MADHUR INDER TEKCHANDANEY, MUMBAI V. DCIT 19(3), MUMBAI

ITA 6514/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9822 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: VINAY SINHA LD
• Keywords: Business income; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

ITA NO 6514/MUM/2016 MAHDU INDER TEKCHANDANEY ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 6514/MUM/2016 ( / ASSESSMENT YEAR: 2010-11) MADHUR INDER TEKCHANDANEY 401,AVINASH CHSL ROAD NO.3, UNION PARK, KHAR(W) MUMBAI 400 052 / VS. DEPUTY COMMISSIONER OF INCOME TAX 9(3) PIRAMAL CHAMBERS, LALBAUG MUMBAI -400 012 ! ./ ./PAN/GIR NO. AACPT-2510-Q ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : VINAY SINHA, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 23 /08/2017 ITA NO 6514/MUM/2016 MAHDU INDER TEKCHANDANEY ASSESSMENT YEAR 2010-11 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-33 [CIT(A)], MUMBAI DATED 02/08/2016 QUA CONFIRMATION OF DISALLOWANCE U/S 14A FOR RS.98,333/-. 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN TRADING OF SHARES WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 26/03/2013 WHERE THE INCOME OF THE ASSESSEE WAS DET ERMINED AT RS.1,02,02,690/- AFTER DISALLOWANCE OF RS.1,92,176/ - U/S 14A AS AGAINST RETURNED INCOME OF RS.1,00,10,520/- FILED BY THE AS SESSEE ON 14/10/2010. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE EARNED NET PROFIT OF RS.98,333/- FROM TRADING OF SH ARES AND EARNED EXEMPT INCOME FROM INVESTMENT WHICH CALLED FOR DISA LLOWANCE U/S 14A. THE ASSESSEE CONTENDED THAT IT HAD CLAIMED ONLY AN AMOUNT OF RS.20,000/- AS EXPENDITURE TOWARDS LEGAL AND ACCOUNTING CHARGES IN THE PROFIT & LOSS ACCOUNT WHICH WERE NOT RELATABLE TO E ARNING OF EXEMPT INCOME AND HENCE NO DISALLOWANCE WAS CALLED FOR U/S 14A. HOWEVER, NOT CONVINCED, LD. AO WORKED OUT DISALLOWANCE U/S 14A READ WITH RULE 8D(2)(III) @0.5% OF AVERAGE INVESTMENT WHICH CAME TO RS.1,92,1 76/-. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD CIT(A) VIDE IMPUGNED ORDER DATED 02/08/20 16 WHO CONFIRMED ITA NO 6514/MUM/2016 MAHDU INDER TEKCHANDANEY ASSESSMENT YEAR 2010-11 3 THE STAND OF LD. AO. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] DREW OU R ATTENTION TO THE FACT THAT THE ASSESSEE WAS TRADER IN SHARES WHICH W AS ASSESSED AS BUSINESS INCOME. THE ASSESSEE CLAIMED EXPENDITURE OF RS.20,000/- TOWARDS LEGAL AND ACCOUNTING CHARGES WHICH WERE NOT RELATABLE TO EARNING OF EXEMPT INCOME. FURTHER, THE ASSESSEE HAS SUFFERED DISALLOWANCE OF RS.1,92,176/- AS AGAINST RS.20,000/ - EXPENSES CLAIMED BY HIM, WHICH WAS NOT JUSTIFIED. PER CONTRA , LD. DR PLACED RELIANCE ON THE STAND OF LOWER AUTHORITIES. 6. HEARD AND PERUSED RELEVANT MATERIAL ON RECORD. I T IS NOTICED THAT THE ASSESSEE HAS DEBITED ONLY RS.20,000 IN THE PROF IT & LOSS ACCOUNT AND SUFFERED DISALLOWANCE OF RS.1,92,176/- AGAINST THE SAME, WHICH WAS NOT, AT ALL, JUSTIFIED. MOREOVER, THE SHARE TRADING INCOME WAS ASSESSED AS BUSINESS INCOME. THE REVENUE COULD NOT CONTROVERT THE STAND OF THE ASSESSEE THAT EXPENSES CLAIMED BY THE ASSESSEE TOWA RDS LEGAL AND ACCOUNTANCY CHARGES WERE NOT RELATED WITH EARNING OF EXEMPT INCOME. THEREFORE, BY DELETING THE IMPUGNED ADDITIONS OF RS .1,92,176/-, WE ALLOW ASSESSEES APPEAL. 7. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23. 08.2017 SR.PS:- THIRUMALESH ITA NO 6514/MUM/2016 MAHDU INDER TEKCHANDANEY ASSESSMENT YEAR 2010-11 4 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI