ASST CIT 8(3)(OSD), MUMBAI V. AZOFEN P. LTD, MUMBAI

ITA 6033/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71554 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKTHAR
• Assessee Lawyers: DEEPAK TRALSHAWALA
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.6033/M/11 ASSESSMENT YEAR:2007-08 THE DY. COMMISSIONER OF INCOME TAX 8(1), ROOM NO.210, AAYAKAR BHAVAN, M.K. MARG, NEW MARINE LINES, MUMBAI 400 020 VS. M/S. AFOZEN PRIVATE LIMITED, 37/38, L.K. ARCADE, MAROL NAKA, MAROL, ANDHERI (EAST), MUMBAI- 400 059 PAN: AAACA5098F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPAK TRALSHAWALA REVENUE BY : SHRI JAVED AKTHAR, D.R. DATE OF HEARING : 31.10.13 DATE OF PRONOUNCEMENT : 06.11.13 O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2007-08 AGAINST ORDER OF LD. CIT(A) DATED 20.06.11 TAKING T HE FOLLOWING GROUNDS: GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A), FAILED TO INTERPRET THE PROVISIONS OF SECTI ON 14A OF THE INCOME TAX ACT, 1961 AND RULE 8D IN ITS RIGHT PERSP ECTIVE AND TRUE MEANING. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED IN SETTING ASIDE THE ORDER OF THE A.O. AND RESTORING THE ISSUE BACK TO THE A.O. FOR PASSING A FRESH ORDE R AFTER NECESSARY RE-EXAMINATION, IN THE LIGHT OF THE JUDGM ENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AND BOYCE ITA NO.6033.M.11 M/S. AFOZ EN PVT. LTD. 2 MANUFACTURING CO. LIMITED VS. DCIT 328 ITR 81, WHIC H HAS NOT BEEN ACCEPTED BY THE REVENUE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED IN OBSERVING THAT RULE 8D CANNOT BE AP PLIED RETROSPECTIVELY IN THE LIGHT OF GODREJ AND BOYCE MA NUFACTURING CO. LIMITED VS. DCIT 328 ITR 81 WITHOUT APPRECIATIN G THE FACT THAT THEIR LORDSHIPS HAD UPHELD THE CONTENTIONS OF THE UNION OF INDIA THAT RULE 8D IS REASONABLE IN ITS NATURE. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. AT THE TIME OF HEARING LD. D.R. RELIED ON THE OR DER OF THE ASSESSING OFFICER AND WHEREAS LD. A.R. SUBMITTED THAT THE LD. CIT(A) HAS ONLY RESTORED THE MATTER TO THE ASSESSING OFFICER TO RECOMPUTE TH E DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT AS PER LAW AS THE ASSESSING OFFICER HAD MADE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D, T HOUGH IT IS NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASS ESSMENT YEAR 2007-08 IN VIEW OF DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AND BOYCE MANUFACTURING CO. LIMITED VS. DCIT 328 IT R 81. 4. WE OBSERVE THAT THE ASSESSEE HAD GIVEN INTEREST FREE LOAN AND ADVANCES OF RS.21,42,83,427/- AND THE ASSESSING OFFICER CONS IDERED THE SAID INTEREST FREE LOAN AND ADVANCES AS INVESTMENT AND ACCORDINGLY MAD E DISALLOWANCES FOR THE PURPOSE OF SECTION 14A BY APPLYING RULE 8D OF INCOM E TAX RULES WHICH COMES TO RS.13,49,821/-. WE OBSERVE THAT LD. CIT(A ) HAS RESTORED THE MATTER TO THE ASSESSING OFFICER TO APPORTION THE EXPENDITU RE AFTER COMPLYING WITH THE LEGAL REQUIREMENT OF SECTION 14A OF THE ACT; AS RUL E 8D IS NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2007-08 IN VIEW OF DECISION OF HONBLE JURISDICTIONAL JURISDICTIONAL H IGH COURT IN THE CASE OF GODREJ AND BOYCE MANUFACTURING CO. LIMITED (SUPRA). WE ARE OF THE ITA NO.6033.M.11 M/S. AFOZ EN PVT. LTD. 3 CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE O RDER OF LD. CIT(A). FURTHER, WE STATE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH MAY CALL FOR OUR INFERENCE. HENCE, WE REJECT THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT. 5. BEFORE WE PASS THIS ORDER WE MAY STATE THAT WE H AVE NOT MADE ANY OBSERVATION AS TO WHETHER SECTION 14A IS APPLICABLE IN RESPECT OF THE INTEREST FREE LOAN AND ADVANCES GIVEN BY THE ASSESSEE OR NOT AND WHETHER ANY DISALLOWANCE UNDER SECTION 14A COULD BE MADE. THE ASSESSING OFFICER WILL EXAMINE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVI NG DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND WILL PASS A REASONED OR DER. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. ORDER PRONOUNCED ON 06.11.2013. SD/- SD/- (RAJENDRA) (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 06.11.13 * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.