Appeal Details
Counselvise Citation
580919914 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 10 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-07-2014
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
D
Next Hearing Date
16-07-2014
Assessment Year
2008-2009
Appeal Filed On
20-09-2012
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) . . , , ./I.T.A. NO. 5736/MUM/2012 ( ! ' # / ASSESSMENT YEAR :2008-09) 3DPLM SOFTWARE SOLUTIONS LTD., PLANT NO.6, PIROJSHANAGAR, VIKHROLI, MUMBAI-400079 / VS. INCOME TAX OFFICER , RANGE 10(2)(3), R NO.430, 4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( $% / APPELLANT) .. ( &'$% / RESPONDENT) ./I.T.A. NO. 5809/MUM/2012 ( ! ' # / ASSESSMENT YEAR :2008-09) INCOME TAX OFFICER RANGE 10(2)(3), 431, 4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 / VS. 3DPLM SOFTWARE SOLUTIONS LTD., PLANT NO.6, PIROJSHANAGAR, VIKHROLI, MUMBAI-400079 ( $% / APPELLANT) .. ( &'$% / RESPONDENT) AND CROSS OBJECTION/ &' NO.241/MUM/2013 IN ./I.T.A. NO.5809/MUM/2012 ( ! ' # / ASSESSMENT YEAR : 2008-09) 3DPLM SOFTWARE SOLUTIONS LTD., PLANT NO.6, PIROJSHANAGAR, VIKHROLI, MUMBAI-400079 / VS. INCOME TAX OFFICER RANGE 10(2)(3), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( $% / APPELLANT) .. ( &'$% / RESPONDENT) I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 2 $ ./ ( ./PAN/GIR NO. : AAACZ1421B $% ) / ASSESSEE BY : SHRI FALEE H BILIMORIA &'$% * ) /REVENUE BY : SHRI SANJEEV JAIN + , * - . / DATE OF HEARING : 16.7.2014 /0#' * - . /DATE OF PRONOUNCEMENT : 31 .7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS AND THE CROSS-OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 01.06.2012 PASSED BY LD CIT(A) AND THEY RELATE TO THE ASSESSMENT YEARS 2008-09. 2. IN THE APPEAL BY THE REVENUE, THE DECISION OF LD . CIT(A) IN HOLDING THAT THE INSURANCE EXPENSES AND TELECOMMUNICATION EXPENSES A RE NOT REQUIRED TO BE DEDUCTED FROM THE EXPORT TURNOVER FOR COMPUTING DED UCTION U/S 10A OF THE ACT, IS BEING ASSAILED. 3. THE LD CIT(A), WHILE DECIDING THE ISSUE IN THE MANNER CITED IN PARAGRAPH 2, DID NOT ADJUDICATE THE ALTERNATIVE CONTENTION UR GED THE ASSESSEE BY CONSIDERING THE SAME AS INFRUCTUOUS. THE ALTERNATI VE CONTENTION URGED BY THE ASSESSEE WAS THAT THE INSURANCE AND TELECOMMUNICATI ON EXPENSES, IF HELD TO BE DEDUCTIBLE FROM EXPORT TURNOVER, SHOULD ALSO BE DED UCTED FROM THE TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 10A OF THE ACT. 4. THE ASSESSEE HAS FILED APPEAL IN RESPECT OF TH E FOLLOWING ISSUES:- (A) DISALLOWANCE OF RS.3,93,572/- MADE BY INVOKING SEC. 14A OF THE ACT WHILE COMPUTING INCOME UNDER NORMAL PROVISIONS OF T HE ACT. I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 3 (B) ADDITION OF RS.3,93,572/- WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. 5. THE FACTS RELATING TO THE ABOVE SAID ISSUES A RE STATED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SOFTWARE DEV ELOPMENT AND IT CLAIMED DEDUCTION U/S 10A OF THE ACT. THE AO NOTICED THAT T HE ASSESSEE HAS DEBITED INSURANCE EXPENSES OF RS.24,19,505/- AND COMMUNICAT ION EXPENSES RS.12,99,006/- IN ITS PROFIT AND LOSS ACCOUNT. HOW EVER, THE ASSESSEE DID NOT DEDUCT THE ABOVE SAID AMOUNTS FROM EXPORT TURNOVER WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. THE AO, BY PLACING RELIANCE O N THE FOLLOWING DEFINITION OF EXPORT TURNOVER GIVEN IN CLAUSE (IV) OF EXPLANATI ON 2 TO SECTION 10A OF THE ACT, OPINED THAT THE ABOVE SAID EXPENSES SHOULD BE DEDUC TED FROM EXPORT TURNOVER:- EXPORT TURNOVER MEANS THE CONSIDERATION IN RESPEC T OF EXPORT BY THE UNDERTAKING OF ARTICLES OR THINGS OR COMPUTER SOFTW ARE RECEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE IN CONVERTIBLE F OREIGN EXCHANGE IN ACCORDANCE WITH SUB-SECTION (3), BUT DOES NOT INCLUDE FREIGHT, TELECOMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF THE ARTICLES OR THINGS OR COMPUTER SOFT WARE OUTSIDE INDIA OR EXPENSES, IF ANY, INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT IT DID N OT INCUR ANY FREIGHT EXPENSES. IT FURTHER SUBMITTED THAT THE TELECOMMUNICATION CHA RGES AND INSURANCE EXPENSES ARE NOT ATTRIBUTABLE TO DELIVERY OF THE COMPUTER SOFTWARE OUTSIDE INDIA . ACCORDINGLY, THE ASSESSEE CONTENDED BEFORE AO THAT THEY ARE NOT REQUIRED TO BE DEDUCTED FROM EXPORT TURNOVER. HOWEVER, THE AO D ID NOT ACCEPT THE SAID SUBMISSIONS AND ACCORDINGLY COMPUTED THE DEDUCTION U/S 10A OF THE ACT BY DEDUCTING THE AMOUNT OF COMMUNICATION CHARGES AND I NSURANCE EXPENSES REFERRED ABOVE FROM THE EXPORT TURNOVER. HOWEVER W HILE DOING SO, THE ASSESSING OFFICER DID NOT DEDUCT THE ABOVE SAID AMOUNT FROM TOTAL TURNOVER. I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 4 6. THE AO NOTICED THAT THE ASSESSEE HAS EARNED D IVIDEND OF RS.15,07,890/- AND CLAIMED THE SAME AS EXEMPT U/S 10(34) OF THE AC T. THE ASSESSEE SUBMITTED BEFORE AO THAT IT HAS USED ONLY ITS SURPLUS FUNDS I N MAKING INVESTMENTS AND ALSO IT DID NOT INCUR ANY EXPENSE IN EARNING THE DIVIDEN D INCOME. THE AO, HOWEVER, DID NOT ACCEPT THE SAID CONTENTIONS AND COMPUTED TH E DISALLOWANCE IS REQUIRED TO BE MADE OUT OF GENERAL EXPENSES IN TERMS OF RULE 8D (2)(III) OF THE ACT AT 0.5% OF THE AVERAGE INVESTMENTS, WHICH WORKED OUT TO RS. 3,93,579/-. THE ASSESSING OFFICER DISALLOWED THE ABOVE SAID AMOUNT U/S 14A OF THE ACT WHILE COMPUTING INCOME UNDER NORMAL PROVISIONS OF THE ACT. THE AO ALSO MADE THE SAID DISALLOWANCE WHILE COMPUTING BOOK PROFIT U/S 115J B OF THE ACT. 7. THE ASSESSEE CHALLENGED THE ORDER PASSED BY TH E AO BY FILING APPEAL BEFORE THE LD CIT(A). WITH REGARD TO THE COMPUTATI ON OF DEDUCTION U/S 10A, I.E., ABOUT THE NECESSITY OF DEDUCTING THE COMMUNICATION AND INSURANCE EXPENSES FROM EXPORT TURNOVER, THE LD CIT(A) NOTICED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY HIS PREDECESSOR IN THE ASSESSEES OWN CASE IN AY 2005-06, 2006- 07 AND 2007-08 AND IT WAS HELD THAT THE TELECOMMUNI CATION AND INSURANCE EXPENSES INCURRED BY THE ASSESSEE WERE NOT ATTRIBUT ABLE TO THE DELIVERY OF COMPUTER SOFTWARE OUTSIDE INDIA AND THEREFORE, THEY WERE NOT REQUIRED TO BE DEDUCTED FROM THE EXPORT TURNOVER FOR WORKING OUT D EDUCTION U/S 10A OF THE ACT. ACCORDINGLY, BY FOLLOWING THE DECISION RENDERED BY HIS PREDECESSOR FOR AY 2005- 06, 2006-07 AND 2007-08, THE LD CIT(A) DIRECTED THE ASSESSING OFFICER NOT TO DEDUCT TELECOMMUNICATION AND INSURANCE EXPENSES FRO M THE EXPORT TURNOVER FOR WORKING OUT DEDUCTION U/S 10A OF THE ACT. THE ASS ESSEE HAD URGED AN I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 5 ALTERNATIVE PLEA BEFORE LD CIT(A) THAT THE INSURANC E AND TELECOMMUNICATION EXPENSES, IF HELD TO BE DEDUCTIBLE FROM EXPORT TURN OVER, SHOULD ALSO BE DEDUCTED FROM THE TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 10A OF THE ACT. AS STATED EARLIER, THE LD CIT(A) DID NOT ADJUDICATE THE ALTER NATIVE CONTENTION BY HOLDING THE SAME AS INFRUCTUOUS. 8. WITH REGARD TO THE DISALLOWANCE MADE U/S 14A O F THE ACT, THE LD CIT(A) NOTICED THAT THERE WAS MOVEMENT IN INVESTMENT PORTF OLIOS, WHICH CONSISTED OF MUTUAL FUND UNITS, I.E., FROM THE OPENING BALANCE O F RS.5.94 CRORES, THE INVESTMENT AMOUNT HAS MOVED UP TO RS.9.80 CRORES AT THE YEAR END. THE LD CIT(A) ALSO NOTICED THAT THE ASSESSEE HAS ALSO SOLD SOME UNITS DURING THE YEAR. THE LD CIT(A) HELD THAT THE ACTIVITIES OF SELLING, PURCHASING OR NOT SELLING THE EXISTING INVESTMENTS REQUIRES DECISION TO BE MADE A T MANAGERIAL LEVEL WHICH IN TURN REQUIRES INCURRING OF ADMINISTRATIVE AND MANAG ERIAL EXPENSES. ACCORDINGLY, THE LD CIT(A) CONFIRMED THE DISALLOWANCE MADE U/S 1 4A OF THE ACT IN THE NORMAL PROVISIONS OF THE ACT. 9. WITH REGARD TO THE ADDITION OF THE AMOUNT DISA LLOWED U/S 14A OF THE ACT TO THE BOOK PROFIT COMPUTED U/S 115JB OF THE ACT, TH E ASSESSEE CONTENDED BEFORE LD CIT(A) THAT THE SAID DISALLOWANCE SHOULD NOT HAV E BEEN MADE, SINCE THE PROVISIONS OF SEC. 115JB IS A SEPARATE CODE BY ITSE LF IS A SEPARATE CODE. HOWEVER, THE LD CIT(A) NOTICED THAT THE CLAUSE (F) OF EXPLANATION 1 TO SEC. 115JB OF THE ACT PROVIDES THAT THE EXPENDITURE RELATABLE TO ANY INCOME TO WHICH SEC. 10 OF THE ACT APPLIES IS REQUIRED TO BE ADDED TO THE B OOK PROFIT. ACCORDINGLY, THE LD CIT(A) DISMISSED THE CLAIM OF THE ASSESSEE. I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 6 10. AGGRIEVED, BY THE ORDER PASSED BY LD CIT(A) , BOTH THE PARTIES HAVE FILED APPEALS / CROSS OBJECTION BEFORE US ON THE ISSUES D ISCUSSED ABOVE. 11. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE REVENUE, WHEREIN THE QUESTION RELATES TO THE DEDUCTION OF TELECOMMUNICAT ION CHARGES AND INSURANCE EXPENSES FROM THE EXPORT TURNOVER FOR COMPUTING DED UCTION U/S 10A OF THE ACT. WE HAVE ALREADY NOTICED THAT THE LD CIT(A) HAD FOLL OWED THE DECISION RENDERED BY HIS PREDECESSOR WHILE DECIDING THIS ISSUE IN FAV OUR OF THE ASSESSEE, I.E., IN THE EARLIER YEARS, THE THEN LD CIT(A) HAD ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THESE EXPENSES WERE NOT ATTRIBUTABLE TO THE DE LIVERY OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA. WE NOTICE THAT TH E IDENTICAL ISSUE CAME TO BE CONSIDERED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO.4932/M/2010; ITA 6003/M/2010 AND ITA 6194/M/ 2011 RELATING TO AY 2005-06, 2006-07 AND 2007-08. 12. IN THE ABOVE SAID YEARS, THE CO-ORDINATE BE NCH OF TRIBUNAL HAS TAKEN THE VIEW THAT THE TELECOMMUNICATION AND INSURANCE EXPEN SES, IF INCURRED IN LOCAL CURRENCY IN INDIA, IS NOT REQUIRED TO BE DEDUCTED F ROM THE EXPORT TURNOVER. HOWEVER ON A CAREFUL PERUSAL OF THE DEFINITION OF T HE TERM EXPORT TURNOVER, WE NOTICE THAT THE RESTRICTIONS THAT THE EXPENDITURE S HOULD BE INCURRED IN FOREIGN CURRENCY WOULD APPLY ONLY TO FOREIGN TECHNICAL SER VICES PROVIDED OUTSIDE INDIA. WITH REGARD TO THE TELECOMMUNICATION AND INSURANCE CHARGES, WHAT IS REQUIRED TO BE DEDUCTED IS THE EXPENSES OF ABOVE SAID NATURE WH ICH IS ATTRIBUTABLE TO THE DELIVERY OF THE ARTICLES OR THINGS OR COMPUTER SOFT WARE OUTSIDE INDIA. THUS A PORTION OF THE TELECOMMUNICATION AND INSURANCE EXPE NSES, WHICH CAN BE ATTRIBUTED TO THE DELIVERY OF COMPUTER SOFTWARE OUT SIDE INDIA, IS REQUIRED TO BE I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 7 DEDUCTED FROM THE EXPORT TURNOVER. BEFORE US, THE LD A.R SUBMITTED THAT THE EXPENSES INCURRED BY THE ASSESSEE ON TELECOMMUNICAT ION AND INSURANCE ARE NOT ATTRIBUTABLE TO THE DELIVERY OF COMPUTER SOFTWARE O UTSIDE INDIA. HOWEVER, THE DETAILS OF THOSE EXPENSES; THE REASONS FOR WHICH TH EY WERE NOT INCURRED ETC. WERE NOT FURNISHED BEFORE US. IN THE ABSENCE OF SU CH KIND OF DETAILS, WE ARE UNABLE TO APPRECIATE THE CONTENTIONS OF THE ASSESSE E. 13. