DINESH V. BAHIRWANI, MUMBAI V. ITO 24(1)(5), MUMBAI

ITA 466/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9746 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 20-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 466 /MUM/ 2017 (ASSESSMENT YEAR 20 12 - 13 ) MR. DINESH V. B A HIRWANI UNIT NO. 605, BUSINESS SUITES 9, PLOT NO. 83 S.V.ROAD, SANTACRUZ (W) MUMBAI - 400 054. VS. IT O 24(1)(5) MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . ABRPB3559K ASSESSEE BY SHRI SATYA PRAKASH SINGH DEPARTMENT BY SHRI S.K. BEPARI DATE OF HEARING 11.9. 201 7 DATE OF PRONOUNCEMENT 11 . 9 . 201 7 O R D E R THE APPEAL FILED BY THE ASSESS EE IS DIRECTED AGAINST THE ORDER DATED 7.10.2016 PASSED BY THE LEARNED CIT(A) - 39, MUMBAI AND IT RELATES TO A.Y. 2012 - 13. THE ASSESSEE IS AGGRIEVED BY THE DEC I SION RENDERED BY THE LEARNED CIT(A) ON FOLLOWING ISSUES : - (A) DISALLOWANCE OF COMMISSION EXPENSES : ` 6,750/ - (B) DISALLOWANCE MADE U/S.14A OF THE ACT : ` 6,67,723/ - (C) DISALLOWANCE OF INTEREST : ` 5,36,277/ - 2. I HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN FABRICS AND TEXTILE MATERIAL UNDER TWO BUSINESS ADDRESSES, NAMELY TR I NITY TRADING AND SATYA TEX. HE IS ALSO A PARTNER IN LLP NAMED M/S. TRINITY TRADE. 3. FIRST ISSUE RELATES TO DISALLOWANCE OF COMMISSION EXPENSES ` 6,750/ - . THE ASSESSING OFFICER DISALLOWED THE SAME ON THE REASONING THAT THE ASSESSEE MR. DINESH V. BAHIRWAN I 2 HAS FAILED TO SUBMIT THE DETAILS RELATING THERETO. THE LEARNED CIT(A) ALSO CONFIRMED THE SAME. 4. LEARNED AR SUBMITTED THAT THE IDENTICAL DISALLOWANCE WAS MADE IN A.Y. 2010 - 11 AND THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE OF THE A SSESSING OFFICER. LEARNED AR SUBMITTED THAT THE ASSESSEE BE GIVEN AN OPPORTUNITY TO PROVIDE NECESSARY DETAILS BEFORE THE ASSESSING OFFICER TO PROVE THE GENUINENESS OF COMMISSION EXPENSES . 5. I HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECO RD. I NOTICED THAT IDENTICAL ISSUE WAS CONSIDERED BY THE DIVISION BENCH IN ASSESSEES OWN CASE RELATING TO A.Y. 2010 - 11 IN ITA NO. 7471/MUM/2014 AND 7497/MUM/2014 AND THE ISSUE HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. CONSISTENT WITH TH E VIEW TAKEN THEREIN, I SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING IT AFRESH BY DULY CONSIDERING THE DETAILS AND EXPLANATION S THAT MAY BE FURNISHED BY THE ASSESSEE. 6. NEXT ISSUE RELATES TO DISALLOWANCE MADE U/S. 14A OF THE ACT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED A SUM OF ` 11,39,680/ - AS ITS SHARE OF PROFIT FROM M/S. TRINITY TRADE LLP AND CLAIMED THE SAME AS EXEMPT U/S. 10(2A) OF T HE ACT. THE ASSESSEE DID NOT MAKE ANY DISALLOWANCE U/S. 14A OF THE ACT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS TAKEN SECURED LOAN S AND UNSECURED LOAN S FROM VARIOUS PARTIES . H ENCE THE ASSESSING OFFICER TOOK THE VIEW THAT A PORTION OF INTEREST EXPENSES SHOULD BE DISALLOWED IN TERMS OF SEC. 14A OF THE ACT. ACCORDINGLY HE WORKED OUT THE DISALLOWAN CE AT ` 6,67,723/ - OUT OF INTEREST EXPENDITURE AND DISALLOWED THE SAME . THE LEARNED CIT(A) ALSO CONFIRMED THE SAME. 7. LEARNED AR SUBMITTED THAT THE CO MPUTATION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 14A OF THE ACT SUFFERS FROM COMPUTATIONAL ERROR AND HENCE THE SAME WOULD REQUIRE CORRECTIONS. THE LEARNED AR ALSO SUBMITTED THAT MR. DINESH V. BAHIRWAN I 3 THE MUMBAI BENCH OF THE TRIBUNAL HAS EXPRESSED THE VIEW IN THE CAS E OF HAMID A. MOOCHHALA (ITA NO. 2218/MUM/2010) THAT THE PROVISIONS OF SECTION 14A IS NOT APPLICABLE IN RESPECT OF SHARE INCOME RECEIVED FROM FIRM. ACCORDINGLY HE CONTENDED THAT NO DISALLOWANCE IS CALLED FOR AS PER THE PROVISIONS OF SEC. 14A OF THE ACT. 8 . I HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. I AM OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER IN VIEW OF THE SUBMISSIONS MADE BY LEARNED AR. ACCORDINGLY I SET ASIDE THE ORDER PASS ED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DULY CONSIDERING THE EXPLANATION S AND INFORMATION THAT MAY BE FURNISHED BY THE ASSESSING OFFICER AND ALSO BY CONSIDERING THE DECISION RELIED UPON BY THE ASSESSEE. ACCORDINGLY THE AO MAY TAKE APPROPRI A TE DECISION IN ACCORDANCE WITH THE LAW. 9. LAST ISSUE RELATES TO DISALLOWANCE OF ` 5,36,277/ - MADE OUT OF INTEREST EXPENDITURE. LEARNED AR SUBMITTED THAT THIS IS SUE IS CONNECTED WITH THE DISALLOWANCE MADE U/S. 14A OF THE ACT. HE SUBMITTED THAT THE ASSESSING OFFICER HAD ALREADY DISALLOWED A PART OF INTEREST EXPENDITURE AND HENCE HE WAS NOT RIGHT IN MAKING ADDITION U/S 36(1)(III) AGAIN. HE SUBMITTED THAT THE AO HAS MADE IDENTICAL DISALLOWANCE OUT OF INTEREST EXPENDITURE IN AY 2013 - 14 ONLY AS AN ALTERNATIVE ADDITION . IN VIEW OF THE SAID SUBMISSIONS, I AM OF THE VIEW THAT THIS ISSUE ALSO REQUIRES EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, I SET ASID E THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING IT AFRESH. MR. DINESH V. BAHIRWAN I 4 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 11 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 11 / 9 / 20 1 7 COPY OF THE ORDER FORW ARDED 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) PS ITAT, MUMBAI