DCIT 10(2)(2), MUMBAI V. M. SURESH EXPORTS P.LTD, MUMBAI

ITA 5266/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9314 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 11-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: B V JHAVERI
• Keywords: Tax effect; Rule 8D
• Section: 14A; 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI RAVISH SOOD (JM) I.T.A. NO. 5266 /MUM/ 201 7 (ASSESSMENT YEAR 20 12 - 1 3 ) DCIT - 10(2)(2) ROOM NO. 216 - A 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. V S . M/S. M. SURESH EXPORTS P. LTD. 419, PAREKH MARKET OPERA HOUSE MUMBAI - 400 004. PAN : AAACD5693D ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI B.V. JHAVERI DEPARTMENT BY SHRI D.G. PANSARI DATE OF HEARING 27.6 . 201 9 DATE OF PRONOUNCEMENT 17 . 9 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 10.5.2017 AND PERTAINS TO A.Y. 2012 - 13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS THAT LEARNED CIT(A) ERRED IN DELETING THE ADDITIO N OF RS. 70,25,654/ - MADE UNDER RULE 8D(II) UNDER SECTION 14A OF THE I.T. ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER IN THIS CASE MADE THE DISALLOWANCE INVOKING THE PROVISIONS OF RULE 8D(II) UNDER SECTION 14A OF THE I.T. ACT. AGAINST T HE ABOVE DISALLOWANCE LEARNED CIT(A) INTER ALIA NOTED THE RELIANCE BY THE ASSESSEE ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT AND DELETED THE ADDITION BY HOLDING AS UNDER : - AS PER DISALLOWANCE UNDER RULE 8D (2) (II) IS CONCERN, I HAVE GONE THR OUGH FIE WORKING OF AVAILABILITY OF INTEREST FREE OWN FUND AVAILABLE WITH THE APPELLANT COMPANY WHEN THESE INVESTMENTS HAVE BEEN MADE. FORM THIS WORKING IT IS CLEAR THAT THE INTEREST FREE OWN FUND WAS IN EXCESS OF INVESTMENTS MADE DURING THE PARTICULAR Y EAR. IF THAT IS SO THEN THE CASE OF THE APPELLANT M/S. M. SURESH EXPORTS P. LTD. 2 COMPANY IS A SQUARELY COVERED BY THE RATIO OF JURISDICTIONAL HIGH COURSE I E. BOMBAY HIGH COURT IN CASE OF HDFC BANK LIMITED - (2014) 366 ITR 555 (BOM), HDFC BANK (2016) 383 ITR 529 (BOM) AND RELIANCE UTILIT Y POWER LTD (2009) 313 ITR 340. THE HON BLE BOMBAY HIGH COURT HAS LAID DOWN THE PROPOSITION TH AT WHEN OWN INTEREST FREE FUND I S EXCESS THAN THE INVESTMENT MAD E BY THE APPELLANT COMPANY THEN NO DISALLOWANCE U/S. 14A OF THE ACT CAN BE RESTORED. IN VIEW OF SU BMISSION OF THE APPELLANT COMPANY AND RATIO LAID DOWN BY HON'BLE BOMBAY HIGH COURT IN AFORESAID CASES, THE DISALLOWANCE OF RS. 70,25,654/ - MADE UNDER RULE 8D(2)(II) IS DELETED . 4. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 5. WE HA VE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE REFERRED ABOVE. WE NOTE THAT SINCE THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS TO MAKE THE INVESTMENT THE HON'BLE HIGH COURT DECISION AS REFERRED ABOVE DULY SUPPORTED VIEW TAKEN BY LEARNED CIT(A). WE FIND THAT ON THE TOUCHSTONE OF ABOVE SAID CASE LAWS ASSESSEE IS NOT REQUIRED TO MAKE ANY RECONCILIATION OF THE INVESTMENT W ITH THE INTEREST FREE FUNDS AVAILABLE. IF THE INTEREST FREE FUNDS AVAILABLE ARE MORE THAN THE INVESTMENT NO DISALLOWANCE UNDER RULE 8D(II) IS REQUIRED. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). HENCE, WE UPHOLD THE SAME. 6. BEFORE PARTYING WE ALSO NOTE THAT TAX EFFECT IN THIS CASE IS BELOW THE LIMIT FIXED BY THE CBDT FOR FILING APPEALS BEFORE THE ITAT AS PER ITS LATEST ORDER. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 17 . 9 . 201 9 . SD/ - SD/ - ( RAVISH SOOD ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 17 / 9 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT M/S. M. SURESH EXPORTS P. LTD. 3 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI