ADDL CIT RG 25(3), MUMBAI V. MANISH P. GANDHI, MUMBAI

ITA 5071/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79470 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYANARAYAN RAJU
• Keywords: Business income; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 5071/MUM/2010 ASSESSMENT YEAR: 2007-08 ACIT-25(3) MUMBAI VS. SHRI MANISH P. GANDHI 2202/2203, OBEROI PARK VIEW, TOWER-A, SAMTA NAGAR, KANDIVALI (EAST) MUMBAI- 400 101 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AACPG 3600 N ASSESSEE BY : SHRI K. SHIVRAM REVENUE BY : SHRI SATYANARAYAN RAJU DATE OF HEARING : 15.07.2014 DATE OF PRONOUNCEMENT : 18.07.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-35, MUMBAI DATED 22.03.2010 FOR THE ASSES SMENT YEAR 2007-08. 2. IN GROUND NO. 1, THE REVENUE HAS AGITATED THE DE CISION OF THE LD.CIT(A) DIRECTING THE AO TO ACCEPT THE CLAIM OF SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN ON PROFIT ARISING FROM PURCHASE AND SALE OF SH ARES INSTEAD OF BUSINESS INCOME AS TREATED BY THE AO. 2.1 AT THE OUTSET, IT IS OBSERVED THAT ON SIMILAR I SSUE, IN THE ASSESSEES OWN CASE FOR THE A.YS. 2005-06 & 2006-07, THE TRIBUNAL, VIDE ITS ORDER DATED 29.07.2011 HAS SET ASIDE THE ISSUE AND REMANDED THE MATTER BACK TO THE AO TO DECIDE THE MATTER AFRESH AFTER TAKING INTO CONSIDERATION OF CORRECT F ACTS AS THE FACTS CULLED OUT BY THE AO DO NOT DELAY TALLY WITH THE FACTS OF THE ASSESSE ES CASE. FURTHER, IT HAS BEEN BROUGHT OUR NOTICE THAT THE AO HAS PASSED THE ORDER GIVING EFFECT TO THE TRIBUNAL DECISION FOR THE SAID ASSESSMENT YEARS AGAINST WHIC H THE ASSESSEE HAS FURTHER ITA NO. 5071/MUM/2010 SHRI MANISH P. GANDHI ASSESSMENT YEAR: 2007-08 2 PREFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHOR ITY, I.E., LD.CIT(A) WHICH IS YET TO BE DISPOSED OFF. SINCE SIMILAR ISSUE HAS ARISEN IN THE PRESENT APPEAL IN HAND ALSO, WE ARE OF THE CONSIDERED OPINION THAT IT IS JUST AND P ROPER TO SET ASIDE THIS GROUND BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN THE LINE OF SIMILAR DIRECTION GIVEN BY THE TRIBUNAL IN THE ASSESSES OWN CASE FOR A.YS. 2005-0 6 AND 2006-07. WE DIRECT AND ORDER ACCORDINGLY. GROUND NO.1 ALLOWED FOR STATISTICAL PURPOSES. 3. IN GROUND NO. 2, THE REVENUE HAS AGITATED THE DE CISION OF THE LD.CIT(A) DIRECTING THE AO TO RESTRICT THE DISALLOWANCE TO RS .34,181/- AGAINST THE DISALLOWANCE OF RS.4,15,282/- MADE BY THE AO U/S 14A. 3.1 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD IN RESPECT OF THIS GROUND, IT IS PERTINENT TO MENTION THAT THE AO HAS FOUND THAT THE ASSESSEE HAS EARNED RS.16,73,325/- BY WAY OF DIVIDEND ON SHARES AND RS.1,96,444/- AS INTEREST ON RBI BOND WHICH THE ASSESSEE HAS CLAIMED EXEMPT. IN THE ASSESSMENT FRAMED, THE AO HAS HELD THAT THE ASSESSEE COULD NOT FURNISH THE DETAILS OF EXPENSES INCURRED ON EARNING THIS EXEMPT INCOME AND THEREFORE, HAS AP PLIED SECTION 14A READ WITH RULE 8D AND DISALLOWED RS.4,15,282/-. ON APPEAL, TH E LD.CIT(A) HAS HELD THAT THE ASSESSEE HAS CLAIMED ONLY RS.34,181/- AS TOTAL EXPE NDITURE IN THE INCOME AND EXPENDITURE STATEMENT FILED ALONG WITH RETURN OF IN COME AND THEREFORE RESTRICTED THE SAID DISALLOWANCE TO THE EXPENSES CLAIMED. IN VIEW OF THE FACT THAT THE DISALLOWANCE U/S 14A CANNOT EXCEED THE TOTAL EXPENDITURE CLAIMED IN THE INCOME AND EXPENDITURE STATEMENT FILED ALONG WITH THE RETURN, WE DO NOT FI ND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) RESTRICTING THE DISALLOWANCE TO RS.34 ,181/-, WHICH IS THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. THEREFORE, THE DECISION OF THE LD.CIT(A) ON THIS COUNT IS UPHELD. GROUND NO. 2 DISMISSED. 4. IN GROUND NO.3, THE REVENUE HAS AGITATED DECISIO N OF THE LD.CIT(A) DIRECTING THE AO TO DELETE THE ADDITIONS MADE ON ACCOUNT OF D EEMED INCOME ON HOUSE PROPERTY. 4.1 AT THE OUTSET, IT IS NOTED THAT IN DETERMINING THE INCOME FROM HOUSE PROPERTY IN RESPECT OF KANDIVALI AND PUNE PROPERTIES, THE TR IBUNAL FOR THE A.Y. 2006-07, HAS SET ASIDE THE ISSUE BACK TO THE FILE OF THE AO TO E XAMINE THE CORRECT FACTS AND ITA NO. 5071/MUM/2010 SHRI MANISH P. GANDHI ASSESSMENT YEAR: 2007-08 3 CONSIDER THE ISSUE AFRESH. IN VIEW OF THE FACT THAT THERE ARE SOME CONTRARY FACTS AS TO THE CLAIM OF SELF OCCUPIED PROPERTY DURING THE YEAR UNDER CONSIDERATION ALSO, WE ARE OF THE CONSIDERED VIEW THAT IT IS JUST AND PROPER T O SET ASIDE THE DECISION OF THE LD.CIT(A) ON THIS ISSUE BACK TO THE FILE OF THE AO TO EXAMINE THE CORRECT FACTS AND CONSIDER THE ISSUE AFRESH. WE DIRECT AND ORDER ACCO RDINGLY. GROUND NO. 3 IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF JULY 2014. SD/- SD/- (SANJAY ARORA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 18.07.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR B BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.