UMC EXPORT CORPORATION, MUMBAI V. ACIT 2(3), MUMBAI

ITA 4919/MUM/2010

• Counselvise Citation: 491919914 RSA 2010
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M R KUBAL
• Keywords: Business income; Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI P.M. JAGTAP (AM) AND SMT. ASHA VIJAYARA GHAVAN (JM) ITA NO. 4919/MUM/2010 ASSESSMENT YEAR- 2007-08 M/S. UMC EXPORT CORPORATION, 6, MARWAH INDUSTRIAL ESTATE, OFF, SAKI VIHAR ROAD, MUMBAI-400 072 PAN-AABFU 9427G VS. THE ACIT 21(3), PRATYAYKHSHAKAR BHAVAN, BKC BANDRA (E), MUMBAI-400 051 (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: MR. M.R. KUBAL O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 30.3.2010 PASSED BY THE LD. CIT(A)-32 FOR THE ASSESSMENT YEAR 2007-08 . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFOR E WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND DISPOSE OF THIS MAT TER EX PARTE ON MERIT. 3. THE ONLY GROUND RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE U/S. 14A AT RS. 4,93,397/- OF THE I.T. ACT. 4. THE ASSESSEE HAS SHOWN DIVIDEND INCOME AND HAS C LAIMED EXEMPTION TO THE EXTENT OF RS. 60,89,160/-. THE AO HELD THAT NO DEDUCTION IS ALLOWABLE AGAINST INCOME FROM TAXABLE BUSINESS INCOME IN RESPECT OF ANY EXPENDITURE IN RELATION TO INCOME WH ICH DOES NOT FORM PART ITA NO. 4919/M/2010 2 OF TOTAL INCOME. THE ASSESSEE HAS CLAIMED EXPENDITU RE AND HAS NOT SHOWN BIFURCATION OF EXPENSES INCURRED REGARDING TH IS EXEMPT INCOME. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A). CIT(A) DISMISSED THE ASSESSEES APPEAL BY OBSERVING AS UNDER: IN VIEW OF THE FACTS AND POSITION OF LAW STATED IN THE PRECEEDING PARAGRAPHS, THE AO IS JUSTIFIED IN COMPU TING THE DISALLOWANCE U/S. 14A, KEEPING IN VIEW THE PRINCIPL ES LAID DOWN IN RULE 8D OF THE I.T. RULES. THIS GROUND OF APPEAL I S, THUS, NOT ALLOWED. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DISALLOWANCE U/S. 14A IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN GODREJ & BOYCE LTD . MFG. CO. VS DCIT (2010) 238 ITR 81 (BOM) HOLDING THAT THE PROVISIONS OF SEC. 14A ARE APPLICABLE IN CIRCUMSTANCES AS ARE PREVAILING PRESE NTLY AND THE DISALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME REASONABLE BASIS AND NOT RULE 8D. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISALLOWANCE, AS PER THE AFORE-NOTED JUD GMENT, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF JUNE, 2011 SD/- SD/- (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI, DATED 24 TH JUNE, 2011 RJ ITA NO. 4919/M/2010 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 4919/M/2010 4 DATE INITIALS 1 DRAFT DICTATED ON: 22. 0 6 . 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 22 .0 6 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______