UDHAV HOLDINGS P. LTD, MUMBAI V. DCIT CIR 3(3), MUMBAI

ITA 6743/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7625 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 22-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: RAJESH CHAMARIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.6743/MUM/2010 (ASSESSMENT YEAR: 2006-07) UDHAV HOLDINGS PRIVATE LIMITED, 11-A, MITTAL CHAMBERS, NARIMAN POINT, MUMBAI -400 021 ...... APPELLANT VS DY. COMMISSIONER OF INCOME-TAX, CIRCLE -3(3), MUMBAI ..... RESPONDENT PAN: AAACU 0808 K APPELLANT BY: SHRI RAJESH CHAMARIA RESPONDENT BY: SHRI D.S. SUNDER SINGH DATE OF HEARING: 13.03.2012 DATE OF PRONOUNCEMENT: 28.03.2012 O R D E R PER R.S. PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-7, MUMBAI DATED 14.06.2010 FOR T HE A.Y. 2006-07. THE ASSESSEE HAS TAKEN THE MULTIPLE GROUNDS BUT THE ONLY ISSUE IS DISALLOWANCE OF ` 6,07,020/- MADE BY THE A.O. INVOKING SEC.14A OF TH E ACT R.W. RULE 8D. 2. THE ASSESSEE COMPANY IS IN THE BUSINESS OF FINAN CE & DEALING IN SHARES. THE ASSESSEE HAS CLAIMED DIVIDEND INCOME O F ` 1,31,82,593/- WHICH WAS CLAIMED AS EXEMPT U/S.10(34) OF THE ACT. THE A.O. MADE DISALLOWANCE OUT OF THE EXPENDITURE CLAIMED BY THE ASSESSEE U/S.14A OF THE ACT WHICH WAS IN VIEW OF THE A.O. ATTRIBUTAB LE FOR EARNING THE DIVIDEND INCOME. THE A.O. APPLIED RULE 8D FOR WORK ING OUT THE DISALLOWANCE AND TO THAT EXTENT THE ASSESSEES INCO ME WAS ENHANCED. 3. WE HAVE HEARD THE PARTIES. IN THE CASE OF DCIT VS. GODREJ AND BOYCE MFG. CO. LTD. 328 ITR 81 (BOM) THE HONBLE HI GH COURT HAS HELD ITA 6743/M/2010 UDHAV HOLDINGS PRIVATE LIMITED 2 THAT RULE 8D IS NOT RETROSPECTIVE IN OPERATION AND HENCE, THE SAME CANNOT BE APPLIED FOR THE A.Y. 2006-07. THE LD. CO UNSEL ARGUED THAT THE ASSESSEE HAS SURPLUS FUNDS TO MAKE THE INVESTME NT. IN OUR OPINION, THIS ISSUE HAS TO GO BACK TO THE A.O. FOR FRESH ADJUDICATION TO DECIDE THE SAME AFTER CONSIDERING THE PRINCIPLES LA ID DOWN IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. (SUPRA). THE A.O . SHOULD ALSO CONSIDER THE CONTENTION OF THE ASSESSEE THAT THE AS SESSEE HAS SUFFICIENT FUNDS OUT OF WHICH THE INVESTMENT IN THE SHARES HAS BEEN MADE. NEEDLESS TO SAY THE A.O. SHOULD GIVE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH MARCH, 2012. SD/- ( B. RAMAKOTAIAH ) ACCOUTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 28TH MARCH, 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-7, MUMBAI. 4) THE CIT-3, MUMBAI. 5) THE D.R. F BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN