REDI PORT LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 3(3)(1), MUMBAI

ITA 4349/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9641 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 02-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAYANT JHAVERI LD
• Assessee Lawyers: GURMUKH SINGH H PURSWANILD
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

ITA NO.4349/MUM/2018 REDI PORT LIMITED ASSESSMENT YEAR: 2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.4349/MUM/2018 ( / ASSESSMENT YEAR : 2014-15 ) REDI PORT LIMITED 107, EARNEST HOUSE, 194 NARIMAN POINT, MUMBAI-400 021 / VS. D CIT - C ENTRAL CIRCLE - 3(3)(1) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI- 400 020. ! ./ ! ./PAN/GIR NO. AADCR-6980-N ( %& /APPELLANT ) : ( '(%& / RESPONDENT ) ASSESSEE BY : SHRI GURMUKH SINGH H.PURSWANI-LD. AR REVENUE BY : SHRI JAYANT JHAVERI -LD. DR / DATE OF HEARING : 08/07/2020 / DATE OF PRONOUNCEMENT : 08/07/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2014-15 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-8, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT-8/IT-347/16-17 DATED 17/04/2018 ON F OLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT ACCEPTING STAND OF ASSESSEE COMPANY THAT STRATEGIC INVESTMENT IN SISTER CONCERN BY BUYING ITS SHARES SHOULD NOT BE CONSIDER ED AS INVESTMENT INCOME ITA NO.4349/MUM/2018 REDI PORT LIMITED ASSESSMENT YEAR: 2014-15 2 FROM WHICH DOES NOT OR SHALL NOT FORM PART OF TOTAL INCOME FOR THE PURPOSE OF 14A DISALLOWANCE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT WAS NOT JUSTIFIED IN RELYING ON MAXOPP INVESTMENT LTD 91 TAXMANN.COM 154 AS THE FACTS OF THE SAID CASE ARE ENTIRELY DIFFERENT ARE DISTINGUISHABL E FROM THE FACTS OF THE APPELLANTS CASE. THE LD. CIT(A) OUGHT TO HAVE GIVE N CLEAR FINDING RATHER THAN RESTORING THE MATER BACK TO ASSESSING OFFICERS FIL E AND DIRECTING HIM TO RECOMPUTE 14A DISALLOWANCE. AS EVIDENT, THE SOLE SUBJECT MATTER OF APPEAL IS DI SALLOWANCE U/S 14A. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS MADE BY BOTH THE REPRESENTATIVES DURING HEARING ON 04/02/2020. THE L D. DR SUBMITTED THAT THE ISSUE HAS MERELY BEEN RESTORED BACK TO THE FILE OF LD. AO AND THEREFORE, THERE WOULD BE NO OCCASION FOR THE ASSES SEE TO BE AGGRIEVED. OUR ADJUDICATION TO THE APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 2. THE MATERIAL ON RECORD WOULD SHOW THAT IN AN ASS ESSMENT FRAMED U/S 143(3) ON 30/11/2016, THE ASSESSEE HAS BEEN SAD DLED WITH DISALLOWANCE U/S 14A FOR RS.42.04 LACS WHICH IS NOT HING BUT INDIRECT EXPENSE DISALLOWANCE U/R 8D(2)(III) WHICH IS COMPUT ED @0.5% OF AVERAGE INVESTMENTS. THE PLEA THAT NO EXEMPT INCOME WAS EARNED BY THE ASSESSEE COULD NOT FIND FAVOR WITH LD. AO. 3. UPON FURTHER APPEAL, LD. CIT(A), RELYING UPON LA TEST DECISION OF HONBLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LTD. VS. CIT [2018] 402 ITR 640 (SC) DIRECTED LD. AO TO REVISIT THE ENTIRE ISSUE OF APPLICABILITY OF SECTION 14A BY OBSERVING AS UNDER: - IN VIEW OF THE JUDGEMENT OF THE HONBLE SUPREME CO URT OF INDIA IN MAXOPP INVESTMENT LTD, AS REFERRED TO ABOVE, THE ASSESSING OFFICER IS DIRECTED TO REVISIT THE ENTIRE ISSUE OF APPLICABILITY OF SECTION 14A IN THI S CASE AND RECOMPUTE THE DISALLOWANCE, IF ANY. THIS GROUND OF APPEAL IS TECH NICALLY PARTLY ALLOWED. ITA NO.4349/MUM/2018 REDI PORT LIMITED ASSESSMENT YEAR: 2014-15 3 AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT IS QUITE EVIDENT FROM THE DIRECTIONS OF LEARN ED CIT(A) THAT THE ENTIRE ISSUE OF APPLICABILITY OF SECTION 14A HAS AL READY BEEN RESTORED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER F OR RE-ADJUDICATION IN TERMS OF CITED DECISION OF HONBLE SUPREME COURT. T HEREFORE, THERE WOULD BE NO OCCASION FOR THE ASSESSEE TO BE AGGRIEV ED AND NO RELIEF COULD BE GRANTED TO THE ASSESSEE AT THIS STAGE. NEE DLESS TO ADD THAT THE ASSESSEE IS FREE TO AGITATE THE ISSUE OF DISALLOWAN CE U/S 14A BEFORE LEARNED ASSESSING OFFICER, IN ANY MANNER. 5. THE ASSESSEES APPEAL STAND DISMISSED. ORDER PRONOUNCED ON 08 TH JULY, 2020. SD/- SD/- /- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 08/07/2020 SR.PS, SUDIP SARKAR $%&'(' / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT 3. / ( ) / THE CIT(A) 4. / / CIT CONCERNED 5. 01'*2 , 2 , / DR, ITAT, MUMBAI 6. 1345 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.