J. M FIANANCIAL & INVESTMENT CONSULTANCY SERVICES P.LTD, MUMBAI V. DCIT 3(2), MUMBAI

ITA 7020/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2411 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Assessee Lawyers: DR K SHIVARAM

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J, BENC H MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM ./ ITA NO.7020&7021/MUM/2014 ( / ASSESSMENT YEAR :2010-11 & 2011-12) J.M.FINANCIAL & INVESTMENT CONSULTANCY SERVICES PVT. LTD., 5B, CNERGY, 5 TH FLOOR, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI- 400025 VS. DCIT-3(2), MUMBAI ./ ./PAN/GIR NO. : AAACJ 1237 H ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : DR. K.SHIVARAM /REVENUE BY : SHRI K.RAVI KIRAN / DATE OF HEARING : 13/07/2016 /DATE OF PRONOUNCEMENT 22/07/2016 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A), MUMBAI, FOR THE ASSESSMENT YEAR 2010-2011 & 2011-2012. 2. IN BOTH THESE APPEALS, THE COMMON GRIEVANCE OF T HE ASSESSEE RELATES TO DISALLOWANCE MADE U/S.14A READ WITH RULE 8D. 3. LD. AR DREW OUR ATTENTION TO THE SUBMISSIONS FIL ED BEFORE THE CIT(A) WITH REGARD TO STRATEGIC INVESTMENTS MADE BY THE AS SESSEE IN GROUP CONCERNS AND IT WAS CONTENDED THAT IN VIEW OF THE F OLLOWING JUDICIAL PRONOUNCEMENTS NO DISALLOWANCE SHOULD BE MADE WITH RESPECT TO INVESTMENT MADE IN GROUP CONCERNS :- ITA NO.7020&702114 2 I) JM FINANCIAL LTD. (ITA NO.4521/MUM/2012] II) GARWARE WALL ROPES LTD. VS. ADDL.CIT(ITA NO.540 8/MUM/2012] III) ORIENTAL STRUCTURE ENGINEERS (P) LTD. VS. ACIT AFFIRMED BY THE HONBLE DELHI HIGH COURT] 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND T HAT SIMILAR DISALLOWANCE WAS MADE BY THE AO IN THE ASSESSMENT Y EAR 2008-09, WHICH WAS CONFIRMED BY THE CIT(A). ASSESSEE WAS IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.92/MUM/2012 FOR THE ASSESSMENT YEAR 2008-09, VIDE ORDER DATED 1 1-5-2016, DECIDED AS UNDER :- 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND T HAT WHILE COMPUTING DISALLOWANCE UNDER RULE 8D, THE AO HAS NO T EXCLUDED AMOUNT OF STRATEGIC INVESTMENT WHILE COMPUTING AVER AGE INVESTMENT AS PER RULE 8D. AS PER THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF INTERGLOBE ENTERPRISES LTD., ITA NOS.1362&1032/DEL/2013, ORDER DATED 4-4-2014 AND TH E DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF GARW ARE WALL ROPES LTD, STRATEGIC INVESTMENT IS NOT TO BE TAKEN INTO ACCOUNT. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TR IBUNAL, WE RESTORE THE MATTER TO THE FILE OF AO AND DIRECT THE AO TO RECOMPUTE THE DISALLOWANCE UNDER RULE 8D AFTER EXCLUDING STRA TEGIC INVESTMENT OUT OF AVERAGE INVESTMENT SO MADE BY THE ASSESSEE. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDE R CONSIDERATION ARE SAME, WE RESTORE THE MATTER BACK TO THE FILE OF AO FOR COMPUTING DISALLOWANCE U/S.14A IN TERMS OF OBSERVATION MADE H EREINABOVE. WE DIRECT ACCORDINGLY 5. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/ 07/ 2016. SD/ - (SANDEEP GOSAIN) SD/ - (R.C.SHARMA) % / JUDICIAL MEMBER &% / ACCOUNTANT MEMBER MUMBAI ; '( DATED 22/07/2016 . .*/PKM , . / PS ITA NO.7020&702114 3 '()* +*( / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / ( ) / THE CIT(A), MUMBAI. 4. / / CIT 5. 012 3 , 3 , / DR, ITAT, MUMBAI 6. 24 / GUARD FILE. 0 //TRUE COPY//