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS I SSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FI LE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE NATURE OF TELECOMMUNIC ATION AND INSURANCE EXPENSES INCURRED BY THE ASSESSEE AND ASCERTAIN WHE THER ANY PORTION OF THOSE EXPENSES CAN BE ATTRIBUTABLE TO THE DELIVERY OF ART ICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA. IF NO PORTION OF THE EXPEN SE CAN BE ATTRIBUTED, THEN NOTHING IS REQUIRED TO BE DEDUCTED FROM THE EXPORT TURNOVER WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. HOWEVER, IF ANY OF THE PORTION OF THOSE EXPENSES IS CONSIDERED AS ATTRIBUTABLE TO THE DELIVERY OF AR TICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA, THEN THAT PORTION IS REQUIR ED TO BE DEDUCTED FROM EXPORT TURNOVER. 14. IN THE CROSS OBJECTION, THE ASSESSEE IS CONTE NDING THAT IF ANY DEDUCTION MADE FROM EXPORT TURNOVER, THEN THE DEDUCTION OF CO RRESPONDING AMOUNT SHOULD BE MADE FROM THE TOTAL TURNOVER ALSO WHILE COMPUTIN G THE DEDUCTION U/S 10A OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT TH E REDUCTION SHOULD BE MADE BOTH FROM THE EXPORT TURNOVER AND FROM TOTAL TURNOV ER. WE NOTICE THAT THE CONTENTION OF THE ASSESSEE GETS SUPPORT FROM THE FO LLOWING DECISIONS:- I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 8 (A) ITO VS. SAKSOFT LTD (313 ITR 353)(SB-CHENNAI) (B) IBS SOFTWARE SERVICES PVT LTD (2011)(137 TTJ (COCH) 54 (C) GEM PLUS JEWELLERY INDIA PVT LTD (223 CTR 248 )(BOM) (D) CIT VS. DELL INTL. SERVICES INDIA (P) LTD (IT A NO.450/2008)(KAR). FOLLOWING THE ABOVE SAID DECISIONS, WE AGREE WITH T HE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DIRECT THE AO TO DEDUCT CO RRESPONDING AMOUNT FROM TOTAL TURNOVER ALSO, IF ANY AMOUNT IS DEDUCTED FROM THE EXPORT TURNOVER. 15. WE SHALL NOW TAKE UP THE APPEAL FILED BY TH E ASSESSEE. AT THE TIME OF HEARING, THE LD A.R FAIRLY ADMITTED THAT THE ISSUE RELATING TO APPLICABILITY OF PROVISIONS OF SEC. 14A OF THE ACT TO THE COMPUTATIO N OF BOOK PROFIT U/S 115JB OF THE ACT HAS SINCE BEEN DECIDED AGAINST THE ASSESSEE BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GOETZE (INDIA) LTD (361 ITR 505). HE FURTHER SUBMITTED THAT THE DECISION RENDERED BY THE CO-ORDINATE BENCH OF MUMBAI ITAT IN THE CASE OF RBK STOCK BROKING (P) LTD (159 TTJ 16) IS NOW UP HELD IN THE CASE OF GOETZE (INDIA) LTD (SUPRA). IN VIEW OF THE ABOVE, WE DISM ISS THE GROUNDS RELATING TO THE ABOVE SAID ISSUE. 16. NOW THE ONLY REMAINING GROUND RELATES TO THE COMPUTATION OF DISALLOWANCE U/S 14A OF THE ACT. THE LD COUNSEL SUBMITTED THAT THE ASSESSEE HAD INVESTED ITS SURPLUS FUNDS IN THE UNITS OF MUTUAL FUNDS IN ORDER TO OPTIMIZE ITS INCOME. HE SUBMITTED THAT THE AO HAS DISALLOWED ONLY GENERAL E XPENSES IN TERMS OF RULE 8D(2)(III) OF THE IT RULES. HE SUBMITTED THE ASSES SEE DID NOT INCUR ANY EXPENSES IN EARNING THE DIVIDEND INCOME AND HENCE NO DISALLO WANCE IS REQUIRED TO BE MADE. WE ALSO HEARD LD D.R ON THIS ISSUE, WHO SUPP ORTED THE ORDER OF LD CIT(A). ON A PERUSAL OF THE ORDERS PASSED BY THE T AX AUTHORITIES, WE NOTICE THAT THE QUANTUM INVESTMENTS MADE BY THE ASSESSEE HAS GO NE UP AT THE END OF THE I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 9 YEAR, WHICH WE HAVE ALREADY NOTICED. FURTHER, THE LD CIT(A) HAS NOTICED THAT THE ASSESSEE HAS LIQUIDATED PART OF INVESTMENTS ALS O DURING THE INSTANT YEAR. HENCE, WE NOTICE THAT THE ASSESSEE HAS CARRIED OUT ACTIVITIES IN RELATION TO THE INVESTMENTS. AT THIS POINT, IT IS PERTINENT TO NO TE THE DECISION RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF MAXOPP INVE STMENT LTD VS. CIT (347 ITR 272), WHEREIN THE HONBLE DELHI HIGH COURT HAS EXPR ESSED THE VIEW THAT THE ASSESSING OFFICER HAS TO FIRST REJECT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXTENT OF EXPENDITURE BY HAVING REGARD TO THE ACCOU NTS OF THE ASSESSEE AND SUCH REJECTION MUST BE FOR DISCLOSED COGENT REASONS. IT IS ONLY THEN THAT THE QUESTION OF DETERMINATION OF EXPENDITURE U/S 14A BY THE ASSE SSING OFFICER WOULD ARISE. IN THE INSTANT CASE, WE NOTICE THAT THE CLAIM OF THE A SSESSEE IS NOT REJECTED BY THE ASSESSING OFFICER AFTER HAVING REGARD TO THE ACCOUN TS OF THE ASSESSEE. HENCE, WE ARE OF THE VIEW THAT THE AO WAS NOT RIGHT IN APPLYI NG THE PROVISIONS OF RULE 8D(2)(III) OF THE IT RULES IN THE INSTANT CASE. AT THE SAME TIME, WE HAVE NOTICED THAT THE ASSESSEE HAS CARRIED OUT INVESTMENT ACTIVI TIES OF PURCHASING, LIQUIDATING ETC. AND HAS ALSO RECEIVED DIVIDEND INCOME. HENCE, THE CONTENTION OF THE ASSESSEE THAT IT DID NOT INCUR ANY EXPENDITURE IS N OT ACCEPTABLE TO US ALSO. HENCE, WE ARE OF THE VIEW THAT IT WOULD BE PROPER T O MAKE DISALLOWANCE OF A PORTION OF GENERAL EXPENSES IN TERMS OF OF SEC. 14A OF THE ACT. ACCORDINGLY, WE ARE OF THE VIEW THAT A ROUND SUM DISALLOWANCE OF RS .25,000/- MAY BE MADE TO TAKE CARE OF SEC. 14A OF THE ACT AND IN OUR VIEW, T HE SAME WOULD MEET THE ENDS OF JUSTICE. WE ORDER ACCORDINGLY. THE ORDER OF LD CIT(A) STANDS MODIFIED ACCORDINGLY. I.T.A. NO. 5736/MUM/2012 I.T.A. NO. 5809/MUM/2012 C0 NO.241/MUM/2013 10 17. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL FILED BY THE ASSE SSEE IS PARTLY ALLOWED. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COUR T ON 31ST JULY, 2014. /0#' + 1 2 3 31ST JULY, 2014 0 * , 4 SD SD ( /SANJAY GARG) ( . . / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER + , MUMBAI: 31ST JULY,2014. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &'$% / THE RESPONDENT. 3. + 6- ( ) / THE CIT(A)- CONCERNED 4. + 6- / CIT CONCERNED 5. 78 &-9! , . 9! ' , + , / DR, ITAT, MUMBAI CONCERNED 6. : , / GUARD FILE. ; + / BY ORDER, TRUE COPY < (ASSTT. REGISTRAR) . 9! ' , + , /ITAT, MUMBAI
Mehul