NAVYUG KRISHI SADHAN P. LTD, MUMBAI V. DCIT 9(2), MUMBAI

ITA 6409/MUM/2010

• Counselvise Citation: 640919914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH -MUMBAI BEFORE SHRI B.R. MITTAL,(J.M.) AND SHRI RAJENDRA SINGH,(A.M.) ITA NO. 6409/MUM/2010 ASSESSMENT YEAR : 2007-08 NAVYUG KRISHI SADHAN PVT. LTD. ASPEE HOUSE, B.J. PATEL MARG MALAD (W), MUMBAI PIN-400 020. P.A. NO.(AAACN 2326 D) ASSTT. COMMISSIONER OF INCOME TAX 9(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( APPELLANT ) VS. ( RESPONDENT ) APPELLANT BY NONE RESPONDENT BY : : SHRI P.C. MAURYA DATE OF HEARING : 25.1.2012 DATE OF PRONOUNCEMENT : O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D ATED 29.7.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING DISALLOWANCE O F EXPENSES RELATING TO EXEMPT INCOME UNDER SECTION 14A OF THE IT ACT. 2. FACTS IN BRIEF ARE THAT THE AO DURING THE ASSESSMENT P ROCEEDINGS NOTED THAT THE ASSESSEE HAD SHOWN DIVIDEND INCOME OF RS.3, 52,540/- WHICH WAS EXEMPT FROM TAX. HOWEVER, ASSESSEE DID NOT DISALL OW ANY EXPENSES RELATING TO SAID INCOME. AO, THEREFORE, DISAL LOWED EXPENSES FOLLOWING RULE 8D WHICH CAME TO RS.2,17,822/-. IN APP EAL, CIT(A) ITA NO. 6409/M/10 A.Y.07-08 2 CONFIRMED THE ORDER OF AO AGGRIEVED BY WHICH, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE LD. DR, PERUSED THE RECORDS AND CO NSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING DISALL OWANCE OF EXPENSES RELATING TO EXEMPT INCOME UNDER SECTION 14A OF THE IT ACT. UNDER THE PROVISIONS OF SECTION 14(2) AND 14(3), EXPEN SES RELATING TO EXEMPT INCOME ARE REQUIRED TO BE COMPUTED AS PER METHO D PRESCRIBED BY THE GOVERNMENT. THE GOVERNMENT HAS SINCE NOTIFIED THE METHOD IN THE FORM OF RULE 8D W.E.F. 1.4.2008. THE HONBLE BO MBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. VS. DCIT (328 ITR 81) HAVE HELD THAT RULE 8D WAS APPLICABLE ONLY FROM ASSESSMENT YE AR 2008-09 AND IN RESPECT OF PRIOR YEARS, DISALLOWANCE HAD TO BE MA DE ON A REASONABLE BASIS, OF BOTH DIRECT AND INDIRECT EXPENSES AF TER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE, ORDE R OF CIT(A) CONFIRMING THE DISALLOWANCE FOLLOWING RULE 8D CANNOT BE UPHELD AS ASSESSMENT YEAR INVOLVED IS 2007-08. WE, THEREFORE, SET A SIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE FILE O F AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF GODREJ AND BOYCE MF G. CO. VS. DCIT (SUPRA), AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3.2.2012. SD/- SD/- (B.R. MITTAL) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 3.2.2012. JV. ITA NO. 6409/M/10 A.Y.07-08 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.