POSEIDON INVESTMENT COMPANY LTD, MUMBAI V. DCIT 1(2), MUMBAI

ITA 5916/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3540 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 06-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P N DEVDASAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 5916/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. POSEIDON INVESTMENT CO. LTD. DCIT - (1)(2) 199, CHURCHGATE RECLAMATION AAYAKAR BHAVAN, M.K. RO AD MUMBAI 400020 VS. MUMBAI 400020 PAN - AAACP 0139 Q APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI P.N. DEVDASAN O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- I, MUMBAI DATED 25.08.2009. ON THE DATE OF HEARING NON E APPEARED OF BEHALF OF THE ASSESSEE, HENCE THE APPEAL WAS HEARD EXPARTE QUA ASSESSEE. 2. THE ISSUE IN THIS APPEAL IS THE DISALLOWANCE UNDER SECTION 14A. THE A.O. NOTICING THAT ASSESSEE CLAIMED DIVIDEND INCOME OF ` 2,45,541/- AS EXEMPT DISALLOWED 2.5% OF THE SAID AMOUNT AS EXPENS ES TOWARDS EARNING THE SAID INCOME ON AGGREGATE EXPENDITURE OF ` 76,968/- CLAIMED BY THE ASSESSEE IN THE P & L ACCOUNT AT ` 1924. IT WAS THE CONTENTION OF THE ASSESSEE THAT THEY HAVE NOT INCURRED ANY EXPENDITURE BUT THE A.O. RELIED ON THE DECISION OF THE ITAT IN THE CASE OF M/S. GHERZI EASTERN LIMI TED IN ITA NO. 6562/BOM/1994 ON THE ISSUE IN THE CONTEXT OF DEDUCT ION UNDER SECTION 80M. THE MATTER WAS CARRIED TO THE CIT(A) AS GROUND NO. 3 AND THE CIT(A), IN THE COURSE OF APPELLATE PROCEEDINGS, ENHANCED THE D ISALLOWANCE TO ` 62,165/- INVOKING RULE 8D. 3. SINCE THE PROVISIONS OF RULE 8D IS NOT APPLICABLE F OR THE ASSESSMENT YEAR UNDER CONSIDERATION AS HAS BEEN CONSIDERED AND DECIDED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG . CO. LTD. VS. DCIT 328 ITR 81 AND AS THE A.O. HAS TO CONSIDER THE DISA LLOWANCE AT A REASONABLE AMOUNT, THE MATTER IS RESTORED TO THE FILE OF THE A .O. TO CONSIDER THE SAME. IN ITA NO. 5916/MUM/2009 M/S. POSEIDON INVESTMENT CO. LTD. 2 VIEW OF THIS, THE MATTER IS RESTORED TO THE FILE OF THE A.O. TO EXAMINE THE FACTS KEEPING IN MIND THE PRINCIPLES OF LAW AS ESTABLISHE D BY THE JUDICIAL FORUMS AND RE-DETERMINE THE REASONABLE DISALLOWANCE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22 ND DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) I, MUMBAI 4. THE CIT I, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.