PREMKUMAR KHURANA, MUMBAI V. ASST CIT CEN CIR 20, MUMBAI

ITA 541/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3912 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

SHRI PREM KUMAR KHURANA - 1 - VK;DJ VIHYH; VF/KDJ.K LH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI JH JKTSUNZ FLAG YS[KK LNL; ,OA JH LAT; XXZ U;KF;D L NL; DS LE{K BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG JUDICIAL MEMBER VK;DJ VIHY LA[;K /ITA NO.541/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR:- 2007-08 SHRI PREM KUMAR KHURANA, 501, RAHEJA CENTRE, FREE PRESS JOURNAL MARG, NARIMAN POINT, MUMBAI 400 021 CUKE@ VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 20, ROOM NO. 402, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020. PAN:- AGGPK6149Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VIHYKFKHZ DH VKSJ LS @ APPELLANT BY NONE IZR;FKHZ DH VKSJ LS @ RESPONDENT BY SHRI R.A PANT VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER RAJENDRA SINGH, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 8.11.2011 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE ONLY DISPUTE R AISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING DISALLOWANCE OF EXPENSES RELATING TO EXEM PT INCOME U/S 14A OF THE INCOME TAX ACT. 2. THE FACTS IN BRIEF ARE THAT THE AO DURING THE AS SESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD MADE SUBSTANTIAL INVESTMENT INCOME FRO M WHICH WAS EXEMPT FROM TAX. THE ASSESSEE HAD ALSO DEBITED INTEREST EXPENSES TO THE TUNE OF RS. 5,63,259/- IN THE P&L ACCOUNT. HE, THEREFORE, COMPUTED THE DISALLOWANCE O F EXPENSES U/S 14A AS PER RULE 8D AT RS. 7,80,343/- INCLUDING DISALLOWANCE OF INTEREST. IN APPEAL CIT(A) CONFIRMED THE ORDER OF AO, AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BE FORE TRIBUNAL. LQUOKBZ DH RKJH[K@ DATE OF HEARING 29-7-2013 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 29-7-2013 SHRI PREM KUMAR KHURANA - 2 - 3. AT THE TIME OF HEARING OF THE APPEAL NO ONE APPE ARED ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE NOR ANY ADJOURNMENT APPLICATION WAS RECEIVED. WE, THEREFORE, PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAIL ABLE ON RECORD AND AFTER HEARING THE LEARNED DR. 4. WE HAVE HEARD THE LEARNED DR, PERUSED THE RECORD S AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING DISALLOWANCE OF EXPENSES RELATING TO EXEMPT INCOME U/S 14A OF THE INCOME TAX ACT. THE AUTHORITIES BELOW HA VE COMPUTED THE DISALLOWANCE AS PER RULE 8D. HONBLE HIGH COURT OF BOMBAY IN CASE OF GO DREJ BOYCE MFG CO ( 328 ITR 81) HAVE HELD THAT RULE 8D IS APPLICABLE ONLY FROM ASSESSMEN T YEAR 2008-09 AND THAT IN RESPECT OF PRIOR YEARS DISALLOWANCE HAS TO BE MADE ON A REASON ABLE BASIS AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSMENT YEAR INVOL VED IN THE PRESENT APPEAL IS ASSESSMENT YEAR 2007-08. WE, THEREFORE, SET ASIDE T HE ORDER OF CIT(A) AND RESTORE THIS ISSUDE TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF OBSERVATION MADE ABOVE AND AFTER ALLOWING OPPORTUNI TY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 -7-20 13 SD/- SD/- (SANJAY GARG) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER SKS SR. P.S, MUMBAI DATED 29.7.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI