ASHOK THAKERIA, MUMBAI V. ACIT 11(1), MUMBAI

ITA 4753/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70854 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS BHAVANA YASHROY
• Assessee Lawyers: ANIL THAKAR
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , . ! , '# ' $ BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARO RA, AM ./ I.T.A. NO. 4753/MUM/2012 ( % % % % & & & & / ASSESSMENT YEAR: 2008-09 MR. ASHOK THAKERIA, 32, ROCK GARDEN, NEW LINK ROAD, ANDHERI (WEST), MUMBAI 400053 % % % % / VS. THE ACIT 11(1), MUMBAI. ' '# ./ ( ./ PAN/GIR NO. : AAAPT5192Q ( ') / APPELLANT ) .. ( *+') / RESPONDENT ) ') , ' / APPELLANT BY: SHRI ANIL THAKAR *+') - , ' / RESPONDENT BY : MRS. BHAVANA YASHROY % - .# / DATE OF HEARING : 26/08/2013 / & - .# / DATE OF PRONOUNCEMENT : 26/08/2013 '0 / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-3, MUMBAI DATED 07/06/2012 FOR ASSESS MENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE LD. AO IS ERRED IN DISALLOWING A SUM OF RS.18,1 4,524/- U/S.14A R.W.S.8D OF THE INCOME TAX ACT,1961. 2. YOUR HONORS ARE THUS, REQUESTED TO DELETE THE ADDIT ION MADE IN THE ASSESSEE. 2. AT THE OUTSET IT WAS SUBMITTED BY LD. A.R THAT T HE DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT,1961(THE ACT) R.W . RULE 8D HAS NOT BEEN PROPERLY CALCULATED BY THE AO AND LD. CIT(A) WITHOU T APPRECIATING THE FACTS HAS ./ I.T.A. NO. 4753/MUM/2012 ( % % % % & & & & / ASSESSMENT YEAR: 2008-09 2 UPHELD THE ACTION OF AO. HE SUBMITTED THAT ACCORDI NG TO FORMULA LAID DOWN IN RULE 8D AVERAGE OF INVESTMENT WHICH IS REQUIRED T O BE TAKEN UNDER B COLUMN IS THE AVERAGE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND LAST DAY OF THE RELEVANT ACCOU NTING YEAR IS TO BE TAKEN. LD. AR SUBMITTED THAT ASSESSEE HAS ONLY TWO INVESTMENTS , THE INCOME FROM WHICH DO NOT FORM PART OF THE TOTAL INCOME AND THE SAME IS I N SHAPE OF PPF AND EQUITY SHARES. THE AVERAGE OF WHICH IS ONLY A SUM OF RS.2 6,96,190/- IN PLACE OF RS.1,71,43,035/- TAKEN BY THE AO. HE SUBMITTED THA T ACCORDING TO CALCULATION OF ASSESSEE AS PER FORMULA OF RULE 8D THE DISALLOWANC E SHOULD BE ONLY A SUM OF RS.2,85,380/- IN PLACE OF A SUM OF RS.18,14,524/- D ISALLOWED BY THE AO. HE IN THIS REGARD REFERRED TO THE FOLLOWING CALCULATION: A. INTEREST PAID 29,35,731/- B. AVERAGE OF INVESTMENT OPENING CLOSING PPF 22,05,471/- 24,51,909/- EQUITY SHARE OF CO, 3,67 ,500/- 3,67,500/- TOTAL 25,72,971/- 28,19,409/- AVERAGE 26,96,190/- C. AVERAGE VALUE OF TOTAL ASSETS: OPENING CLOSING FIXED ASSETS 18,73,439/- 49,53,839/- INVESTMENTS 1,67,45,905/- 1,75,40,166/- CURRENT ASSETS 1 ,54,67,122/- 16,41,496/- 3,40,86,466/-/- 2,41,35,502/- 2,91,10,984/- DISALLOWANCE U/S.14A R.W.R. 8D A *B C = 29,35,731/- * 26,96,190/- 2,91,10,984 = RS. 2, 71,900/- ADD:0.5% OF RS.26,96,190/- =RS. 13,480/- TOTAL DISALLOWANCE U/A.14A =RS.2,85,380/- ./ I.T.A. NO. 4753/MUM/2012 ( % % % % & & & & / ASSESSMENT YEAR: 2008-09 3 HE SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO TO VERIFY THE CORRECTNESS OF THE AFOREMENTIONED CALCULATION. 3. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY AO AND LD. CIT(A). 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THERE SEEMS TO BE A FORCE IN THE CLAIM OF THE ASSESSEE. THE DIFFERENC E, IF ANY, IN CALCULATION OF AO AND ASSESSEE COME ONLY UNDER B. PART, WHERE AVER AGE OF INVESTMENT, AS PER PROVISIONS SHOULD BE THE AVERAGE OF VALUE OF INVEST MENT, INCOME FROM WHICH DOES NOT FORM PART OF THE TOTAL INCOME. WHILE TAKING SU CH AVERAGE AO HAS TAKEN INTO CONSIDERATION THE AVERAGE VALUE OF THE OTHER INVES TMENTS ALSO. THEREFORE, WE CONSIDER IT JUST AND PROPER TO ACCEPT THE REQUEST OF LD. AR AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO RECALCUL ATE THE DISALLOWANCE AS PER RULE 8D AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUN ITY OF HEARING AS PER PROVISIONS OF LAW. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 26/08/2013 . '0 - & #' 1 2%3 26/08/2013 - 4 SD/- SD/- ( SANJAY ARORA) (I.P.BANSAL) /ACCOUNTANT MEMBER '# /JUDICIAL MEMBER MUMBAI; 2% DATED 26/08/2013 ./ I.T.A. NO. 4753/MUM/2012 ( % % % % & & & & / ASSESSMENT YEAR: 2008-09 4 '0 '0 '0 '0 - -- - *.56 *.56 *.56 *.56 7'6&. 7'6&. 7'6&. 7'6&. / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 694 *.% , , / DR, ITAT, MUMBAI 6. 4: ; / GUARD FILE. '0% '0% '0% '0% / BY ORDER, +6. *. //TRUE COPY// < << < / = = = = (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . % . .VM , SR. PS