GLANCE INVESTMENTS INDIA P.LTD, MUMBAI V. ITO WD 2(1)(4), MUMBAI

ITA 5792/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4238 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 15-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEELIMA V NADKARNI DR
• Assessee Lawyers: MANISH V SHAH
• Keywords: Earning of tax free income
• Section: 14A; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.5792/MUM/2014 ASSESSMENT YEAR-2010-11 GLANCE INVESTMENTS (INDIA) PRIVATE LIMITED, OFFICE NO.2, CRESCENT CHAMBERS, 3 RD FLOOR, 56 TAMARIND LANE, FORT, MUMBAI-400023 / VS. ITO, WARD-2(1)(4), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 PAN NO. AABCG5421D ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY SHRI MANISH V. SHAH ' / REVENUE BY MRS. NEELIMA V. NADKARNI - DR # '$ % !& / DATE OF HEARING : 06/04/2016 % !& / DATE OF ORDER: 07/04/2016 ITA NO5792/MUM/2014 M/S GLANCE INVESTMENTS (INDIA) PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 24/07/2014 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE FIRST GROUND RAISED IN THIS APPEAL PERT AINS TO CONFIRMING THE ADDITION OF RS.41,68,433/- MADE U/S 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) READ WITH RULE-8D OF THE INCOME TAX RULES, 1962 (HEREINAFTER THE RULES). 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI MANISH V. SHAH, CONTENDED THAT NO DIVIDEND INC OME WAS EARNED DURING THE CURRENT YEAR, THEREFORE, THER E SHOULD BE NO DISALLOWANCE. HE RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S WEIZMANN LTD. VS ACIT ( ITA NO.7551/MUM/2012) ORDER DATED 22/04/2015. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR, MRS. NEELIMA V. NADKARNI. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE COMPANY, AT THE RELEVANT TIME , WAS ENGAGED IN FINANCING AND INVESTMENT ACTIVITIES, DEC LARED INCOME OF RS.32,70,396/- AND THE ASSESSMENT U/S 143 (3) OF THE ACT WAS DETERMINED AT RS.74,38,800/- ON 30/03/2 013. WHILE COMING TO THIS CONCLUSION, THE LD. ASSESSING OFFICER DISALLOWED A SUM OF RS.41,68,433/- U/S 14A OF THE A CT ITA NO5792/MUM/2014 M/S GLANCE INVESTMENTS (INDIA) PVT. LTD. 3 R.W.R. 8D OF THE RULES. WE FIND THAT EVEN BEFORE T HE LD. ASSESSING OFFICER AS WELL AS BEFORE THE COMMISSIONE R OF INCOME TAX (APPEAL) , THE CLAIM OF THE ASSESSEE WAS THAT NO EXEMPT INCOME WAS EARNED BY THE ASSESSEE. IDENTICAL PLEA WAS RAISED BEFORE US. SINCE, NO EXEMPT INCOME WAS E ARNED BY THE ASSESSEE, THEREFORE, THERE IS NO QUESTION OF DISALLOWANCE. IN CIT VS GUJARAT NARMADA VALLEY FER TILIZERS COMPANY LTD. (ITA NO.1151 OF 2013), CIT VS SRIDEV ENTERPRISES 192 ITR 165 (KARNATAKA) AND THE BOMBAY BENCH OF THE TRIBUNAL IN GODERY PHILIP INDIA LTD. V S ACIT (ITA NO.7682/MUM/2010) HELD THAT NO DISALLOWANCE U/ S 14A SHOULD BE MADE ON OPENING BALANCE OF INVESTMENT . THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS HERO CYCLES LTD. 323 ITR 518, GUJARAT HIGH COURT IN CIT VS UTI BANK LTD. (215 TAXMAN 8)(GUJ.) AND THE TRIBUNAL IN CIT VS M/S JAYSHREE PETRO CHEMICALS LTD. (ITA NO.7292/MUM/ 2011) HELD THAT, WHERE NO EXPENDITURE HAS BEEN INCU RRED, THERE IS NO QUESTION OF DISALLOWANCE AS PER RULE-8D (2)(III). IN THE PRESENT/CURRENT YEAR, SINCE, NO DIVIDEND INC OME WAS EARNED BY THE ASSESSEE, THEREFORE, THERE IS NO QUES TION OF DISALLOWANCE. WE HOLD SO. 3. THE NEXT GROUND PERTAINS TO ADDITION OF THE SAM E AMOUNT COMPUTED U/S 14A R.W.R. 8D WHILE CALCULATING THE BOOK PROFIT U/S 115JB OF THE ACT. THE CRUX OF ARGUM ENT IS THAT THIS GROUND IS CONSEQUENTIAL TO THE AFOREMENTI ONED GROUND. THE LD. DR DID NOT CONTROVERT THE CONTENTIO N OF THE ASSESSEE. IN THE AFORESAID GROUND, WE HAVE HELD THA T SINCE, ITA NO5792/MUM/2014 M/S GLANCE INVESTMENTS (INDIA) PVT. LTD. 4 THERE WAS NO DIVIDEND INCOME, THEREFORE, THERE IS N O QUESTION OF DISALLOWANCE. IN ACIT VS SPRAY ENGINEE RING DEVICES LTD. (2012) 23 TAXMAN.COM 267 (CHANDIGARH), RELIANCE INDUSTRIAL INFRASTRUCTURE LTD. VS ADDL. CI T (69 & 70/MUM/2009), IT WAS HELD THAT DISALLOWANCE U/S 14A MADE UNDER NORMAL PROVISIONS OF THE ACT CANNOT BE A DDED BACK, WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. IDENTICAL RATIO WAS LAID DOWN IN M/S ESSAR TELEHOLD ING LTD. VS DCIT (ITA NO.3850/MUM/2010). THUS, IT IS CONSEQUENTIAL IN NATURE. FINALLY, APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING 06/04/2016. SD/- SD/- (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ) DATED : 07/04/2016 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. / THE RESPONDENT. 3. + + # ,! ( ) / THE CIT, MUMBAI. 4. + + # ,! / CIT(A)- , MUMBAI, 5. /'01 !2 , + & 23 , # $ / DR, ITA NO5792/MUM/2014 M/S GLANCE INVESTMENTS (INDIA) PVT. LTD. 5 ITAT, MUMBAI 6. 14 5$ / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI