DCIT CEN CIR 4(1), MUMBAI V. GODAWARI CORPORATION LTD, MUMBAI

ITA 4397/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7220 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 1998-1999
• Appeal Filed On: 24-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER ITA.NO. 4397 /MUM/201 6 (A.Y : 1998 - 99 ) DY. C.I.T 23 O/O DY. C.I.T CENTRAL CIRCLE 4(1) R.NO . 19 1 6, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 V. M/S. GODAVARI CORPORATION LTD., INDUSTRY HOUSE, 159, BACKBAY RECLA MATION, CHURCH GATE, MUMBAI 400 020 PAN NO: AAACG 1850 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ARATI VISSANJI REVENUE BY : SHRI M.C. OMI NINGSHEN DATE OF HEARING : 26.02.2018 DATE OF PRONOUNCEMENT : 23. 04.2018 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) 2 MUMBAI DATED 01.03.2016 FOR THE ASSESSMENT YEAR 1998 99. 2. THE ONLY ISSUE IN THE APPEAL OF THE REVENUE IS AGAINST ESTIMATION OF DISALLOWANCE UNDER SECTION 14A AT 2% OF THE EXEMPT INCOME BY THE LD.CIT(A) . 2 ITA.NO. 4397/MUM/2016 (A.Y:1998 - 99) M/S. GODAVARI CORPORATION LTD . 3. THE ASSESSING OFFICER W HILE GIVING EFFECT TO THE ORDER PASSED BY THE TRIBUNAL U/S. 143 (3) R.W.S. 254 OF THE ACT COMPUTED THE DISALLOWANCE UNDER RULE 8 D ( 2) R.W.S. 14A OF THE ACT AT .52, 55, 534/ - . 4. ON APPEAL THE LD.CIT(A) IN VIEW OF THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. GODREJ BOYCE MFG. CO. LTD. V. DCIT [328 ITR 81] HELD THAT PROVISIONS OF RULE 8D HAVE NO APPLICATION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WHICH IS A.Y. 1998 - 99 AS THE HON'BLE HIGH COURT HELD THAT PROVISIONS OF RULE 8D ARE PROSPECTIVE AND ARE APPLICABLE FOR THE ASSESSMENT YEAR 2008 - 09 ONW ARDS. HAVING SAID THAT , THE LD.CIT(A) FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. M/S. GODREJ AGROVET LTD. IN I TA.NO. 934 OF 2011 DATED 08.01.2013 DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE AT 2% OF THE EXEMPT INCOME. 5. BEFORE US, LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE RE LIED ON THE ORDERS OF THE HON'BLE JURISDICTIONAL HIGH COURT AND SUBMITTED THAT IN THE ABSENCE OF RULE 8D THE DISALLOWANCE COMPUTED AT 2% IS REASONABLE AND THIS WAS AFFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT. 3 ITA.NO. 4397/MUM/2016 (A.Y:1998 - 99) M/S. GODAVARI CORPORATION LTD . 6. ON HEARING THE BOTH THE SIDES AND ON PERUSING THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT. WE DO NOT FIND ANY VALID REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A) IN ESTIMATING THE DISALLOWANCE UNDER SE CTION 14A FOR THE ASSESSMENT YEAR 1998 - 99 AT 2% OF THE DIVIDEND INCOME RECEIVED BY THE ASSESSEE W HICH IN OUR VIEW IS REASONABLE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD APRIL , 2018 . SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 23 / 04 / 2017 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM