DCIT 2(2)(2), MUMBAI V. PIVOTAL SECURITIES LTD, MUMBAI

ITA 6270/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8419 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Section: 143(3); 14A; 2

Judgement Text

1 ITA NO.6270/MUM/2016 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.6270 /MUM/2016 (ASSESSMENT YEAR:2012-13) DCIT-2(2)(3), MUMBAI VS M/S PIVOTAL SECURITIES PVT LTD 151, 14 TH FLOOR, MAKER CHAMBER IV JB MARG, NARIMAN POINT, MUMBAI-21 PAN : AAACP3754F APPELLANT RESPONDEDNT APPELLANT BY SHRI RAJAT MITTAL RESPONDENT BY NONE DATE OF HEARING 06-11 -2017 DATE OF PRONOUNCEMENT 10-11-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CITA)-5, MUMBAI DATED 01-07-2016 AND IT PERTAINS TO ASSESSME NT YEAR 2012-13. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY ENGAGED IN THE BUSINESS OF FINANCE AND SERVICES, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 29-09-2012 DECLARING TOTAL INCOME A T RS.84,61,750. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 31-03-2015 D ETERMINING TOTAL INCOME AT RS.1,54,12,686 BY MAKING ADDITION TOWARDS DISALL OWANCE U/S 14A OF THE 2 ITA NO.6270/MUM/2016 INCOME-TAX ACT, 1961. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT (A), THE ASSESSEE SUBMITTED THAT THE AO HAS WORKED OUT DISALLOWANCE U/S 14A BY INVOKING RULE 8D WHICH IS MORE THAN THE EXPENDITURE DEBITED IN THE P&L ACCOUN T. THE ASSESSEE FURTHER SUBMITTED THAT OUT OF TOTAL EXPENDITURE INCURRED FO R THE YEAR OF RS.48,39,732, A SUM OF RS.6,12,996 REPRESENTS LOSS INCURRED UNDER T HE HEAD CAPITAL GAINS, A SUM OF RS.37,55,792 HAS BEEN ADDED BACK IN THE COMP UTATION OF INCOME AND ALSO A SUM O RS.76,702 HAS BEEN DISALLOWED U/S 14A LEAVING BEHIND RS.3,94,242. AS AGAINST THIS, THE AO HAS DETERMINE D DISALLOWANCE TO BE MADE U/S 14A FOR RS.70,27,638 WHICH IS MORE THAN THE EXP ENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE ALSO FILED A COPY OF ITATS ORDER FOR THE ASSESSMENT YEARS 2009-10 & 2010-11 WHEREIN THE ITAT HELD THAT EXPENDITURE TO BE DISALLOWED U/S 14A CANNOT EXCEED THE TOTAL EXPENDIT URE INCURRED BY THE ASSESSEE. THE CIT(A) AFTER CONSIDERING RELEVANT SU BMISSIONS OF THE ASSESSEE OBSERVED THAT EXPENDITURE DISALLOWED U/S 14A CANNOT EXCEED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE, THEREFORE, DIR ECTED THE AO TO DISALLOW EXPENDITURE OF RS.2,94,242 AND DELETED THE BALANCE ADDITION. AGGRIEVED BY THE ORDER OF CIT()A), THE REVENUE IS IN APPEAL BEFORE U S. 3. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD THE LD.DR, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES 3 ITA NO.6270/MUM/2016 BELOW. AT THE TIME OF HEARING, THE LD.DR SUBMITTED THAT THE CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY FOLLOWING ITAT DECISION I N ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2009-10 & 2010-11 WHEREIN THE ITAT HAS DIRECTED THE AO TO RESTRICT DISALLOWANCE TO THE EXTENT OF ACTUAL EXPEN DITURE CLAIMED BY THE ASSESSEE. WE FIND THAT THE CIT(A), BY FOLLOWING IT ATS DECISION IN ASSESSEES OWN CASE FOR EARLIER YEARS OBSERVED THAT EXPENDITUR E TO BE DISALLOWED U/S 14A CANNOT EXCEED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER OF CIT(A) IS EXTRACTED BELOW:- 5. I HAD CONSIDERED THE APPELLANT SUBMISSIONS-IN THIS CASE, ORDER CONSIDERED BY ITAT FOR THE A.Y. 2009-10 AND 2 010-11 IN THE APPELLANT OWN CASE WHERE IT IS HELD THAT APPELLANT' S EXPENDITURE INCURRED U/S. 14A CANNOT EXCEED THE TOTAL EXPENDITU RE CLAIMED BY THE APPELLANT. IN THIS CASE, AFTER ALLOWING THE CRE DIT FOR APPELLANT DISALLOWANCE U/S 14A FOR RS.76,7021-. TOT AL EXPENDITURE CLAIM BY THE APPELLANT IS ONLY RS.3,94, 242/-. SO IN VIEW OF THE ABOVE ITAT DECISION A.O. IS DIRECTED TO DISA LLOW RS.3,94,2421- U/S. 14A AND THE BALANCE AMOUNT IS DE LETED. GROUND OF APPEAL IS PARTLY ALLOWED. 4. FACTS REMAIN UNCHANGED. THE REVENUE FAILED TO BRIN G ON RECORD ANY EVIDENCE TO CONTROVERT THE FINDINGS OF FACT RECORDE D BY THE CIT(A). THEREFORE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF CIT(A) AN D DISMISS THE APPEAL FILED BY REVENUE. 4 ITA NO.6270/MUM/2016 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER, 2017. SD/- SD/- (SAKTIJIT DEY) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 10 TH NOVEMBER, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI