DY. CIT -9(3)(2), MUMBAI V. FUTURE CORPORATE RESOURCES LTD. (FORMERLY KNOWN AS SIMPLETON INVESTRADE PVT. LTD.), MUMBAI

ITA 6590/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4825 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 14-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Assessee Lawyers: DIVYESH FOTARIA
• Keywords: Business income
• Section: 263

Judgement Text

DCIT - ((3)(2) V. FUTURE CORPORATE RESOURCES LTD. /I.T.A. NO. 6590 / MUM /20 1 7 /A.Y. 11 - 1 2 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD , JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 6590 / MUM / 20 17 : ASSESSMENT YEAR : 20 11 - 12 DEPUTY COMMISSIONER OF INCOME - TA CIRCLE 9(3)(2) , 418, AAKAY AR B HAVAN, MUMBAI 400020 VS. M/S. FUTURE CORPORATE RESOURCES LTD. ,( FORMERLY KNOWN AS SIMPLETON INVESTRADE PVT. LTD.) , KNOWLEDGE HOUSE OFF JOGESHWARI - ( EAST ) MUMBAI 400060 PAN:AAJCS3979E APPELLANT RESPONDENT ASSESSEE BY SHRI DIVYESH FOTARIA, A.R. REVENUE BY SHRI B. SRINIVAS, CIT(D.R.) DATE OF HEARING 14.02.2019 DATE OF PRONOUNCEMENT 14.02.2019 ORDER PER O. P. MEENA, AM 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 16 , MUMBAI (IN SHORT THE CIT (A)) DATED 28.08.2017 PERTAINING TO ASSESSMENT YEAR 201 1 - 13 , WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) READ WITH SECTION 263 DTD. 19.09.2016 OF INCOME TAX ACT , 1961 (IN SHORT THE ACT) BY THE DCI T - 9(3)(2) MUMBAI (IN SHORT THE AO). 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER: 1. WHETHER O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE CIT (A) RIGHT IN ACCEPTING THE DECISION OF ITAT QUASHING THE ORDER UNDER SECTION 263 PASSED BY THE PARA. COMMISSIONER OF INCOME - TAX - 9, MUMBAI HOLDING THAT REVISIONARY POWERS UNDER SECTION 263 CANNOT BE EXERCISED BY THE CIT FOR DIRECTING A FULL ENQUIRY TO FIND OUT IF THE VIEW TAKEN BY THE AO IS ERRONEOUS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT (A) RIGHT IN DELETING THE DISALLOWANCE MADE BY THE AO OUT OF EXPENSES CLAIMED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE AO HAS RIGHTLY HELD THAT THE SAID EXPENDITURE HAS BEEN INCURRED FOR IN VESTMENT ACTIVITY DCIT - ((3)(2) V. FUTURE CORPORATE RESOURCES LTD. /I.T.A. NO. 6590 / MUM /20 1 7 /A.Y. 11 - 1 2 PAGE 2 OF 3 WHICH HAS ENTERED IN INCOME EXEMPT FROM TAX AND HENCE WAS NOT ALLOWABLE UNDER THE PROVISIONS OF THE ACT? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT (A) RIGHT IN DELETING THE DISALLOWANCE WITHOUT APP RECIATING THE FACT THAT IF THE ASSESSEE CLAIMED THAT INVESTMENT WAS A STRATEGIC IN NATURE, TH E N THE INCOME SHOULD BE OFFERED AS BUSINESS INCOME INSTEAD OF DIVIDEND INCOME AS DONE BY THE ASSESSEE AND SINCE RULE 8D IS INVOKED , THE DISALLOWANCE H AS TO BE WORK ED OUT AS PER THE PRESCRIBED THEREIN AND THERE IS NO SCOPE FOR ANY VARIATION THEREFROM? 3. THE ABOVE GROUNDS OF APPEAL ARE ARISING FROM ORDER PASSED BY THE LD. CIT (A) APPEAL AGAINST THE ORDER PASSED BY THE AO UNDER SECTION 143 (3) READ WITH SECTION 263 OF THE ACT GIVING EFFECT OF ORDER UNDER SECTION 263 DATED 14.03.2016 PASSED BY THE PR. COMMISSIONER OF INCOME - TAX - 9, MUMBAI . THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE PASSED UNDER SECTION 263 IS STANDS QUASHED BY THE TRIBUNAL VIDE ORDER DATED 12.04.2017 IN I.T.A.NO. 3061/MUM/2016 ( ASSESSMENT YEAR 2011 - 12 ) BY ITAT MUMBAI F BENCH MUMBAI ( COPY OF ORDER FILED) . HENCE, THE PRESENT APPEAL BECO MES INFRUCTUOUS AND ORDER PASSED BY LD. CIT (A) BY HOLDING THAT THE ORDER PASSED BY THE AO UNDER SECTION 143 (3) READ WITH SECTION 263 DOES NOT SURVIVE. THEREFORE, THE LD. CIT (A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. PER CONTRA, LEARNED CIT(D.R. ) RELIED ON THE ORDER OF THE AO. ON QUERY OF BENCH, THE LD. CIT (DR) ALSO SUBMITTED THAT NO MISCELLANEOUS PETITION HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF TRIBUNAL PASSED IN RESPECT OF ORDER U/S. 263 OF PR. CIT - 9 . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ITAT VIDE ORDER DATED ORDER DTD. 12.04.2017 IN I.T.A.NO. 3061/MU M/2016 HAS QUASHED THE ORDER PASSED UNDER SECTION 263 DATED 14.03.2016 BY THE PR. CIT - 9 MUMBA I. THEREFORE, ORDER PASSED IN CONSEQUENCE TO GIVE EFFECT OF SAID DCIT - ((3)(2) V. FUTURE CORPORATE RESOURCES LTD. /I.T.A. NO. 6590 / MUM /20 1 7 /A.Y. 11 - 1 2 PAGE 3 OF 3 ORDER BECOMES INVALID IN LAW AND DOES NOT SURVIVE. THEREFORE, PRESENT APPEAL BECOMES INFRUCTUOUS. HENCE, ACCORDINGLY, DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2019 SD/ - SD/ - (C .N . PRASAD ) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : DATED: 14 , FEBRUARY , 2019/ OPM COPY OF ORDER SENT TO - ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT R EGISTRAR, MUMBAI