VULVAN TRADERS P. LTD, MUMBAI V. ITO 13(3)(3), MUMBAI

ITA 5657/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6747 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN , HON'BLE ACCOUNTANT MEMBER ITA NO . 5657 /MUM/2016 (A.Y : 201 2 - 13 ) M/S. VULVAN TRADERS PVT. LTD., 805, A WING, CORPORATE AVENUE, SONAWALA ROAD, GOREGAON (E) MUMBAI 400 063 PAN NO : AAACV 1603 K V . INCOME TAX OFFICER , WARD 13(3)(3) ROOM NO. 227, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PIYUSH CHATURVEDI DEPARTMENT BY : MS. POOJA SWAROOP DATE OF HEARING : 18 . 04.2018 DATE OF PRONOUNCEMENT : 27 .06 .2018 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 21 MUMBAI DATED 18.07.2016 FOR THE ASSESSMENT YEAR 2012 - 13 . 2. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT , THE LD.CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF .3,67,209/ - MAD E BY THE ASSESSING OFFICE R U/S. 14A R.W. RU LE 8D (2)(III) OF THE ACT. 2 ITA NO.5657/MUM/2016 (A.Y: 2012 - 13) M/S. VULVAN TRADERS PVT. LTD., 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN SO FAR AS THE GROUND NO .2 OF THE GROUNDS OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT , ASSESSEE CONTENDED THAT THE STOCK IN TRADE CANNOT BE CONSIDERED FOR DISALLOWA NCE U/S. 14A OF THE ACT. HE SUBMITTED THAT NOW THIS ISSUE IS DECIDED AGAINST THE ASSESSEE BY THE HON'BLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LTD. V. CIT [ 402 ITR 640 ] . THUS THIS GROUND IS DIS MISSED. 4. COMING TO GROUND NO.3 WHICH IT IS THE CONTENTION OF THE ASSESSEE THAT INVESTMENTS ON WHICH NO TAX FREE INCOME WAS EAR N ED DURING THE YEAR UNDER CONSIDERATION CANNOT BE CONSIDERED FOR CALCULATING THE DISALLOWANCE U/S. 14A AND THIS ISSUE IS NOW DECIDED BY THE SPECIAL BENCH OF THE DELHI TRIBUNAL IN THE CASE OF ACIT V. VIREET INVESTMENTS PRIVATE LIMITED [165 ITD 27] . THUS , RESPECTFULLY FOLLOWING THE SAID DECISION , WE DIRECT THE ASSESSING OFFICER TO CONSIDER ONLY THOSE INVESTMENTS WHICH YIELDED DIV IDEND INCOME FOR THE PURPOSE OF COMPUTING THE DISALLOWANCE UNDER RULE 8D(2)(III) OF THE ACT. IN CASE NO DIVIDEND HAS BEEN RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION THERE SHALL NOT BE ANY DISALLOWANCE U/S. 14A OF THE ACT IN VIEW OF THE D ECISION OF THE HON'BLE BOMBAY HIGH COURT, [NAGPUR BENCH] IN THE CASE OF PR . CIT V. M/S. BALLARPUR INDUSTRIES LIMITED IN ITA.NO. 51 OF 2016 DATED 13.10.2016. THUS , WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE IF ANY 3 ITA NO.5657/MUM/2016 (A.Y: 2012 - 13) M/S. VULVAN TRADERS PVT. LTD., UNDER RULE 8D(2)(III) OF T HE ACT, KEEPING IN VIEW THE DECISIONS OF THE HON'BLE BOMBAY HIGH COURT AS WELL AS THE SPECIAL BENCH OF THE TRIBUNAL. THIS GROU ND IS DISPOSED OFF ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 27 TH JUNE , 2018 . SD/ - SD/ - ( N. K. PRADHAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED . 27/ 06 / 2018 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM