DCIT CEN CIR 3(3), MUMBAI V. ORICON ENTERPRISES LTD, MUMBAI

ITA 5255/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0503 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, MU MBAI BEFORE SH. P.K. BANSAL VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 5255/MUM/2015 (ASSESSMENT YEAR- 2011-12) DCIT CC -3(3) ROOM NO. 401, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 VS. M/S ORICON ENTERPRISES LTD. PARIJAT HOUSE, 1 ST FLOOR, 1067, DR. E MOSES ROAD, WORLI, MUMBAI -400018 PAN: AAACO0480F (APPELLANT) (RESPONDENT) REVENUE REPRESENTED BY : SHRI RAJAT MITTAL (DR) ASSESSEE REPRESENTED BY : SHRI SUNIL NAHATA WITH CHIRAG JAIN (AR) DATE OF HEARING : 08.08.2017 DATE OF ORDER : 08.08.2017 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER PAWAN SINGH JUDICIAL MEMBER ; 1. THIS APPEAL BY THE REVENUE UNDER SECTION 253 OF INC OME-TAX ACT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS )-31, MUMBAI DATED 4 TH AUGUST 2015 FOR ASSESSMENT YEAR 2011-12. THE REVEN UE HAS RAISED SOLE GROUND OF APPEAL THAT THE LEARNED COMMISSIONER (APPEALS) ERRED IN DELETING THE DISALLOWANCE UNDER SECTION 14A READ WI TH RULE 8D IGNORING THE FACT THAT APPLICATION OF RULE 8D IS MANDATORY F OR THE CURRENT YEAR. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR WAS COMPLETED UNDER SECTION 143(3) ON 13 TH MARCH 2014. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R MADE THE 2 ITA NO. 5225/MUM/2015- M/ S ORICON ENTERPRISES LTD. DISALLOWANCE OF RS. 2,19,62,398/-UNDER SECTION 14A READ WITH RULE 8D. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE DISALLO WANCE WAS RESTRICTED TO RS.14,84,776/-, ON THE BASIS OF DECIS ION OF TRIBUNAL FOR ASSESSMENT YEAR 2009-10. THE DISALLOWANCE WAS MADE AS PER RULE 8D(2)(III) BY TRIBUNAL FOR ASSESSMENT YEAR 2009-10. 3. WE HAVE HEARD LEARNED DR FOR REVENUE AND LEARNED AR FOR ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OU TSET OF THE HEARING THE LEARNED AR OF THE ASSESSEE ARGUED THAT THE GROUND O F APPEAL RAISED IN THE PRESENT APPEAL IS COVERED BY THE DECISION OF TRIBUN AL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 IN ITA NO.1145/M/2 013. THE LEARNED AND DR FOR THE REVENUE IS NOT DISPUTED THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE AS CONTENDED BY LEARNED AR OF T HE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND HAVE SEEN THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2009 -10. WE HAVE SEEN THAT THE FACTS OF THE YEAR UNDER CONSIDERATION ARE ALMOST SIMILAR AND THE ASSESSING OFFICER MADE SIMILAR DISALLOWANCE FOR ASS ESSMENT YEAR 2009-10. THE TRIBUNAL ON THE APPEAL OF THE ASSESSEE PASSED THE FOLLOWING ORDER: 9. WE HAVE CAREFULLY PERUSED THE ORDERS OF AUTHOR ITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED THE BALANCE-SHEET OF THE ASSESSEE . THE UNDISPUTED FACT IS THAT ASSESSEE IS HAVING OWN FUNDS IN THE FORM OF SH ARE CAPITAL AND RESERVES AND RESERVES AND SURPLUS AMOUNT IN RS. 101.31.31 CR ORES AS AGAINST THE INVESTMENTS OF RS. 69.08 CRORES. THIS CLEARLY SHOWS THAT THE ASSESSEE IS HAVING SUFFICIENT OWN FUNDS TO MAKE THE INVESTMENT. FURTHER, WE FIND THAT OUT OF THE TOTAL INVESTMENT OF RS. 69.08 CRORES, RS. 66 .68 CRORES ARE INVESTED IN SUBSIDIARY/ASSOCIATE COMPANIES. FURTHER, WE FIND TH AT LOAN LIABILITY OF RS. 3 ITA NO. 5225/MUM/2015- M/ S ORICON ENTERPRISES LTD. 25.25 CRORES AS ON 31.03.2008 HAS COME DOWN TO RS. 15.61 CRORES AS ON31.03.2009 I.E. YEAR UNDER CONSIDERATION. THIS AL SO PROVES THAT THERE IS NO FRESH BORROWING DURING THE YEAR UNDER CONSIDERATION . 9.1. CONSIDERING THE ABOVE STATED FACTS INFERTILITY , WE DO NOT FIND ANY REASON FOR THE LOCATION OF INTEREST EXPENDITURE TOWARD EAR NING OF INCOME. HOWEVER, ALLOCATION OF ADMINISTRATIVE AND OTHER EXPENSES CAN NOT BE RULED OUT. THE DISALLOWANCE AS PER RULE 8D(2)(III) IS COMPUTED BY BRANDED COMMISSIONER APPEAL COMES TO RS.210756/-. IN OUR CONSIDERED OPI NION, THIS DISALLOWANCE WOULD MEET THE END OF JUSTICE. THE TOTAL DISALLOWAN CE SUSTAINED IS RS.210756/- 10. IN THE RESULT, THE APPEAL FILED BY THE VENUE IS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. 5. WE HAVE SEEN THAT THE LD. COMMISSIONER (APPEALS) PA SSED THE ORDER AFTER CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10. THUS, WE DO NOT FIND ANY R EASON TO INTERFERE IN THE FINDING OF LD. COMMISSIONER (APPEALS). IN FACT, THE GROUND OF APPEAL RAISED BY REVENUE IS COVERED AGAINST THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH DAY OF AUGUST 2017. SD/- SD/- (P.K. BANSAL) (PAWAN SINGH) VICE-PRESIDENT JUDICIAL MEMBER MUMBAI; DATED 08/8/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITA T, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/