E DISALLOWANCE MADE U/S. 14A OF THE ACT R.W. RULE 8D. 3. WHILE SCRUTINIZING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS ITA. NO.413/M/2014 2 SHOWN CERTAIN INCOME WHICH ARE EXEMPT FROM TAX. IN VOKING THE PROVISIONS OF SEC. 14A R.W. RULE 8D, THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE AT RS. 24,58,000/- 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN C ASE FOR A.Y. 2008- 09 IN ITA NOS. 255 & 720/M/2012. IT IS THE SAY OF THE LD. COUNSEL THAT THE TRIBUNAL HAS CONSIDERED THE CLAIM OF THE A SSESSEE AND HAS ACCEPTED THAT THE INVESTMENTS WERE OF STRATEGIC IN NATURE. IT IS THE SAY OF THE LD. COUNSEL THAT THIS DECISION OF THE TR IBUNAL GIVEN FOR A.Y. 2008-09 WAS FOLLOWED BY THE TRIBUNAL IN A.Y 2009-10 IN ITA NO. 7530/M/2012. THE LD. COUNSEL CONCLUDED BY STATING THAT A SIMILAR VIEW SHOULD BE FOLLOWED FOR THE YEAR UNDER CONSIDER ATION ALSO. 6. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCE DED TO THIS. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE AS REFERRED TO HEREINABOVE. WE FIND FORCE IN THE CONTENTION OF TH E LD. COUNSEL. WE FIND THAT IN A.Y. 2007-08, THE TRIBUNAL HAS RESTRIC TED DISALLOWANCE BY APPLYING PRINCIPLE OF LAW LAID DOWN IN THE CASES OF GARWARE WALL ROPES IN ITA NO. 5408/M/2012 DATED 15.1.2014 AND J. M. FINANCIAL LTD IN ITA NO. 4521/M/2012 ORDER DATED 26.3.2014 TO THE EFFECT THAT INVESTMENTS MADE FOR STRATEGIC INVESTMENT SHOULD BE EXCLUDED WHILE COMPUTING AVERAGE INVESTMENT. THIS DECISION OF THE TRIBUNAL FOR A.Y. 2008-09 WAS FOLLOWED BY THE TRIBUNAL IN A.Y. 2009-1 0. RESPECTFULLY FOLLOWING THE DECISIONS OF THE CO-ORDINATE BENCH IN ASSESSEES OWN ITA. NO.413/M/2014 3 CASE, WE RESTORE THE MATTER TO THE FILE OF THE AO W ITH A DIRECTION TO RECOMPUTE THE DISALLOWANCE U/S. 14A BY EXCLUDING ST RATEGIC INVESTMENTS MADE BY THE ASSESSEE WHILE COMPUTING AV ERAGE INVESTMENT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2015 SD/- SD/- (AMARJIT SINGH ) (N.K. BILLAIYA) $% ' /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER & ' MUMBAI; (' DATED : 19 TH OCTOBER, 2015 . % . ./ RJ , SR. PS !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -.! , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. $ / BY ORDER, * % //TRUE COPY// % / $& ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI