EAGLE BURGMANN INDIA P.LTD, MUMBAI V. ADDL CIT RG 5(1), MUMBAI

ITA 6165/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55997 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: C D UPASANI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' E ' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 6165/MUM/2010 (ASSESSMENT YEAR: 2007-08) M/S EAGLE BURGMANN INDIA (P) LTD., GAZEB HOUSE, 52, GULMOHAR ROAD, OPP: CROSS ROAD NO.7, JVPD SCHEME, VILE PARLE, WEST MUMBAI 400049 ADDL. COMMISSIONER OF INCOME TAX, RANGE-5(1) ROOM NO.525, 5 TH FLOOR, AAYAKAR BHAVAN, MK ROAD,MUMBAI PAN AABCS 5287 P APPELLANT RESPONDENT APPELLANT BY: MR. C.D. UPASANI RESPONDENT BY: MR. G.P. TRIVEDI, DR DATE OF HEARING: 03/11/2011 DATE OF PRONOUNCEMENT: 18/11/2011 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT (A) DATED 08-07-2010. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN T HE APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF ` 5,69,288/- U/S 14A OF THE INCOME TAX ACT, 1961. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY RECEIVED ` 85,500/- AS INTEREST ON TAX FREE BONDS AND ALSO EAR NED DIVIDEND ON INVESTMENTS AMOUNTING TO ` 37,79,093/- WHICH ARE EXEMPT UNDER THE INCOME TAX ACT. EXPENSES INCURRED TO EARN THESE INC OMES ARE NOT TO BE ITA 6165 OF 2010 EAGLE BURGMANN INDIA P LTD MUMBAI 2 ALLOWED AS DEDUCTION AS PER PROVISIONS OF SECTION14 A OF THE INCOME TAX ACT. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE AS PER PRESCRIBED METHOD I.E. RULE 8D AT ` 5,69,288/- AND DISALLOWED THE SAME. 4. THE LEARNED CIT(A) CONFIRMED DISALLOWANCE ON THE B ASIS OF THE SPECIAL BENCH DECISION OF ITAT IN THE CASE OF DAGA CAPITAL MANAGEMENT PVT. LTD. 26 SOT 603. WE HAVE HEARD THE RIVAL CONTENTIONS. 5. WE NOTICE THAT THE A.O AS WELL AS THE CIT (A) INVOK ED THE PROVISIONS OF RULE 8D. HOWEVER, IN THE CASE OF GODREJ & BOYCE LTD . MFG.CO. VS. DCIT 328 ITR 81 THE HONBLE BOMBAY HIGH COURT HAS HELD THAT APPLICATION OF RULE 8D IS ONLY PROSPECTIVE AND, THEREFORE, THE SAID RULE C ANNOT BE APPLIED TO A.Y. 2007-08. IN THE INTEREST OF JUSTICE, RESPECTFULLY F OLLOWING THE ABOVE DECISION, WE RESTORE THE ISSUE TO THE FILE OF THE A.O TO EXAM INE THE DISALLOWANCE UNDER SECTION 14A CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND THE FACTS OF THE CASE, LAW ON THE SUBJECT AND DECIDE THE ISSUE AFRES H. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON18TH NOVEMBER 2011. SD/- SD/- (VIJAY PAL RAO) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH NOVEMBER 2011 VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI ITA 6165 OF 2010 EAGLE BURGMANN INDIA P LTD MUMBAI 3 BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 3.11.11 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 3.11.11 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 3.11.11 JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 14.11.11 AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 14.11.11 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 18.11.2011 SR. PS/PS 7 FILE SENT TO BENCH CLERK 18.11.2011 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER