SEVAK PUBLICATION PRIVATE LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX - 8(1)(2), MUMBAI

ITA 5540/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5753 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 142(1); 14A; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO. 5540 / MUM/ 2017 ( / ASSESSMENT YEAR: 2012 - 13 ) M/S. SEVAK PUBLICATION PVT. LTD. B - 602, GODREJ COLISEUM, K.J. SOMAIYA HOSPITAL ROAD, SION (E), MUMBAI - 400022. / VS. ACIT - 8(1)(2) ROOM NO. 651, AAYAKAR BHAWAN, M.K. ROAD, CHURCHGATE - 400020. ./ ./ PAN/GIR NO. : AAKCS 3955 P ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 03.01.2019 /DATE OF PRONOUNCEMENT: 30. 01.2019 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 23.06.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 14, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2012 - 13. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - GROUND 1: DISALLOWANCE U/S 14A OF THE I.T. ACT, 1961(THE ACT) READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 (THE RULES). REVENUE BY : SHRI ASHISH KUMAR (DR) ASSESSEE BY: NONE ITA. NO. 5540 /M/201 7 A.Y. 2012 - 13 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THAT RULE 8D OF THE RULES IS APPLICABLE IN THE CASE OF THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO UNDER RULE 8D(2)(III) OF THE ACT. GROUND II GENERAL THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND/ OR AMEND ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 29.07.2012 FOR THE A.Y. 2010 - 11 DECLARING TOTAL INCOME TO THE TUNE OF RS.2,10,46,394/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NECESSARY NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE EARNED THE EXEMPT INCOME IN SUM OF RS.58,49,476/ - . THE ASSESSEE VOLUNTARILY DISALLOWED IN SUM OF RS.10,000/ - U/S 14A OF THE ACT. THE AO APPLIED THE PROVISIONS OF SECTION 14A R.W. RULE 8D AND ASSESSED THE EXPENSES TO EARN THE EXEMPT INCOME IN SUM OF RS.8,10,970/ - . THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUN E OF RS.2,18,57,364/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO PARTLY ALLOWED THE CLAIM OF THE ASSESSEE BUT THE ASSESSEE WAS NOT SATISFIED ON THE GROUND RAISED BEFORE US, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BE FORE US. 4. WE HAVE HEARD THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS GONE THROUGH THE RECORD CAREFULLY. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF DISALLOWANCE OF RS.3,53,029/ - U/S 14A OF THE I.T. ACT, 1 961 R.W. RULE 8D(2)(III). THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ITA. NO. 5540 /M/201 7 A.Y. 2012 - 13 3 INVESTMENT WHICH YIELDED THE EXEMPT INCOME IS LIABLE TO BE CONSIDERED FOR THE PURPOSE OF ASSESSING THE EXPENDITURE TO EARN THE EXEMPT INCOME IN VIEW OF THE PROVISION U/S 1 4A OF THE I.T. ACT, 1961 R.W. RULE 8D(2)(III), THEREFORE, IN THE SAID CIRCUMSTANCES, THE FINDING OF THE CIT(A) IS NOT JUSTIFIABLE AND IS LIABLE TO BE SET ASIDE AND IN SUPPORT OF HIS CONTENTION, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS PLACED RELIANCE UPO N THE LAW SETTLED IN ACIT CIRCLE 17(1) VS. VIREET INVESTMENT (P.) LTD (2017) 82 TAXMANN.COM 415. ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE FINDING OF THE CIT(A), WE FIND THAT THE ISSUE HAS NOT BEEN DECIDED ON THE BASIS OF THE DECISION IN CASE TITLED AS ACIT CIRCLE 17(1) VS. VIREET INVESTMENT (P.) LTD (2017) 82 TAXMANN.COM 415. IT IS NOT IN DISPUTE THAT FOR THE PURPOSE OF DISALLOWANCE OF THE EXPENSES TO EARN THE EXEMPT INCOME, THE INVESTM ENT WHICH YIELDED THE EXEMPT INCOME IS LIABLE TO BE CONSIDERED UNDER THE PROVISION U/S 14A R.W. RULE 8D(2)(III). IN VIEW OF THE SAID CIRCUMSTANCES, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND RESTORED THE ISSUE BEFORE THE AO TO DECIDE THE MATT ER AFRESH IN VIEW OF THE DECISION OF HONBLE ITAT DELHI BENCH IN THE CASE OF ACIT CIRCLE 17(1) VS. VIREET INVESTMENT (P.) LTD. (2017) 82 TAXMANN.COM 415 DELHI TRIBUNAL. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ITA. NO. 5540 /M/201 7 A.Y. 2012 - 13 4 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 30. 01.2019 SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 30. 01.2019 VIJAY / 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