SMT USHA SAMANI, MUMBAI V. ITO 17(3)(5), Mumbai

ITA 6554/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4593 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 16-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARISH CHANDRA RAJORE
• Assessee Lawyers: NAVIN MISHRA
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 13; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 6554 /MUM/ 2018 : A.Y : 2013 - 14 SMT. USHA SAMANI 10, PARIJAT, N.S.ROAD MARINE DRIVE MUMBAI 400020 VS. ITO 17(3)(5) ROOM NO.219, 1 ST FLOOR AAYAKAR BHAVAN MUMBAI - 400020 PAN NO: APBPS2174R ASSESSEE BY : SHRI NAVIN MISHRA REVENUE BY : SHRI SARISH CHANDRA RAJORE DATE OF HEARING : 24/02/2020 DATE OF PRONOUNCEMENT : 25 /02/2020 O R D E R PER R .C. SHARMA , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 28, MUMBAI DATED 14/09/2018 FOR A.Y.2013 - 14 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT. 2. IN THIS APPEAL ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF RS.11,06,965/ - MADE U/S.14A R.W.R. 8D OF THE IT ACT. 3. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN TRADING IN SHARES AND SECURITIES, INVESTMENT IN MUTUAL FUNDS ETC., DURING THE YEAR ASSESSEE CLAIMED EXEMPTION IN RESPECT OF DIVIDEND INC OME. DURING THE COURSE OF SCRUTINY PROCEEDINGS, AO FOUND THAT THE ASSESSEE HAS SHOWN DIVIDEND INCOME OF RS.20,61,345/ - AND HAS CLAIMED THE SAME AS EXEMPT U/S. 10(34) OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT MADE ANY DISALLOWANCE ON ACCOUNT OF EXPENSES INC URRED TOWARDS EARNING SUCH EXEMPT INCOME, IN ITA NO. 6554/MUM/2018 SMT. USHA SAMANI 2 VIEW OF SECTION 14A OF THE L.T. ACT, 1961. ACCORDINGLY AO COMPUTED DISALLOWANCE U/S.14A R.W.R . 8D AT RS.11,06,965/ - . BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE DISALLOWANCE. AS PER THE LD. AR, THE AO HAS NOT EXC LUDED THE INVESTMENT ON WHICH ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME, WHILE APPLYING RULE 8D. L D. AR ALSO PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING A.Y.2012 - 13 DATED 13/06/2019, WHEREIN EXACTLY SIMI LAR ISSUE WAS DECIDED BY THE TRIBUNAL AND AO WAS DIRECTED TO EXCLUDE THE INVESTMENT ON WHICH ASSESSEE DID NOT YIELD ANY EXEMPT INCOME. THE PRECISE OBSERVATION OF THE TRIBUNAL IN ITS ORDER DATED 13/06/2019 WAS AS UNDER: - UPON CAREFUL CONSIDERATION, I NOT E THAT CLAIM OF THE ASSESSEE IN THIS CASE IS THAT THE ASSESSEE HAS ALSO NOT EARNED DIVIDEND INCOME ON SOME OF INVESTMENT AND IT IS THE PLEA OF THE ASSESSEE THAT THE SAME SHOULD NOT BE CONSIDERED FOR DISALLOWANCE U/S. 14A. 1 FIND THAT THIS PROPOSITION IS DU LY SUPPORTED BY THE ORDER OF SPECIAL BENCH OF THE ITAT IN THE CASE OF VIREET INVESTMENT PVT. LTD. (58 ITR 313). HENCE I DIRECT THAT INVESTMENT WHICH HAD NOT YIELD ANY DIVIDEND INCOME SHOULD NOT BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF COMPUTATION OF DISALL OWANCE. 4. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR EXCLUDING INVESTMENT ON WHICH THE ASSESSEE HAS NOT RECEIVED ANY EXEMPT INCOME, WHILE COMPUTING DISALLOWANCE U/S.1 4A. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 / 02 /20 20 SD/ - ( PAWAN SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOU NTANT MEMBER ITA NO. 6554/MUM/2018 SMT. USHA SAMANI 3 MUMBAI; DATED 25 / 02 /20 20 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//