AKANSHA INTERNATIONAL HOLDINGS P. LTD, MUMBAI V. ITO 3(1)(1), MUMBAI

ITA 5728/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1213 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 26-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Section: 14A; 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 5728/M/09 ASSESSMENT YEAR: 2005-06 AKANSHA INTERNATIONAL HOLDINGS (P) LTD., APPELL ANT 51, NARIMAN BHAVAN, NARIMAN POINT, MUMBAI 400 021 (PAN AACCA0213E) VS. INCOME TAX OFFICER, 3(1)(1), RESPONDENT MUMBAI. APPELLANT BY : MR. MADHUR AGARWAL RESPONDENT BY : MR. S.K. SINGH O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDERS OF CIT(A)-XXVIII, MUMBAI, PASSED ON 15.07.20 09 FOR THE ASSESSMENT YEAR 2005-06. 2. THIS APPEAL IS TIME BARRED BY 10 DAYS. AFTER HEA RING THE LEARNED REPRESENTATIVES OF THE PARTIES, THE DELAY O F 10 DAYS IN FILING THE APPEAL IS CONDONED IN THE INTEREST OF JUSTICE. 3. THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS IN RESPECT OF DISALLOWANCE U/S 14A OF THE ACT. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE ENGAGED IN THE BUSINESS OF ACTIVITY OF REAL ESTATE DEVELOPM ENT AND SHARE TRADING. THE AO INVOKED SECTION 14A OF THE ACT, AN D DISALLOWED RS. 1,20,293/-. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO DIRECTED THE AO TO COMPUTE THE DISALLOWANCE AMOUNT IN ACCORDANCE WITH RULE 8D OF INCOME TAX RULES, OF WHICH CALCULAT ION COMES TO RS. 4,48,098/-. 5728/M/09 AKANSHA INTERNATIONAL HOLDINGS PVT. LTD. 2 5. THE LEARNED AR SUBMITTED THAT THE CIT(A) HAS ENH ANCED THE AMOUNT OF DISALLOWANCE WITHOUT PROVIDING OPPORTUNIT Y OF HEARING TO THE ASSESSEE AND WITHOUT ISSUING SHOW CAUSE NOTICE OF THE ENHANCEMENT. HE FURTHER SUBMITTED THAT TO AVOID MUL TIPLE LITIGATION THE ASSESSEE HAS NO OBJECTION IF THE DISALLOWANCE I S RESTRICTED TO RS. 1,20,293/- AS DISALLOWED BY THE AO. 6. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF CIT(A). 7. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. SECTION 14A(2) AND RULE 8D ARE REPRODUCED BELOW:- 14A (2) THE ASSESSING OFFICER SHALL DETERMINE THE AMOU NT OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHI CH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT IN ACCORDANCE WI TH SUCH METHOD AS MAY BE PRESCRIBED, IF THE ASSESSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, IS NOT SATISFIED WITH THE CORRECTN ESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. RULE 8D. (1) WHERE THE ASSESSING OFFICER, HAVING REGARD TO T HE ACCOUNTS OF THE ASSESSEE OF A PREVIOUS YEAR, IS NOT SATISFIE D WITH (A) THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MAD E BY THE ASSESSEE; OR ( ( ( B B B ) ) ) . . . . . . 8. ON READING OF THE ABOVE SECTION 14A(2) AND RULE 8D, I FIND THAT BEFORE INVOKING RULE 8D OF THE IT RULES, THERE MUST BE FIN DING BY THE AO THAT THE AO IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLA IM OF THE EXPENDITURE MADE BY THE ASSESSEE AND T T T H H H E E E C C C L L L A A A I I I M M M M M M A A A D D D E E E B B B Y Y Y T T T H H H E E E A A A S S S S S S E E E S S S S S S E E E E E E T T T H H H A A A T T T N N N O O O E E E X X X P P P E E E N N N D D D I I I T T T U U U R R R E E E H H H A A A S S S B B B E E E E E E N N N I I I N N N C C C U U U R R R R R R E E E D D D . . . A A A F F F T T T E E E R R R E E E X X X A A A M M M I I I N N N A A A T T T I I I O O O N N N O O O F F F T T T H H H E E E M M M A A A T T T E E E R R R I I I A A A L L L , , , T T T H H H E E E A A A O O O F F F O O O U U U N N N D D D T T T H H H A A A T T T R R R S S S . . . 1 1 1 , , , 2 2 2 0 0 0 , , , 2 2 2 9 9 9 3 3 3 / / / - - - I I I S S S D D D I I I S S S A A A L L L L L L O O O W W W A A A B B B L L L E E E . . . T T T H H H E E E C C C I I I T T T ( ( ( A A A ) ) ) D D D I I I R R R E E E C C C T T T E E E D D D T T T H H H E E E A A A O O O T T T O O O F F F O O O L L L L L L O O O W W W R R R U U U L L L E E E 8 8 8 D D D W W W I I I T T T H H H O O O U U U T T T C C C O O O N N N S S S I I I D D D E E E R R R I I I N N N G G G T T T H H H E E E S S S A A A T T T I I I S S S F F F A A A C C C T T T I I I O O O N N N O O O F F F T T T H H H E E E A A A O O O T T T H H H A A A T T T R R R S S S . . . 1 1 1 , , , 2 2 2 0 0 0 , , , 2 2 2 9 9 9 3 3 3 / / / - - - I I I S S S O O O N N N L L L Y Y Y D D D I I I S S S A A A L L L L L L O O O W W W A A A B B B L L L E E E U U U / / / S S S 1 1 1 4 4 4 A A A O O O F F F T T T H H H E E E A A A C C C T T T . . . I I I A A A M M M O O O F F F T T T H H H E E E V V V I I I E E E W W W T T T H H H A A A T T T W W W H H H E E E N N N A A A O O O H H H I I I M M M S S S E E E L L L F F F S S S A A A T T T I I I S S S F F F I I I E E E D D D W W W I I I T T T H H H D D D I I I S S S A A A L L L L L L O O O W W W A A A N N N C C C E E E T T T O O O T T T H H H E E E E E E X X X T T T E E E N N N T T T O O O F F F R R R S S S . . . 1 1 1 , , , 2 2 2 0 0 0 , , , 2 2 2 9 9 9 3 3 3 / / / - - - H H H O O O W W W T T T H H H E E E C C C I I I T T T ( ( ( A A A ) ) ) C C C A A A N N N D D D I I I R R R E E E C C C T T T T T T H H H E E E A A A O O O T T T O O O A A A P P P P P P L L L Y Y Y R R R U U U L L L E E E 8 8 8 D D D O O O F F F I I I T T T R R R U U U L L L E E E S S S . . . E E E V V V E E E N N N O O O T T T H H H E E E R R R W W W I I I S S S E E E A A A L L L S S S O O O T T T H H H E E E C C C I I I T T T ( ( ( A A A ) ) ) H H H A A A S S S N N N O O O T T T P P P O O O I I I N N N T T T E E E D D D O O O U U U T T T W W W H H H Y Y Y H H H E E E W W W A A A S S S N N N O O O T T T S S S A A A T T T I I I S S S F F F I I I E E E D D D W W W I I I T T T H H H T T T H H H E E E D D D I I I S S S A A A L L L L L L O O O W W W A A A N N N C C C E E E O O O F F F 5728/M/09 AKANSHA INTERNATIONAL HOLDINGS PVT. LTD. 3 R R R S S S . . . 1 1 1 , , , 2 2 2 0 0 0 , , , 2 2 2 9 9 9 3 3 3 / / / - - - . . . U U U N N N L L L E E E S S S S S S S S S U U U C C C H H H S S S A A A T T T I I I S S S F F F A A A C C C T T T I I I O O O N N N I I I S S S R R R E E E C C C O O O R R R D D D E E E D D D R R R U U U L L L E E E 8 8 8 D D D C C C A A A N N N N N N O O O T T T B B B E E E A A A P P P P P P L L L I I I E E E D D D . . . A A A P P P A A A R R R T T T F F F R R R O O O M M M O O O T T T H H H E E E R R R T T T E E E C C C H H H N N N I I I C C C A A A L L L I I I T T T I I I E E E S S S A A A N N N D D D T T T O O O A A A V V V O O O I I I D D D M M M U U U L L L T T T I I I P P P L L L E E E L L L I I I T T T I I I G G G A A A T T T I I I O O O N N N , , , A A A N N N D D D A A A L L L S S S O O O C C C O O O N N N S S S I I I D D D E E E R R R I I I N N N G G G T T T H H H E E E P P P E E E C C C U U U L L L I I I A A A R R R F F F A A A C C C T T T S S S O O O F F F T T T H H H E E E C C C A A A S S S E E E , , , I I I S S S E E E T T T A A A S S S I I I D D D E E E T T T H H H E E E O O O R R R D D D E E E R R R O O O F F F C C C I I I T T T ( ( ( A A A ) ) ) A A A N N N D D D R R R E E E S S S T T T O O O R R R E E E T T T H H H A A A T T T O O O F F F O O O R R R D D D E E E R R R O O O F F F A A A O O O . . . 9 9 9 . . . I I I N N N T T T H H H E E E R R R E E E S S S U U U L L L T T T , , , T T T H H H E E E A A A P P P P P P E E E A A A L L L O O O F F F T T T H H H E E E A A A S S S S S S E E E S S S S S S E E E E E E I I I S S S A A A L L L L L L O O O W W W E E E D D D A A A S S S I I I N N N D D D I I I C C C A A A T T T E E E D D D A A A B B B O O O V V V E E E . . . ORDER PRONOUNCED IN THE OPEN COURT ON 12.07.2010. SD/- (A.L. GEHLOT) ACCOUNTANT MEMB ER DATED: 12 TH JULY, 2010. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, SMC BEN CH, I.T.A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INTALS 1. DRAFT DICTATED ON 12.07.2010 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 12.07.2010 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER