INFINITY KNOWLEDGE SYSTEMS PVT. LTD., MUMBAI V. A.C.I.T. 10(1), MUMBAI

ITA 5471/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78632 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 03-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: AMBRISH MEHTA
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . , . , ! BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.5471/MUM/2012 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2009-10 M/S. INFINITY KNOWLEDGE SYSTEMS PVT. LTD., OFFICE NO.4, SHIPA , 7 TH ROAD, PRABHAT COLONY, SANTACRUZ (EAST) MUMBAI 400 055. ' ' ' ' / VS. THE ASSTT. COMMISSIONER OF INCOME TAX 10(1), 461, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 $ ./ % ./ PAN/GIR NO. : AACCM 0037A ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $& ) / APPELLANT BY: SHRI AMBRISH MEHTA '($& * ) / RESPONDENT BY : SHRI ASHOK SURI ' * +, / DATE OF HEARING : 03/042014 -.# * +, / DATE OF PRONOUNCEMENT : 03/04/2014 / / O R D E R PER I.P.BANSAL,J.M: THIS APPEAL IS FILED BY THE ASSESSEE. IT IS DIRE CTED AGAINST ORDER PASSED BY LD. CIT(A)-21,MUMBAI DATED 1/5/2012 FOR ASSESSMENT YEAR 2009-10. THE GROUNDS OF APPEAL READ AS UNDER: 1. DISALLOWANCE U/S 14A: A. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT (A)) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER [AO) IN DISALLO WING EXPENSES OF RS. 5,35,354/- UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 R. W. R. 8D OF INCOME TAX RULES, 1962, AS AGAINST DISALLOWANCE COMPUTED BY THE APPEL LANT AT RS.5,849/- ON THE ./ I.T.A. NO.5471/MUM/2012 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2009-10 2 GROUND THAT THE APPELLANTS INVESTMENTS AT THE YEAR END AMOUNTS TO ALMOST 90% OF SHARE CAPITAL AND RESERVES AND SURPLUS. B, THE LEARNED CIT (A) OUGHT TO HAVE ACCEPTED WRITT EN SUBMISSIONS MADE BY THE APPELLANT VIDE LETTER DATED 11.04.2012 AND OUGHT TO HAVE DIRECTED AO TO RESTRICT THE DISALLOWANCE COMPUTED AT RS.5,849/- BY THE APPELLAN T HAVING REGARD TO THE ACCOUNTS AND NATURE OF ACTIVITY INSTEAD OF RS.5,35, 354/- DISALLOWED BY AO. C. THE LEARNED CIT (A) HAS ERRED ON FACTS AND IN C IRCUMSTANCES OF THE CASE AND IN LAW IN CONFIRMING THE ACTION OF THE AO TO APPLY RUL E 8D WITHOUT POINTING OUT ANY INACCURACY IN THE METHOD OF APPORTIONMENT OR ALLOCA TION OF EXPENSES AS ADOPTED BY THE APPELLANT PARTICULARLY WHEN INVESTMENT PORTFOLI O OF THE APPELLANT IS TOTALLY DORMANT AND REQUIRES LITTLE OR NO ADMINISTRATION EX PENSES. D. WITHOUT PREJUDICE, THE LEARNED CIT (A) OUGHT TO HAVE APPLIED AND FOLLOWED THE PRINCIPLE OF RES-JUDICATA BY ACCEPTING AND FOLLOWIN G THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 IN APPELLANTS OWN CASE AND OUGHT TO HAVE ACCEPTED THE DISALLOWANCE OF RS.5.849/- FOR THE YEAR UNDER APPEA L, AS THERE WAS NO CHANGE IN THE FACTS AND LAW IN SUBSEQUENT YEARS. 2. GENERAL: A) THE APPELLANT PRAYS THAT THE RELIEF CLAIMED ABOV E BE GRANTED AND ITS ASSESSMENT BE MODIFIED ACCORDINGLY. B) YOUR APPELLANT RESERVES THE RIGHT TO ADD, TO AME ND, TO MODIFY, TO ALTER OR TO DELETE ANY OF THE AFORESAID GROUNDS OF APPEAL AS THEY MAY THINK FIT BY THEMSELVES OR BY THEIR REPRESENTATIVES. 2. THE ASSESSEE HAS EARNED DIVIDEND INCOME AMOUNT ING TO RS.2,00,400/-. WHILE FILING THE RETURN THE ASSESSEE CALCULATED DIS ALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961(THE ACT) AMOUNTING TO RS. 5849/- ON THE BASIS OF ASSESSMENT ORDER FOR A.Y. 2007-08 AND 2004-05. HOW EVER, AO DID NOT ACCEPT THE DISALLOWANCE MADE BY THE ASSESSEE AND COMPUTED DISA LLOWANCE AS PER PROVISIONS OF RULE 8D R.W. SECTION 14A OF THE ACT AT A SUM OF RS.5,35,354/-. THE DISALLOWANCE MADE BY THE AO WAS AGITATED IN THE APP EAL FILED BEFORE LD. CIT(A). THE ASSESSEE REVISED THE DISALLOWANCE FROM RS.5849/ - TO RS.17,104/-. HOWEVER, LD. CIT(A) HAS UPHELD THE DISALLOWANCE MADE BY THE AO AND ASSESSEE IS AGGRIEVED, HENCE, HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING, IT WAS THE GRIEVANCE OF THE ASSESSEE THAT ASSESSEE HAD SUBMITTED ALLOCATION OF EXPENSES AND AFTER TAKI NG EACH AND EVERY EXPENSES INTO ACCOUNT A REVISED DISALLOWANCE WAS COMPUTED AT RS.17,104/-. HE SUBMITTED THAT THE AO DID NO RECORD PROPER SATISFACTION TO RE JECT THE CLAIM OF THE ASSESSEE. THEREFORE, HE SUBMITTED THAT THE CALCULATION FILED BY THE ASSESSEE SHOULD BE ./ I.T.A. NO.5471/MUM/2012 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2009-10 3 ACCEPTED. LD. AR ALSO REFERRED TO PAGE 41 AND 42 OF THE PAPER BOOK TO SUBMIT THAT WITHOUT EXAMINING THE CLAIM OF THE ASSESSEE LD . CIT(A) HAS REJECTED THE CONTENTION OF THE ASSESSEE THAT DISALLOWANCE OF RS .17,104/- ONLY WAS CALLED FOR. 4. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. DR TH AT THE IMPUGNED ASSESSMENT YEAR IS 2009-10 AND AS PER PROVISIONS OF SECTION 14A(2) THE AO HAS ALSO RECORDED SATISFACTION REGARDING INCORRECTNES S OF THE CLAIM OF THE ASSESSEE AND, THEREFORE, LD. DR PLEADED THAT DISALLOWANCE HA S RIGHTLY BEEN MADE IN ACCORDANCE WITH RULE 8D AND DISALLOWANCE SHOULD BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THOUGH AO HAS WRITTEN IN THE ASSESSMEN T ORDER THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE BUT HE HAS NOT SPELT OUT THAT WHAT IS THE BASIS ON WHICH HE HAS ARRIVED AT A CONCLUSION THAT THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTABLE. AT T HE SAME TIME ASSESSEE HAS ALSO FILED REVISED AMOUNT OF DISALLOWANCE WHICH HAS ALSO NOT BEEN DEALT BY LD. CIT(A). KEEPING IN VIEW ALL THESE FACTS IN MIND, WE ARE OF THE OPINION THAT IT WOULD SERVE THE INTEREST OF JUSTICE IF THE MATTER IS RESTORED B ACK TO THE FILE OF AO FOR RE- ADJUDICATION AS PER PROVISIONS OF LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS CONSIDERED TO BE ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 03/04/2014 . / * -.# 0 1'2 03/04/2014 . * 3 SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 1' DATED 03/04/2014 . ' . .VM , SR. PS ./ I.T.A. NO.5471/MUM/2012 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2009-10 4 / / / / * ** * '+4 '+4 '+4 '+4 54#+ 54#+ 54#+ 54#+ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 473 '+' , , / DR, ITAT, MUMBAI 6. 38 9 / GUARD FILE. /' /' /' /' / BY ORDER, (4+ '+ //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI