BANG SECURITIES P.LTD, MUMBAI V. DCIT 2(1), MUMBAI

ITA 5835/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1367 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 17-09-2014
• Court: TRIBUNAL
• Department Lawyers: JOTILAKSHMI NAYAK
• Assessee Lawyers: DINKAL HARIYA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.5835/M/2014 (2010 - 2011) M/S. BANG SECURITIES PVT LTD., 20, SONAWALA BLDG, FORT, MUMBAI 400 023. / VS. DCIT - 2(1), AAYAKAR BHAVAN, MUMBAI. ./ PAN : AAACB2269D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. DINKAL HARIYA / RESPONDENT BY : MS. JOTILAKSHMI NAYAK, DR / DATE OF HEARING : 15.03.2017 / DATE OF PRONOUNCEMENT : 07 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 17.9.2014 IS AGAINST THE ORDER OF THE CIT (A) - 4, MUMBAI DATED 17.7.2014 FOR THE AY 2010 - 2011. 2. THE ONLY ISSUE RAISED IN THIS APPEAL RELATES TO THE NET ADDITION OF RS. 70,15,752/ - (IE RS. 90,08,056 RS. 19,92,304/ - ) U/S 14A R.W.S 115JB OF THE ACT. 3. BEFORE US, WITHOUT INSISTING ON THE ISSUE OF MAKING ADDITION U/S 14A WHEN ASSESSMENT IS MADE U/S 115JB OF THE ACT, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SUO MOTTO QUANTIFIED THE DISALLOWANCE AT RS. 19,92,304/ - U/S 14A F THE ACT. FURTHER STATING THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS. 58,95,101/ - LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TOTAL DEBIT IN THE P & L ACCOUNT WORKS OUT TO RS. 41,70,492/ - . THE DISALLOWANCE @ RS. 90,08,056/ - U/S 14A IS MUCH HIGHER THAN THE TOTAL DEBI TS TO P & L ACCOUNT. AO IGNORED THE SUO MOTTO DISALLOWANCES ON ACCOUNT OF STT PAYMENTS OF RS. 21,51,865/ - . 4. AFTER HEARING THE ABOVE SUBMISSIONS OF THE ASSESSEE AND THE ALSO THE LD DR FOR THE REVENUE, WE FIND THAT THE GROUNDS RAISED IN THE APPEAL SHOULD BE REMANDED FOR REWORKING OF THE DISALLOWABLE SUM U/S 14A OF THE ACT. AO IS DIRECTED TO CONSIDER 2 THE EXISTING DECISIONS ON THE ISSUE AND HEAR THE ASSESSEE BEFORE MAKING ANY DISALLOWANCE U/S 14A R.W.S 115JB OF THE ACT. IT IS A SETTLED LEGAL PROPOSITION THAT AVERAGE INVESTMENT NEEDS TO BE ADJUSTED UNDER CERTAIN PECULIAR FACTS AND THE DISALLOWANCE U/S 14A R.W. RUL E 8D OF THE IT RULES, 1962 MAY NOT EX CEED THE TOTAL CLAIM OF EXPENSES IN THE P & L ACCOUNT. AO SHALL RE - COMPUTE THE DISALLOWANCE AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDIN GLY GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT O F 0 7 T H APRIL, 2017. S D / - S D / - ( RAVISH SOOD) ( D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 07.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI