HARIBHAKTI & CO., MUMBAI V. ADDL CIT RG 11(2), MUMBAI

ITA 5117/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55433 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 20-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: NIHAR JAMBUSARIA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI V. DURGA RAO (JM ) I.T.A.NO.5117/MUM/2010 (A.Y. 2007-08) M/S. HARIBHAKTI & CO., 42, FREE PRESS HOUSE, FREE PRESS JOURNAL ROAD, 215, NAIMAN POINT, MUMBAI-400 021. PAN: AAAFH2010F. VS. ADDL. COMMR. OF INCOME-TAX, RANGE 11(2), AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. APPELLANT RESPONDENT APPELLANT BY SHRI NIHAR JAMBUSARIA. RESPONDENT BY SHRI V .V. SHASTRI. DATE OF HEARING 20-09-2011 DATE OF PRONOUNCEMENT 23-09-2011 O R D E R PER R.S. SYAL, AM : THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER PASSED BY THE CIT(A)-3, MUMBAI, ON 26-04-2010 IN RELATION TO ASSESSMENT YEAR 2007-08. 1. THE ONLY POINT RAISED IN THIS APPEAL IS AGAINST THE DISALLOWANCE U/S.14A OF THE ACT. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A FIRM OF CHARTERED ACCOUNTANTS. THE ASSESSEES SOURCE OF INC OME CONSISTS OF 2 INCOME FROM BUSINESS, CAPITAL GAINS & INCOME FROM O THER SOURCES. THE ASSESSEE CLAIMED EXEMPT INCOME OF RS.30,15,536/-. N O DISALLOWANCE WAS OFFERED U/S.14A. THE AO MADE DISALLOWANCE TO THE TU NE OF RS.60,070/- TOWARDS EXPENSES INCURRED IN EARNING THE EXEMPT INC OME BY WAY OF DIVIDEND AND INCOME FROM LONG-TERM CAPITAL GAIN. 3. WHEN THE MATTER CAME UP BEFORE THE CIT(A), HE DI RECTED THE AO TO COMPUTE DISALLOWANCE AS PER RULE 8D. THE ASSESSEE I S NOW IN APPEAL BEFORE US AGAINST THE DECISION OF THE CIT(A). 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED I N THIS APPEAL IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIO NAL HIGH COURT IN GODREJ & BOYCE MFG. LTD. VS. DCIT (2010) 328 ITR 81 (BOM) IN WHICH IT HAS BEEN HELD THAT DISALLOWANCE IS CALLED FOR U/S. 14A IN SUCH CIRCUMSTANCES. HOWEVER, THE MANNER OF COMPUTATION O F SUCH DISALLOWANCE HAS BEEN RESTORED TO THE FILE OF AO FOR MAKING ON S OME REASONABLE BASIS. IT HAS FURTHER BEEN HELD IN THIS CASE THAT THE PROV ISIONS OF RULE 8D ARE NOT APPLICABLE AS THESE ARE PROSPECTIVE. RESPECTFULLY F OLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO T O COMPUTE DISALLOWANCE U/S.14A IN ACCORDANCE WITH THE RATIO L AID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE AFORENOTED CASE OF GODREJ & BOYCE LTD. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. 3 ORDER PRONOUNCED ON THE 23RD DAY OF SEPTEMBER, 2011. SD/- SD/- (V. DURGA RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 23RD SEPTEMBER, 2011. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-3,MUMBAI. 4 CIT-11,MUMBAI. 5.DR,H BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. 4 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 20-09- 2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 20-09- 2011 SR.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/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10 . DATE OF DISPATCH OF ORDER *