SHREENATH FINSTOCK P.LTD, MUMBAI V. DCIT RG 8(3), MUMBAI

ITA 46/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4222 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 03-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , . !' , # $ BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLA IYA, AM . / ITA NO.46/MUM/2012 % % % % / ASSESSMENT YEAR 2008-09 SHREENATH FINSTOCK PRIVATE LIMITED, A-120, GOKUL ARCADE, SAHAR ROAD, VILE PARLE (E), MUMBAI - 400 057. / VS. THE DCIT , RANGE 8(3), MUMBAI. & # ./ '( ./ PAN/GIR NO. : AABCS 6025R ( &) / APPELLANT ) .. ( *+&) / RESPONDENT ) &) , / APPELLANT BY: NONE *+&) - , / RESPONDENT BY : SHRI RAJENDRA KUMAR - .# / DATE OF HEARING : 10/07/2013 /0% - .# / DATE OF PRONOUNCEMENT : 10/07/2013 1 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-20 MUMBAI DATED 20/10/2011 FOR ASSESSMENT YEAR 2008- 09. GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED COMMISSIONER OF APPEALS HAS ERRED UPHOLDING RS.25,578/- DISALLOWANCE U/S. 14A READ WITH RULE 8D. 2. THE APPELLANT CRAVES TO ADD ALTER DELETE ANY OF THE GROUNDS OF THE APPEAL. 2. THE APPEAL WAS FIXED FOR HEARING ON 10/7/2012. HOWEVER, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE ON THE FIXED DAT E OF HEARING. AS THE APPEAL IS SMALL WE PROCEED TO DECIDE THE SAME ON MERITS. . / ITA NO.46/MUM/2012 % % % % / ASSESSMENT YEAR 2008-09 2 3. THE ASSESSEE IN THE PRESENT CASE IS ENGAGED IN T HE BUSINESS OF TRADING IN SHARES AND INVESTMENT IN SECURITIES. UPON NOTING T HE FACT THAT A DIVIDEND INCOME OF RS.29,245/- WAS SHOWN BY THE ASSESSEE WHICH WAS EXEMPT FROM TAX AO HAS INVOKED RULE 8D TO DISALLOW A SUM OF RS.28,578/- UN DER THE PROVISION TO SECTION 14A OF THE INCOME TAX ACT, 1961(THE ACT). THE DISA LLOWANCE HAS BEEN SUSTAINED BY LD. CIT(A). THE ASSESSEE IS AGGRIEVED, HENCE, H AS FILED THE AFOREMENTIONED APPEAL. 4. WE HAVE HEARD LD. DR, WHO RELIED UPON THE ORDER S PASSED BY AO AND LD. CIT(A). THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF TRADING IN SHARES AND INVESTMENT IN SECURITIES. SUCH FACT IS RECORDED IN THE ASSESSMENT ORDER ITSELF. RECENTLY, HONBLE KARNATAKA HIGH COURT IN THE CASE OF CCI LTD. VS. JCIT, 206 TAXMANN 563(KAR) HAS HELD THAT WHEN ASSESSEE HAS N OT RETAINED SHARES WITH THE INTENTION OF EARNING DIVIDEND INCOME AND THE DIVIDE ND INCOME IS INCIDENTAL TO HIS BUSINESS OF SALE OF SHARES, WHICH REMAIN UNSOLD BY THE ASSESSEE, IT CANNOT BE SAID THAT THE EXPENDITURE INCURRED IN ACQUIRING THE SHARES HAS TO BE APPORTIONED TO THE EXTENT OF DIVIDEND INCOME AND THAT SHOULD BE DISALLOWED FROM DEDUCTION. THIS ASPECT OF THE MATTER HAS NEITHER BEEN EXAMINED BY AO OR LD. CIT(A). THEREFORE, WE CONSIDER IT JUST AND PROPER TO RESTOR E THIS ISSUE TO THE FILE OF AO WITH A DIRECTION TO READJUDCIATE THE ISSUE AFTER GI VING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE ORDER ACCORDINGLY. 5. IN THE RESULT, FOR STATISTICAL PURPOSES THE APPE AL IS TREATED AS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 10/07/20 13 1 - /0% # 3 45 10/07/2013 0 - 6 7 SD/- SD/- ( !' / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 4 DATED 10/07/2013 . / ITA NO.46/MUM/2012 % % % % / ASSESSMENT YEAR 2008-09 3 1 1 1 1 - -- - *.89 *.89 *.89 *.89 :9%. :9%. :9%. :9%. / COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. 9<6 *. , , / DR, ITAT, MUMBAI 6. 6= > / GUARD FILE. 1 1 1 1 / BY ORDER, +9. *. //TRUE COPY// ? ?? ? / @ @ @ @ ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS