RICHIE RICH RESORTS LIMITED, MUMBAI V. INCOME TAX OFFICE 8(1)(2), MUMBAI

ITA 6027/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9131 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Keywords: Rule 8D
• Section: 143(3); 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO . 6027 / MUM . / 2018 ( ASSESSMENT YEAR : 20 12 13 ) RICHIE RICH RESORTS LTD. 4 TH FLOOR, AJMERA HOUSE L.T. MARG, PATHAKWADI MUMBAI 400 002 PAN AAACR4959E . APPELLANT V/S INCOME TAX OFFICER WARD 8(1)(2), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI CHAUDHARY ARUNKUMAR SINGH DATE OF HEARING 05 .09.2019 DATE OF ORDER 25.09.2019 O R D E R AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 21 ST JUNE 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 14 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 12 13 . 2 . WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSES SEE TO REPRESENT THE CASE. ACCORDINGLY, I PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE 2 RICHIE RICH RESORTS LTD. LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 3 . BRIEF FACTS ARE, THE ASSESSEE IS A COMPANY. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 28 TH SEPTEMBER 2012, DECLARING LOSS OF ` 15,51,340. A SSESSMENT IN CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT , VIDE ORDER DATED 27 TH FEBRUARY 2015, D ETERMINING TOTAL INCOME AT ` 14,44,190. AFTER COMPLETION OF THE ASSESSMENT AS AFORESAID, THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 154 OF THE ACT ON 5 TH MARCH 2015, REVISING THE TOTAL INCOME TO ` 16,58,480. THE VARIATION IN TOTAL INCOME WAS DUE T O A FURTHER DISALLOWANCE TO ` 2,26,139, UNDER SECTION 14A R/W RULE 8D. AGAINST THE ORDER PASSED UNDER SECTION 154 OF THE ACT, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 . IN COURSE OF HEARING OF APPEAL, LEARNED COMMISSIONER (APPEALS ) FOUND THAT IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER HAD DISALLOWED EXPENDITURE UNDER SECTION 14A R/W RULE 8D (2)(I) AND UNDER RULE 8D(2)(III). FURTHER, HE FOUND THAT THE SAID DISALLOWANCE MADE IN THE ORIGINAL A SSESSMENT ORDER WAS NOT CONTESTED BY THE ASSESSEE BY FILING ANY APPEAL. WHEREAS, IN THE ORDER PASSED UNDER SECTION 154 OF THE ACT, THE ASSESSING OFFICER HAD MADE A 3 RICHIE RICH RESORTS LTD. FURTHER DISALLOWANCE OF ` 2,26,139, IN RESPECT OF ASSESSEES CLAIM OF STRATEGIC INVESTMENT W HICH AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN MAXOPP INVESTMENT LTD. & ORS. V/S CIT, IS NOT ALLOWABLE. THUS, LEARNED COMMISS IONER (APPEALS) OBSERVED THAT IN THE APPEAL FILED AGAINST THE ORDER PASSED UNDER SECTION 154 OF THE ACT, THE ASSESSEE CAN NOT CHALLENGE THE DISALLOWANCE MADE UNDER SECTION 14A IN THE ORIGINAL ASSESSMENT ORDER. ACCORDINGLY, HE HELD THAT THERE BEING NO ERROR IN COMPUTATION OF INCOME IN THE ORDER PASSED UNDER SECTION 154 OF THE ACT, ASSESSEES APPEAL IS NOT MAINTAINABLE . ACCORDI NGLY, HE UPHELD THE ORDER PASSED UNDER SECTION 154 OF THE ACT. 5 . I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, THE SUBJECT MATTER OF CHALLENGE BEFORE LEARNED COMMISSIONER (APPEALS) IS THE ORDER DATED 19 TH JANUARY 2017, PASSED UNDER SECTION 154 OF THE ACT. THE ONLY VARIATION MADE IN THIS ORDER IS AN AMOUNT OF ` 2,26,139, ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE UNDER SECTION 14A R/W RULE 8D. THEREFORE, THE ONLY DISPUTE WHICH THE ASSESSEE CAN RAISE IS WITH REGARD TO THE VARIATION MADE IN THE IMPUGNED ORDER PASSED UNDER SECTION 154 OF THE ACT. WHEREAS, IT APPEARS FROM THE ORDER OF LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS EVEN DISPUTED THE DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D IN THE ASSESSME NT ORDER PASSED UNDER SECTION 143(3) OF THE ACT AGAINST WHICH THE ASSESSEE DID NOT FILE ANY APPEAL. IT IS FURTHER 4 RICHIE RICH RESORTS LTD. NOTICED THAT THE DISALLOWANCE UNDER SECTION 14A R/W RULE 8D IN THE IMPUGNED ORDER PASSED UNDER SECTION 154 OF THE ACT WAS MADE SINCE IN THE AS SESSMENT ORDER, THE ASSESSING OFFICER HAD EXCLUDED THE STRATEGIC INVESTMENT FROM THE AVERAGE VALUE OF INVESTMENT WHILE COMPUTING THE DISALLOWANCE. HOWEVER, AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN MAXOPP INVESTMENT LTD. & ORS. (SUPRA), SUCH EXCL USION CANNOT BE MADE ON ACCOUNT OF STRATEGIC INVESTMENT. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUNDS ARE DISMISSED. 6 . IN THE RESULT, APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.09. 2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 25.09.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI