ALCO COMPANY PVT. .LTD, MUMBAI V. ACIT CIR 1(1)(1), MUMBAI

ITA 6320/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8554 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 02-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Assessee Lawyers: TASNEEM VARAWALA
• Keywords: Earning of tax free income; Rule 8D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 6320 /MUM/201 8 ( ASSESSMENT YEAR : 2014 - 15 ) M/S. ALCO COMPANY PVT. LTD. 3 RD FLOOR, RAHIMTOOLA HOUSE 7, HOMJI STREET, FORT MUMBAI 400 001 VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1) AYAKAR BHAVAN, M K ROAD MUMBAI 400 020 PAN/GIR NO. AAACA1031G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY MS. TASNEEM VARAWALA REVENUE BY SHRI MICHAEL JERALD DATE OF HEARING 07 / 01 /2020 DATE OF PRONOUNCEMENT 15 / 01 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6320/MUM/2018 FOR A.Y. 2014 - 15 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 2, MUMBAI IN APPEAL NO. CIT(A) - 2/IT/103 15/2016 - 17 DATED 14/05/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 07/11/2016 BY THE LD. ASST. COMMISSIONER OF INCOME TAX 1(1)(1), MUMBAI (HEREINAFTER REF ERRED TO AS LD. AO). ITA NO .6320/MUM/2018 M/S. ALCO COMPANY PVT. LTD., 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE MADE U/S.14A OF THE ACT R.W.R.8D OF THE RULES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIV AL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD EARNED EXEMPT INCOME IN THE SUM OF RS.23,47,99,599/ - . THE ASSESSEE HAD MADE SUO - MOTO DISALLOWANCE U/S.14A OF THE ACT IN THE SUM OF RS.21,56,725/ - WHICH ADMITTEDLY C OMPRISES OF DISALLOWANCE OF DIRECT EXPENSES IN THE SUM OF RS.5,22,401/ - AND REMAINING TOWARDS INDIRECT EXPENSES. THE LD. AO HOWEVER, PROCEEDED TO MAKE DISALLOWANCE UNDER RULE 8D(2) OF THE RULES UNDER FIRST LIMB FOR RS.5,22,401/ - AND UNDER THIRD LIMB FOR RS .50,52,267/ - . AFTER REDUCING THE DISALLOWANCE ALREADY MADE BY THE ASSESSEE IN THE SUM OF RS.21,56,725/ - , THE LD. AO MADE NET DISALLOWANCE OF RS.34,17,943/ - U/S.14A OF THE ACT IN THE ASSESSMENT. BEFORE US THERE IS NO DISPUTE WITH REGARD TO DISALLOWANCE OF D IRECT EXPENSES MADE IN THE SUM OF RS.5,22,401/ - BY THE LD. AO. THE LD. AR PLACED ON RECORD THE COPY OF THIS TRIBUNALS ORDER IN ITS OWN CASE FOR A.Y.2010 - 11 DATED 30/07/2018 WHEREIN THE ISSUE WAS REMANDED TO THE FILE OF THE LD. AO TO DECIDE IN THE LIGHT O F DECISION OF HONBLE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENTS REPORTED IN 402 ITR 640. BUT WE FIND FROM THE PERUSAL OF THE ASSESSMENT ORDER THAT THE LD. AO HAD DULY CONSIDERED THE ULTIMATE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN MAXOPP INVESTMENTS BY PROPERLY EXCLUDING THE INVESTMENTS MADE IN FOREIGN COMPANIES WHICH WOULD YIELD TAXABLE INCOME WHILE CONSIDERING THE AVERAGE VALUE OF INVESTMENTS FOR THE PURPOSE OF DISALLOWANCE UNDER THIRD LIMB OF RULE 8D(2) OF THE RULES. WE FIND THAT THIS WORKING OF THE LD. AO HAS BEEN UPHELD BY THE LD. CIT(A), WHICH IN OUR CONSIDERED OPINION , DOES NOT WARRANT ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO .6320/MUM/2018 M/S. ALCO COMPANY PVT. LTD., 3 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN COURT ON THIS 15 / 01 /2020 SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 01 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//