RICH & ROYAL, MUMBAI V. ASST CIT CIR 3, KALYAN

ITA 6559/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6628 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 10-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 142(1); 14A; 143(1); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH , JM I.T.A. NO . 6559 /M/ 20 1 7 & 6560 /M/2017 ( ASSESSMENT YEAR : 201 3 - 1 4 & 2014 - 15 ) RICH & ROYAL ZOJWALLA SHOPPING COMPLEX, AGRA ROAD, KALYAN (W), DIST. THANE - PIN - 301 . VS. ACIT, CIRCLE - 3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN (W), DIST, THANE, PIN - 301. ./ ./ PAN/GIR NO. : AADFR 3357 G ( APPELLANT ) .. ( RESPONDENT ) DATE OF HEARING : 06 . 02 .201 9 DATE OF PRONOUNCEMENT : 27. 0 2 . 201 9 O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE ABOVE MENTIONED APPEALS AGAINST THE DIFFERENT ORDER PASSED BY THE COMMIS S IONER OF INCOME TAX (APPEALS) - 3, NASIK (CAMP - OFFICE - THANE) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 2013.14 - & 2014 - 15 . I.T.A.NO.6560 /M/2017 2 . THE ASSESSEE HAS FILED THE PRESENT A PPEAL AGAINST THE ORDER DATED 05.09 .201 7 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 3, NASIK (CAMP - OFFICE - THANE) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVAN T TO THE ASSESSMENT YEAR 2013 - 14 . ASSESSEE BY: SHRI SUBODH RATNAPARKHI DEPARTMENT BY: SHRI D. G. PANSARI (SR. AR) ITA. NO. 6559 /M/201 7 & 6560 /M/2017 A.Y. 2013 - 14 & 2014 - 15 2 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 ON THE FACTS AND IN LAW, THE HONBLE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.6,60,490/ - MADE U/S 14A OF THE ACT, 1961, WHICH BEING NOT APPROPRIATE BY LAW MAY KINDLY BE DELETED. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR VARY THE GROUNDS OF APPEAL AT ANY TIME BEFORE THE DECISION OF THE APPEAL. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2013 FOR THE A.Y.201 3 - 14 DECLARING TOTAL IN COME TO THE TUNE OF RS.61,01,570/ - . THEREAFTER, THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY, HENCE, THE NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF RETAIL TRADING IN CLOTH IN THE NAME AND STYLE OF M/S. RICH & ROYAL. THE ASSESSEE IS THE AUTHORIZED DEALER FOR RAYMOND BRAND. THE ASSESSEE CLAIMED THE DIVIDEND INCOME IN SUM OF RS.45,375/ - . THE AO APPLIED THE PROVISIONS U/S 14A R.W. RULE 8D OF THE ACT AND ASSESSED THE EXPENDITURE TO EARN THE EXEMPT INCOME IN SUM OF RS.6,60,490/ - . THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.73,65,240/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION RAISED IN VIEW OF THE PROVISIONS U/S 14A R.W. RULE 8D OF THE ACT , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO. 1 ITA. NO. 6559 /M/201 7 & 6560 /M/2017 A.Y. 2013 - 14 & 2014 - 15 3 5 . UNDER THIS ISSUE THE ASSESSEE HAS RAISED THE CONTENTION FOR THE DELETION OF THE ADDITION RAISED IN VIEW OF THE PROVISIONS U/S 14A R.W. RULE 8D OF THE ACT. AT THE TIME OF THE ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED TO RESTRICT THE ADDITION TO THE EXTENT OF EXEMPT INCOME AND IN SUPPORT OF THIS CONTENTION THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. STATE BANK OF PATIALA 99 TAXMANN.COM 286 (SC) AND MAXOPP INVESTMENT LTD. VS. CIT 91 TAXMANN.COM 154 (SC) (2018) . SINCE THE CONTENTION OF THE ASSESSEE IS THAT THE ADDITION RAISED IN VIEW OF THE PROVISIONS U/S 14A R.W. RULE 8D OF THE ACT BE RESTRICT ED TH E DIVIDEND INCOME, THEREFORE, IN VIEW OF THE LAW RELIED BY THE LD. REPRESENTATIVE OF THE ASSESSEE IN THE CASE OF CIT VS. STATE BANK OF PATIALA 99 TAXMANN.COM 286 (SC) AND MAXOPP INVESTMENT LTD. VS. CIT 91 TAXMANN.COM 154 (SC) (2018) . WE RESTRICT THE ADDITI ON U/S 14A R.W. RULE 8D OF THE ACT TO THE EXTENT OF DIVIDEND INCOME. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS HEREBY PARTLY ALLOWED. I.T.A.NO. 6559 /M/201 7 6 . THE FACTS OF THE PRESENT CASE ARE QUITE SIMILAR TO THE FACTS OF THE CASE AS NARRATED ABOVE WHILE DECIDING THE ITA. ITA. NO. 6559 /M/201 7 & 6560 /M/2017 A.Y. 2013 - 14 & 2014 - 15 4 NO.6560 /M/201 7 ABOVE. HOWEVER, THE FIGURE IS DIFFERENT, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME. THE FINDING OF THE APPEAL BEA RING ITA. NO. 6560 /M/201 7 IS QUITE APPLICABLE AS MUTATIS MUTANDIS IN THE PRESENT CASE ALSO . ACCORDINGLY, WE RESTRICT THE ADDITION RAISED IN VIEW OF THE PROVISION U/S 14A R.W. RULE 8D OF THE ACT TO THE EXTENT OF DIVIDEND INCOME. T HE PRESENT APPEAL IS HEREBY PARTLY ALLOWED ON SIMILAR LINES . 7 . IN RESULT, APPEAL S FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE PARTLY ALLOWED . ORDER P RONOUNCED IN THE OPEN COURT ON 27. 02.2019 . SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 27. 02.2019 V IJA Y ITA. NO. 6559 /M/201 7 & 6560 /M/2017 A.Y. 2013 - 14 & 2014 - 15 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI