SHAILESH MERCHANT STOCK BROKERS P. LTD, MUMBAI V. ASST CIT CIR 4(2), MUMBAI

ITA 5787/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75225 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: VISHWAS MEHANDOLE
• Keywords: Earning of tax free income; Reasonable cause
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI . . , , BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ./ I.T.A. NO. 5787/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) SHAILESH MERCHANT STOCK BROKERS PVT. LTD. 64/A, 6 TH FLOOR, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI-400 021 / VS. ASST. CIT, CIRCLE 4(2), 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI ./ ! ./PAN/GIR NO. AAACS 7967 H ( ' /APPELLANT ) : ( #$' / RESPONDENT ) ' % & / APPELLANT BY : SHRI VISHWAS MEHANDOLE #$' % & / RESPONDENT BY : SHRI ASHOK SURI ' ( % ) * / DATE OF HEARING : 07.01.2014 +,-. % ) * / DATE OF PRONOUNCEMENT : 07.01.2014 / O R D E R PER R. C. SHARMA, A. M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE EX PARTE ORDER BY THE LD. CIT(A)- 8, MUMBAI DATED 30.11.2011, FOR THE ASSESSMENT YEAR (A.Y) 2008-09. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR TH E DISALLOWANCE MADE U/S.14A AND DECLINING CLAIM OF SETTING OFF OF THE LONG TERM CAP ITAL LOSS (LTCL) AGAINST THE LONG TERM CAPITAL GAINS (LTCG). IT WAS CONTENDED BY THE LD. AR THAT NO EXPENDITURE HAS BEEN INCURRED TO EARN THE EXEMPT INCOME, THEREFORE, NO DISALLOWANCE WAS REQUIRED TO BE MADE. OUR ATTENTION WAS INVITED TO EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT WHICH 2 ITA NO. 5787/MUM/2012 (A.Y. 2008-09) SHAILESH MERCHANT STOCK BROKERS PVT. LTD. VS. ASST. CIT HAD BEEN INCURRED FOR UNDERTAKING THE TRANSACTION O F SHARES ON WHICH TAXES WERE PAID. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER (A .O.) HAS INVOKED THE PROVISION OF RULE 8D WITHOUT GIVING ANY REASON AND WITHOUT IDENT IFYING ANY EXPENSES WHICH COULD HAVE BEEN INCURRED TO EARN THE TAX FREE DIVIDEND IN COME. IT WAS ALSO POINTED OUT THAT THE PROVISIONS OF SECTION 14A R/W RULE 8D WERE NOT APPL ICABLE IN THE CASE OF THE ASSESSEE, AS NO EXPENDITURE HAS BEEN INCURRED TO EARN THE TAX FR EE INCOME. IT WAS ALSO ARGUED BY THE LD. AR THAT THE LD. CIT(A) HAS PASSED THE EX PARTE ORDER WITHOUT GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE, THEREFORE, THE APPEAL SHOULD BE RESTORED TO THE FILE OF THE LD. CIT(A). 3. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFUL LY AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THA T THE LD. CIT(A) HAS CONFIRMED THE ORDER OF THE A.O. BY PASSING THE EX PARTE ORDER. AS PER OUR CONSIDERED VIEW, NOBODY SHOULD BE CONDEMNED UNHEARD. THERE WAS A REASONABLE CAUSE FOR THE ASSESSEE NOT TO APPEAR ON THE DATE FIXED BY THE LD. CIT(A). IN THE INTEREST OF JUSTICE AND FAIR-PLAY, WE RESTORE THE APPEAL BACK TO THE FILE OF THE LD. CIT( A) FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO D IRECTED TO FURNISH THE REQUIRED DOCUMENTS BEFORE THE LD. CIT(A) FOR DECIDING THE IS SUE UNDER APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. /. )0 (1 /) % 2% 345 67 8 ) % ) 9: ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 07, 2 014 SD/- SD/- (VIVEK VARMA) (R. C. SHARMA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' ;/ MUMBAI; <( / DATED : 07.01.2014 3 ITA NO. 5787/MUM/2012 (A.Y. 2008-09) SHAILESH MERCHANT STOCK BROKERS PVT. LTD. VS. ASST. CIT .(../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT 3. ' =) ( ) / THE CIT(A) 4. ' =) / CIT - CONCERNED 5. @ A #)(B1 , * B1. , ' ; / DR, ITAT, MUMBAI 6. A C D / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' ; / ITAT, MUMBAI