D.C.I.T., CIRCLE 3(1), MUMBAI V. M/S. BAJAJ AUTO HOLDINGS LTD., PUNE

ITA 6610/MUM/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3930 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-11-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 14-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARESH K BALODIA
• Assessee Lawyers: CHARUL TOPRANI
• Keywords: Rule 8D; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI R.S. PADVEKAR (JM ) I.T.A.NO.6610/MUM/2008 (A.Y. 2004-05) DY. COMMR. OF INCOME-TAX, CIR. 3(1), ROOM NO.607, 6 TH FLOOR, AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. VS. M/S. BAJAJ AUTO HOLDINGS LTD., MUMBAI PUNE ROAD, AKURDI, PUNE-411035. PAN: AAACB4515C. APPELLANT RESPONDENT I.T.A.NO.6836/MUM/2008 (A.Y. 2004-05) M/S. BAJAJ AUTO HOLDINGS LTD., MUMBAI PUNE ROAD, AKURDI, PUNE-411035. PAN: AAACB4515C. VS. DY. COMMR. OF INCOME-TAX, CIR. 3(1), ROOM NO.607, 6 TH FLOOR, AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. APPELLANT RESPONDENT DEPARTMENT BY MR. NARESH K. BALODIA. ASSESSEE BY MR.KIRIT KAMDAR & MS.CHARUL TOPRANI. O R D E R PER R.S. SYAL, AM : THESE CROSS APPEALS ONE BY THE DEPARTMENT AND THE OTHER BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE CIT (A) ON 08-08-2008 IN RELATION TO THE ASSTT. YEAR 2004-05. 2. THE ONLY ISSUE RAISED IN BOTH THE APPEALS IS AG AINST THE DISALLOWANCE U/S.14A OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INVESTMENT COMPANY. IT RECEIVED DIVIDEND INCOME OF RS.1,41,27, 537/- WHICH WAS CLAIMED AS EXEMPT. NO DISALLOWANCE WAS OFFERED U/S.14A OF THE ACT. THE AO MADE ITA 6610 & 6836M/08 BAJAJ AUTO HOLDINGS LTD. 2 DISALLOWANCE TO THE TUNE OF RS.41,03,244/- TOWARDS INTEREST AND OTHER EXPENSES. WHEN THE MATTER CAME UP BEFORE THE LD. CIT(A), HE R EDUCED THE DISALLOWANCE TO A SUM OF RS.25,00,000/-, THEREBY ALLOWING RELIEF IN P ART. BOTH THE SIDES ARE IN APPEAL BEFORE US IN RESPECT OF THEIR RESPECTIVE STA NDS. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED IN THESE A PPEALS IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE MFG. CO. LTD. VS. DCIT (2010) 328 ITR 81 (BOM) IN W HICH IT HAS BEEN HELD THAT DISALLOWANCE IS CALLED FOR U/S.14A IN SUCH CIRCUMST ANCES. HOWEVER, THE MANNER OF COMPUTATION OF SUCH DISALLOWANCE HAS BEEN RESTORED TO THE FILE OF AO FOR MAKING A REASONABLE DISALLOWANCE WHILE HOLDING THAT THE PR OVISIONS OF RULE 8D ARE NOT APPLICABLE. RESPECTFULLY FOLLOWING THE PRECEDENT, W E SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO COMPUTE DISALLOWANCE U/S.14A I N ACCORDANCE WITH THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE AFORENOTED CASE OF GODREJ & BOYCE LTD. 5. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 04TH DAY OF NOVEMBER, 2010. SD/- SD/- (R.S. PADVEKAR) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 04TH NOVEMBER , 2010. NG: COPY TO : ITA 6610 & 6836M/08 BAJAJ AUTO HOLDINGS LTD. 3 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XXVII,,MUMBAI. 4 CIT,CITY-3,MUMBAI. 5.DR,B BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA 6610 & 6836M/08 BAJAJ AUTO HOLDINGS LTD. 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 1-11-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 1-11-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER *