DILESH ROADLINES P. LTD, MUMBAI V. ASST CIT (OSD)10(1), MUMBAI

ITA 5519/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3515 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 01-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Assessee Lawyers: TORAL J SHAH
• Section: 143(3); 14A; 115JB; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO. 5519/MUM/2014 (ASSESSMENT YEAR : 2010-11) DILESH ROADLINES PVT. LTD., A-2-2, BLUE BELL APARTMENT, DEVIDAYAL ROAD, BPS COMPOUND MAR, MULUND (WEST), MUMBAI 400080 PAN: AAACP 2139G ... APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX (OSD)-10(1), AAYKAR BHAVAN, MK ROAD, CHURCHGATE, MUMBAI 400020 .... RESPONDENT APPELLANT BY : SHRI TORAL J. SHAH RESPONDENT BY : SHRI VISHWAS JADHAV DATE OF HEARING : 07/12/2015 DATE OF PRONOUNCEMENT : 29/02/2016 ORDER THE CAPTIONED APPEAL IS PREFERRED BY THE ASSES SEE AND IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 17/06/ 2014 OF CIT(A)-22, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010-11, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICE R DATED 30/01/2013 UNDER SECTION 143(3) (II) OF THE INCOME TAX A CT, 1961( IN SHORT THE ACT). 2. IN THIS APPEAL, THE ONLY ISSUE RAISED BY THE AS SESSEE IS AGAINST THE ACTION OF THE INCOME TAX AUTHORITIES IN ADDING BAC K A SUM OF 2 ITA NO. 5519/MUM/2014 (ASSESSMENT YEAR : 2010-11) RS.8,18,309/- WHILE COMPUTING BOOK PROFIT UNDER SEC TION 115JB OF THE ACT ON ACCOUNT OF AMOUNT DISALLOWABLE UNDER SECTIO N 14A OF THE ACT. 3. BEFORE ME, THE LD. REPRESENTATIVE FOR THE ASSESS EE VEHEMENTLY POINTED OUT THAT FOR COMPUTING INCOME UNDER THE NOR MAL PROVISIONS, SECTION 14A OF THE ACT IS APPLICABLE IN DISALLOWING THE EXPENDITURE RELATABLE TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT AND THAT THE SAME IS NOT TO BE UNDERS TOOD AS SUCH FOR THE PURPOSES OF COMPUTING PROFIT UNDER SECTION 115JB OF THE ACT ALSO. ACCORDING TO THE LD. REPRESENTATIVE FOR THE ASSESSE E, THE DISALLOWANCE COMPUTED UNDER SECTION 14A OF THE ACT CANNOT BE AU TOMATICALLY APPLIED FOR COMPUTING THE BOOK PROFIT UNDER SECTI ON 115JB OF THE ACT. ACCORDING TO HIM, IN THE PRESENT CASE, THE ASSESSIN G OFFICER HAS MECHANICALLY APPLIED THE COMPUTATION OF DISALLOWANC E UNDER SECTION 14A OF THE ACT DONE IN THE MANNER PRESCRIBED IN RUL E 8D OF THE INCOME TAX RULES, 1962( THE THE RULES), FOR THE PURPOSE OF COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. IN THIS CONTEXT, IT IS NOTICED THAT THE CIT(APP EALS) HAS REFERRED TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. R.K.SHARE BROKING PVT. LTD, ITA NO.7546/MUM/2011 DA TED 24/07/2013 TO UPHOLD THE COMPUTATION OF BOOK PROFIT UNDER SE CTION 115JB OF THE ACT AFTER TAKING INTO CONSIDERATION THE DISALLOWANC E UNDER SECTION 14A OF THE ACT COMPUTED IN TERMS OF RULE 8D OF THE RUL ES. 3 ITA NO. 5519/MUM/2014 (ASSESSMENT YEAR : 2010-11) 5. OSTENSIBLY, IT HAS NOT BEEN SHOWN BEFORE ME THAT THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/ S. R.K.SHARE BROKING PVT. LTD, (SUPRA), RELIED UPON BY THE CIT(A PPEALS) HAS BEEN ALTERED BY ANY HIGHER AUTHORITY. THUS, THE SAID D ECISION CONTINUES TO HOLD THE FIELD AND ACCORDINGLY, NO FAULT CAN BE FOU ND IN THE DECISION OF THE CIT(APPEALS). APART THEREFROM, IT IS NOTICEABL E THAT CLAUSE(F) OF EXPLANATION (1) BELOW SECTION 115JB(2) OF THE ACT P ERMITS, INTER-ALIA, ENHANCEMENT OF THE BOOK PROFIT SHOWN IN THE PROF IT AND LOSS ACCOUNT BY AN AMOUNT OR AMOUNTS OF EXPENDITURE RELATABLE TO ANY INCOME TO WHICH SECTION 10 OF THE OF THE ACT APPLIES. IN TH E PRESENT CASE, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAD EARNE D DIVIDEND INCOME WHICH WAS CLAIMED EXEMPT UNDER SECTION 10(33) OF TH E ACT AND FURTHER NOTED THAT THE ASSESSEE HAD ALREADY DISALLOWED A SU M OF RS.8,18,309/- IN TERMS OF SECTION 14A OF THE ACT IN THE COMPUTATI ON OF INCOME UNDER THE NORMAL PROVISIONS. THEREFORE, THE ASSESSING OF FICER PICKED UP THE SAME AMOUNT OF DISALLOWANCE AND MADE THE ADJUSTMENT TO THE STATED BOOK PROFIT ON THE STRENGTH OF CLAUSE(F) TO EXPLA NATION (1) BELOW SECTION 115JB(2) OF THE ACT. IN VIEW OF THE AFORES AID FACTS, IN MY VIEW, THE ASSESSEE IS NOT JUSTIFIED IN ASSERTING THAT THE AMOUNT ADDED BY THE ASSESSING OFFICER IN COMPUTING THE BOOK PROFIT UN DER SECTION 115JB OF THE ACT HAS BEEN DONE IN A MECHANICAL MANNER. THUS , ON THIS ASPECT THE ASSESSEE FAILS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/02/2016. SD/- (G.S. PANNU) ACCOUN TANT MEMBER MUMBAI, DATED 29/02/2016 4 ITA NO. 5519/MUM/2014 (ASSESSMENT YEAR : 2010-11) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS