ACIT 3(2)(1), MUMBAI V. MUKUND GLOBAL FINANCE LTD, MUMBAI

ITA 6360/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1009 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M A GOHEL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL IBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & RAVISH SOOD, JUDICIAL MEMBER ./I.T.A./6360/MUM/2016 , /ASSESSMENT YEAR: 2011-12 ACIT-3(2)(1) ROOM NO.608, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. VS. MUKUND GLOBAL FINANCE LTD. 3 RD FLOOR, BAJAJ BHAVAN 226, JAMNABHAI BAJAJ MARG, NARIMAN POINT MUMBAI-400 021. PAN:AAACM 8348 N ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI SAURABH KUMAR RAI-CIT-DR ASSESSEE BY: SHRI M.A. GOHEL / DATE OF HEARING: 06/11/2017 / DATE OF PRONOUNCEMENT: 03/01/2018 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 26/07/2016,OF CIT(A)-8, MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE-COMPANY,ENGAGED IN THE BUS INESS OF PROVIDING LOANS AND MAKING INVESTMENTS,CORPORATE FINANCE AND CORPORATE ADVISOR Y SERVICES,FILED ITS RETURN OF INCOME ON 28/09/2011,DECLARING TOTAL LOSS AT RS.74,34,897/-. THE ASSESSING OFFICER (AO)COMPLETED THE ASSESSMENT U/S.143(3) OF THE AC,DETERMINING THE TOT AL INCOME OF THE ASSESSEE AT (-)RS.28.08 LAKHS. 2. FIRST GROUND OF APPEAL IS ABOUT DELETING THE DISALL OWANCE MADE,BY THE AO,U/S.14A R.W.R. 8D OF INCOME TAX RULES,196 (RULES).WE FIND THAT IDE NTICAL ISSUE WAS DECIDED BY THE TRIBUNAL ON 22/8/2017,WHILE DECIDING APPEAL FOR THE AY.2013- 14 (ITA/810/MUM/2017) AND ON 09/ 05/17(ITA/809/MUM/2017-AY.2012-13)IN FAVOUR OF THE ASSESSEE AND AGAINST THE AO.WE ARE REPRODUCING THE GROUNDS OF APPEAL RAISED BY THE AO AND THE ORDER OF THE TRIBUNAL DT. 22/ 08/ 2017. 1..THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 'I. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.42,15,838/- U/S.14A WITHOUT APPRECIATING THE FACT THAT THE AMOUNT OF DISALLOWANCE U/S. I4A OF THE 1.T. ACT, 19 61 HAS TO BE COMPUTED AS PER RULE 8D OF I.T.RULES, 1962 WHEN THE COMPUTATION OF THE ASSESSE E WAS NOT FOUND TO BE CORRECT AND AS HELD IN THE ORDER OF THE HON'BLE HIGH COURT IN THE EASE OF M/S, GODREJ & BOYCC MANUF ACTURING CO. LTD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CLT(A) HAS ERRED IN DELETING THE DISALLOWANCE U/S. 14A TO THE BOOK PROF IT U/S.L 15JB OF THE I. T. ACT. 1961 IGNORING THE DECISIONS OF THE HON'HLE ITAT, MUMBAI IN THE CA SE OF M/S, VIRAJ PROFILES LTD. IN ITA NO.4439/MUM/2013 DATED 21/10/2015 - 46 1TR(T) 626 ( MUMBAI-TRIB.) [2016] AND IN FERANI HOTELS PVT. LTD. IN ITA NO.857/MUM/20L3 DATED 17/11 /2014. 6360/MUM/16-(12-13) MUKUND GLOBAL FINANCE LTD. 2 2. AT THE OUTSET OF THE HEARING, THE LD. AUTHORIZED RE PRESENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED BY REVENUE ARE CO VERED BY THE DECISION OF TRIBUNAL IN ASSESSEE'S OWN CASE FOR AY 2012-13 IN ITA NO. 809/M UM/2017. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE NOT DISPUTED TH E DECISION OF TRIBUNAL IN ASSESSEE'S OWN CASE AND FAIRLY CONCEDED THAT THE ISSUES COVERED IN FAVOUR OF ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE REP RESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE SE EN THAT IN THE ASSESSMENT ORDER FOR AY 2012-13, SIMILAR DISALLOWANCE OF RS.42,15,838/- U/S 14A OF THE ON APPEAL BEFORE THE ID. CIT(A), THE DISALLOWANCE WAS RESTRICTED TO RS.73,47 9/-. AND ON THE APPEAL OF REVENUE BEFORE THE ITAT, THE ORDER OF ID. CIT(A) WAS UPHELD. THE C OORDINATE BENCH OF THE TRIBUNAL PASSED THE FOLLOWING ORDER: '7. I HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND T HAT DISALLOWANCE OF INTEREST WAS DELETED BY CIT(A) AFTER RECORDING A FINDING TO THE EFFECT THAT ASSESSEE'S FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES AND SURPLUS WAS RS.39.32 CRORES WHICH WAS MORE THAN THE INVESTMENT OF RS. 19.84 CRORES. WITH REGAR D TO THE DISALLOWANCE OF OTHER EXPENDITURE, THE CIT(A) AFTER RELYING ON THE DECISI ON OF HON'BLE BOMBAY HIGH COURT AND MUMBAI TRIBUNAL HELD THAT NOTHING WAS POINTED O UT BY THE AO WITH REGARD TO THE CORRECTNESS OF THE CLAIM OF ASSESSEE AS REGARD TO T HE EXPENDITURE IN RELATION TO EXEMPT INCOME. ACCORDINGLY, DISALLOWANCE WAS RESTRICTED TO RS.73,479/-. DETAILED FINDING RECORDED BY CIT(A) ARE AS PER MATERIAL ON RECORD WH ICH HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. ACCORDINGLY I DO NOT FIND ANY REASO N TO INTERFERE IN THE ORDER OF CIT(A).' 4. CONSIDERING THE FACT THAT FACT OF THE AY UNDER CONSIDERATION IS ALSO SIMILAR. THE ASSESSEE HAVE EARNED THE DIVIDEND INCOME OF RS. 50J25A. THE ASSESSEE HAS SUO MOTO DISAVOWED A SUM OF RS.83,727/- U/S. 14A OF THE ACT. THE AO WHILE P ASSING THE ASSESSMENT ORDER DISALLOWED RS. 46,96, J36A UNDER SECTION 14A. THE LD. CIT(A) RESTR ICTED THE DISALLOWANCE WHICH WAS SUO MOTO DISALLOWED BY THE ASSESSEE. THUS, CONSIDERING THE FACT THAT THE IDENTICAL GROUNDS OF APPEAL WAS DECIDED BY THE TRIBUNAL IN .ASSESSEE'S O WN CASE FOR AY 2012-13. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASS ED BY LD. CIT(A) IN DIRECTING THE AO TO ACCEPT THE SUO MOTO DISALLOWANCE U/S 14A OF THE ACT FOR RS . 83,272/-. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. RESPECTFULLY,FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL ,WE DECIDE FIRST GROUND OF APPEAL AGAINST THE AO. 3. SECOND GROUND OF APPEAL IS ABOUT DELETING THE DISAL LOWANCE MADE U/S.14A FOR MAT PURPOSES.IT WAS BROUGHT TO OUR NOTICE THAT THE SPEC IAL BENCH OF THE TRIBUNAL,IN THE CASE OF VIREET INVESTMENT (P.) LTD.(165ITD27),HAS DECIDED T HAT COMPUTATION UNDER CL.(F) OF EXPLANA - TION 1 TO SECTION 115JB(2)HAS TO BE MADE WITHOUT RE SORTING TO THE COMPUTATION, AS CONTEMP - LATED U/S.14A R.W.R.8D.RESPECTFULLY,FOLLOWING ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL (SUPRA),WE DECIDE THE SECOND GROUND AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSE D. . ORDER PRONOUNCED I N THE OPEN COURT ON 3 RD JANUARY, 2018. SD/- SD/- ( /RAVISH SOOD) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 03 .01.2018. 6360/MUM/16-(12-13) MUKUND GLOBAL FINANCE LTD. 3 JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR I BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.