DCIT CC 3(1) CEN RG 3, MUMBAI V. WIND WORLD WIND FARMS (KRISHNA) LTD, MUMBAI

ITA 6832/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1125 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 21-11-2016
• Court: TRIBUNAL
• Department Lawyers: SUNIL JHA
• Assessee Lawyers: A K GHOSH
• Keywords: Commercial expediency
• Section: 143(3); 153A; 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 683 2 /MUM/ 201 6 (ASSESSMENT YEAR 20 12 - 1 3 ) DCIT CC - 3(1) CENTRAL RANGE - 3 ROOM NO. 1913/1924 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI - 400021. VS. M/S .WIND WORLD WIND FARMS (KRISHNA) LTD. A - 9, ENERCON TOWER VEERA DESAI ROAD VEERA INDUSTRIAL ESTATE, ANDHERI WEST MUMBAI - 400 053. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACE3529M ASSESSEE BY SHRI A.K. GHOSH DEPARTMENT BY SHRI SUNIL JHA DATE OF HEARING 4 . 5. 201 7 DATE OF PRONOUNCEMENT 4 .5 . 201 7 O R D E R THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 26 - 08 - 2016 PASSED BY LD CIT(A) - 51, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2012 - 13. THE REVENUE IS AGGRIEVED BY THE DECISIO N OF LD CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO U/S 14A OF THE ACT. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF WIND ENERGY. CONSEQUENT TO THE SEARCH OPERATION CONDUCTED IN THE HANDS OF THE ASSESSEE, THE PRESENT ASSESSMENT WAS COMPLETED BY THE AO U/S 153A R.W.S. 143(3) OF THE ACT. THE AO NOTICED THAT THE ASSESSEE HAS MADE INVESTMENTS IN SHARES TO THE TUNE OF RS.352 CRORES AND HAS DISALLOWED A SUM OF RS.2.00 LAKHS ONLY U/S 14A OF THE ACT. IT IS PERTINENT TO NOTE THAT THE ASSESSEE DID NOT RECEIVE ANY DIVIDEND INCOME IN THE INSTANT YEAR. THE AO APPLIED THE PROVISIONS OF RULE 8D OF I T RULES AND ACCORDINGLY COMPUTED THE DISALLOWANCE. THE LD CIT(A) 2 NOTICED THAT THE ASSESSEE HAS MADE ENTIRE INVESTMENT IN THE EQUITY S HARES OF ITS SUBSIDIARY COMPANY, WHICH IS STRATEGIC IN NATURE. ACCORDINGLY, BY FOLLOWING THE DECISION RENDERED BY THE CO - ORDINATE BENCH IN THE CASE OF GARWARE WALL ROPES (ITA NO.5408/M/2012 AND J.M. FINANCIALS LTD (ITA NO.4521/M/2012), THE LD CIT(A) EXPRE SSED THE VIEW THAT THE STRATEGIC INVESTMENTS HAVE TO BE EXCLUDED FOR THE PURPOSE OF COMPUTING DISALLOWANCE U/R 8D. IN THAT CASE, THERE WAS NO REQUIREMENT OF MAKING ANY DISALLOWANCE AND ACCORDINGLY THE LD CIT(A) DELETED THE ADDITION MADE BY THE AO. REVENU E IS AGGRIEVED BY THAT DECISION. 3. I HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE FACT REMAINS THAT THE ASSESSEE DID NOT RECEIVE ANY DIVIDEND DURING THE YEAR UNDER CONSIDERATION. I ALSO NOTICE THAT THE ENTIRE INVESTMENT HAS BEEN MADE IN THE S UBSIDIARY COMPANY NAMED VAYU (INDIA) POWER CORPORATION P LTD AND HENCE THERE IS COMMERCIAL EXPEDIENCY IN MAKING INVESTMENT. UNDER THESE SET OF FACTS, I AM OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 14A OF THE ACT BY FOL LOWING THE DECISION RENDERED BY THE CO - ORDINATE BENCH OF TRIBUNAL. ACCORDINGLY I UPHOLD HIS ORDER. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 4 . 5 . 201 7. SD/ - (B. R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 5 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 3 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI