ESJAY INTERNATIONAL P.LTD, MUMBAI V. ASST CIT 6(2), MUMBAI

ITA 6422/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0646 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 31-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 6422 /M/2013 ASSESSMENT YEAR: 200 9 - 1 0 M/S. ESJAY INTERNATIONAL P VT . LTD., 48, LAXMI INDUSTRIAL ESTATE OFF FURGUSON ROAD, HANUMAN GALI, LOWER PAREL, MUMBAI 400 0 13 PAN: AAACE 1066B VS. THE ASST. COMM. OF INCOME TAX 6(2), AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : S HRI NISHANT THAKKAR , A.R. REVENUE BY : SHRI NEIL PHILIP, D.R. DATE OF HEARING : 23.03. 201 5 DATE OF PRONOUNCEMENT : 27.05. 2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER D ATED 10.09.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009 - 10 . 2. THE ONLY ISSUE TAKEN BY THE ASSESSEE, THROUGH ITS GROUNDS OF APPEAL, IS RELATING TO THE DISALLOWANCE OF RS.19,83,869 / - UNDER SECTION 14A READ WITH RULE 8D AS AGAINST THE SUO - MOTO DISALLOWANCE OF RS.8,17,384/ - OFFERED BY THE ASSESSEE. THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO), WHILE MAKING DISALLOWANCE UNDE R SECTION 14A, HAS NOT CONSIDERED THE SUO - MOTO DISALLOWANCE OFFERED BY THE ASSESSEE. HE HAS NOT CONSULTED THE ACCOUNTS OF THE ASSESSEE IN RELATION TO THE ITA NO.6422/M/2013 M/S. ESJAY INTERNATIONAL PVT. LTD. 2 DISALLOWANCE OFFERED BY THE ASSESSEE AND HAS STRAIGHTWAY APPLIED RULE 8D. THE LD. A.R. HAS FURTHER R ELIED UPON THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR A.Y. 2008 - 09 WHEREIN THE TRIBUNAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HAS RESTRICTED THE DISALLOWANCE TO THE EXTENT IT WAS SUO - MOTO COMPUTE D AND OFFERED BY THE ASSESSEE. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAS NOT FOLLOWED THE GUIDELINES OF OBJECTIVE SATISFACTION AS LAID DOWN BY THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. VS. DCIT [(2010) 328 ITR 81 (BOM)] WHILE MAKING THE DISALLOWANCE . HE WITHOUT RECORDING ANY REASONING FOR HIS DISSATISFACTION WITH REGARD TO THE WORKING/CLAIM OF THE ASSESSEE, STRAIGHTWAY APPLIED RULE 8D AGAINST THE MANDATE OF THE PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT. 4 . SO KEEPING IN VIEW OF THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTORE THIS ISSUE BACK TO T HE FILE OF THE AO WITH A DIRECTION THAT THE AO WILL GIVE OPPORTUNITY TO THE ASSESSEE TO PLACE ON RECORD ALL THE RELEVANT FACTS INCLUDING ITS ACCOUNTS AND THEN EXAMINE THE COMPUTATION/CALCULATION MADE IN THIS REGARD BY THE ASSESSEE HAVING REGARD TO THE ACCO UNTS OF THE ASSESSEE. THE AO WILL BE AT LIBERTY TO CALL FOR ANY RECORD/EVIDENCES OR STATEMENT ETC. FROM THE ASSESSEE AS MAY BE REQUIRED BY HIM FOR DECIDING THE ISSUE UNDER CONSIDERATION. THE AO, THEREAFTER, WILL DECIDE THE ISSUE AFRESH IN THE LIGHT OF TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. VS. DCIT (SUPRA) BY WAY OF A SPEAKING ORDER. ITA NO.6422/M/2013 M/S. ESJAY INTERNATIONAL PVT. LTD. 3 5 . THE APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN COURT ON 27.05. 201 5 . SD/ - SD/ - ( R.C. SHARMA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.05.2015 . * KISHORE , SR. P.S. COPY TO: THE APPEL LANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.