STANDARD GREASES & SPECIALITIES P. LTD, MUMBAI V. DCIT 10(2), MUMBAI

ITA 6705/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1376 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 03-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2011
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO.6705/M/2011 (2009 - 2010) STANDARD GREASES & SPECIALITIES P LTD., 101 KETAN APARTMENTS, 233 R.B. MEHTA MARG, PATEL CHOWK, GHATKOPAR (E), MUMBAI - 077. / VS. DCIT - 10(2), MUMBAI. ./ PAN : AALCS2136B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MAYUR KISNADWALA / RESPONDENT BY : MS. POOJA SWARUP, DR / DATE OF HEARING : 06.03.2017 / DATE OF PRONOUNCEMENT : 07 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.10.2011 IS AGAINST THE ORDER OF THE CIT (A) - 22, MUMBAI DATED 19.04.2011 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. THE ONLY ISSUE RAISED IN THE GROUNDS REVOLVES AROUND THE DISALLOWANCE U/S 14A AMOUNTING TO RS. 45,72,840/ - . IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE AND SUBMITTED THAT THE SAID DISALLOWANCE EXCEEDED THE ENTIRE EXE MPT INCOME AND ALSO MENTIONING THE MATTER IS REQUIRED TO BE SET ASIDE TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH CONSIDERING THE VARIOUS BINDING JUDGMENTS ON THE SUBJECT. IT IS FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, AO / CIT (A ) MAY BE DIRECTED TO CONSIDER THE BINDING JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HDFC BANK LTD VS. DCIT [2016] 383 ITR 529 (BOMBAY) AS WELL AS THE DECISION OF THE ITAT IN THE CASEOF GARWARE WALL ROPES LTD VS. ADDL. CIT IN ITA NOS. 5408/M/2012 AND OTHERS DATED 15.01.2014 FOR THE PROPOSITION THAT THE EXEMPT INCOME RELATABLE TO THE INVESTMENT IN 2 THE SISTER CONCERN IS REQUIRED TO BE EXEMPT WHILE CALCULATING THE AVERAGE INVESTMENT FOR THE PURPOSE OF CLAUSE (III) OF RULE 8D(2) OF THE IT RULES, 1962. 3. O N HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL P LACED BEFORE THE TRIBUNAL, WE FIND THAT THE ASSESSING OFFICERS MADE DISALLOWANCE U/S CLAUSE (II) AND (III) OF THE RULE 8 D(2) OF THE IT RULES, 1962 READ WITH SECTION 14A OF THE IT ACT, 1961. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE MATTER IS REQUIRED TO BE REMANDED TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH IN THE LIGHT OF THE ABOVE CITED DECISIONS ON TH E SUBJECT. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN THE OPEN CO URT ON 0 7 T H APRIL, 2017. S D / - S D / - ( SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 07.04.2017 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI