VIDITI INVESTMENT P.LTD, MUMBAI V. DCIT CIR 8(3), MUMBAI

ITA 4277/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 16-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N V NADKAR
• Keywords: Rule of consistency; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER / I .T A NO. 4277/MUM/2014 ( / ASSESSMENT YEAR : 2011 - 12 M/S. VIDITI INVESTMENT PVT. LTD., FP - 145 RAM MANDIR ROAD, VILE PARLE (E), MUMBAI - 400 057 / VS. THE DCIT, CIRCLE - 8(3), MUMBAI ./ ./ PAN/GIR NO. AAACV 1332P ( / APPELLANT ) .. ( / RESPONDENT ) / A PPELLANT BY: SHRI ANUJ KISNADWALA / RESPONDENT BY: MS. N.V. NADKAR / DATE OF HEARING : 17 .1 2 . 2015 / DATE OF PRONOUNCEMENT : 17 .1 2 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 18 , MUMBAI DATED 15.5.2014 PERTAINING TO ASSESSMENT YEAR 2011 - 12 . 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE MADE U/S. 14A OF THE ACT. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE INVESTMENTS IN ITA. NO. 4277/M/2014 2 EXEMPT INCOME YIELDING ASSETS AMOUN TING TO RS. 126.69 CRORES ON WHICH IT HAS EARNED DIVIDEND OF RS. 29.5 CRORES WHICH HAS BEEN CLAIMED AS EXEMPT. THE AO FURTHER FOUND THAT THE ASSESSEE HAS SUO MOTO MADE DISALLOWANCE OF RS. 47,445/ - . NOT CONVINCED BY THIS, THE AO PROCEEDED BY INVOKING THE PROVISIONS OF SEC. 14A R.W. RULE 8D AND COMPUTED THE DISALLOWANCE AT RS. 34,83,097/ - . 4. AGGRIEVED BY WHICH, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTIO N TO THE COMPUTATION OF INCOME AND POINTED OUT THE SUO MOTO DISALLOWANCE OF RS. 47,445/ - . THE LD. COUNSEL FURTHER DREW OUR ATTENTION TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR AND POINTED OUT THAT THE INCOME IS FROM PMS ON WHICH THE ASSESSEE HAS CLAIMED EXPENSES AMOUNTING TO RS. 98,85,129/ - AND OTHER EXPENSES OF RS. 47,4 4 5/ - HAVE BEEN DISALLOWED. THE LD. COUNSEL FURTHER DREW OUR ATTENTION TO SCHEDULE - L RELATING TO OTHER EXPENSES. IT IS THE SAY OF THE LD. COUNSEL THAT ON IDENTICAL METHODOLOGY, THE REVENUE HAS ACCEPTED THE DISALLOWANCE OF OTHER EXPENSES ONLY MADE BY THE A SSESSEE OF A.Y. 2008 - 09, 2009 - 10 AND 2010 - 11. NECESSARY DOCUMENTARY EVIDENCES HAVE BEEN PLACED ON RECORD. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING FACT IN FAVOUR OF THE REVENUE. 7. WE HAVE GIVEN A THOUGHTFU L CONSIDERATION TO THE SUBMISSIONS MADE BY THE LD. COUNSEL AND WITH THE ASSISTANCE OF THE LD. COUNSEL, WE HAVE GONE THROUGH THE RELATED DOCUMENTARY EVIDENCES PLACED BEFORE US. WE FIND THAT SIMILAR DISALLOWANCE WAS MADE BY THE ITA. NO. 4277/M/2014 3 ASSESSEE IN A.Y. 2010 - 11 WHIC H HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT MADE U/S. 143(3) OF THE ACT VIDE ORDER DATED 8.3.2013. SIMILARLY, IN A.Y. 2008 - 09 VIDE LETTER DATED 29.10.2010 MADE U/S. 143(3) OF THE ACT. THE AO AT PARA - 4.4. OF HIS ORDER HAS RESTRICTED THE DISALLOWANCE U/S. 14A R.W. RULE 8D TO THE AMOUNT OF OTHER EXPENDITURE. A SIMILAR VIEW WAS TAKEN BY THE AO IN A.Y. 2009 - 10 ALSO VIDE ORDER DT. 30.9.2011 MADE U/S. 143(3) OF THE ACT. 8. IN OUR CONSIDERED OPINION FOR THREE CONSECUTIVE ASSESSMENT YEARS THE REVENUE HAS TA KEN A CONSISTENT VIEW IN SO FAR AS THE DISALLOWANCE MADE U/S. 14A IS CONCERNED, THE SAME VIEW SHOULD BE TAKEN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ALSO FOLLOWING THE RULE OF CONSISTENCY AS LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF RADH ASOAMI SATSANG VS CIT 193 ITR 321. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO RS. 47,445/ - . GROUND NO. 1 IS ACCORDINGLY ALLOWED. 9. SINCE WE HAVE ALLOWED GROUND NO. 1, OTHER GRIEVANCES OF TH E ASSESSEE BECOME OTIOSE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DECEMBER , 2015 . SD/ - SD/ - ( PAWAN SINGH ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 17 TH DECEMBER , 2015 . . ./ RJ , SR. PS ITA. NO. 4277/M/2014 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI