SUASHISH DIAMONDS LIMITED, MUMBAI V. ACIT- RG- 5(3)(2), MUMBAI

ITA 7154/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3540 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 12-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V IJAYKUMAR G SUBRAMANYAM
• Assessee Lawyers: DR SHIVRAM
• Keywords: Earning of tax free income; Assessment record; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NOS.7154 & 7155/M/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 M/S. SAUSHISH DIAMONDS LTD., 11 TH FLOOR, MEHTA MAHAL, 15 MATHEW ROAD, OPERA HOUSE, MUMBAI 400 004 PAN: AAACS8246H VS. ASSISTANT COMMISSIONER OF INCOME TAX- TAX RANGE 5(3)(2), 5 TH FLOOR, ROOM NO.519, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : DR. SHIVRAM, A.R. & SHRI RAHUL HAKANI, A.R. REVENUE BY : SHRI VIJAYKUMAR G. SUBRAMANYAM, D.R . DATE OF HEARING : 26.03.2021 DATE OF PRONOUNCEMENT : 07.06.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY TH E ASSESSEE AGAINST THE ORDER DATED 30.08.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13 & 2 013-14. ITA NO.7154/M/2018 A.Y. 2012-13 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE O RDER OF LD. CIT(A) IN SUSTAINING THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: ITA NOS.7154 & 7155/M/2018 M/S. SAUSHISH DIAMONDS LTD. 2 THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS)-1 0, MUMBAI [THE CIT-A] HAS ERRED IN LAW AND IN CIRCUMSTANCES OF THE CASE IN NO T ADMITTING THE ADDITIONAL GROUND ON ACCOUNT OF THE SUO-MOTO CALCULATION OF DISALLOWA NCE UNDER SECTION 14A OF THE ACT COMPUTED BASED ON THE HONBLE MUMBAI ITAT ORDER IN THE APPELLANTS OWN CASE FOR AY 2008-09 & AY 2009-10 4. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND OF APPEAL VIDE LETTER DATED 17.11.2020 WHICH IS REPRODUCED AS UNDE R: THE LEARNED CIT(A) ERRED IN NOT RESTRICTING DISALL OWANCE U/S. 14A R.W. RULE 8D TO RS. 36,88,211/- WITHOUT APPRECIATING THAT DISALLOWA NCE OF RS. 36,88,211/- U/S. 14A IS APPROPRIATE IN THE FACTS OF THE PRESENT CASE AND SAME IS ALSO IN ACCORDANCE WITH ORDER PASSED BY HON'BLE ITAT IN ASSESSEE OWN CASE F OR A.Y. 2009-10. 5. THE LD. A.R. SUBMITTED BEFORE THE BENCH THAT THE ISSUE RAISED IN THE ADDITIONAL GROUND IS A LEGAL ISSUE EM ANATING OUT OF THE ASSESSMENT RECORDS AND DOES NOT REQUIRE FURTHE R VERIFICATION OF FACTS AND SUBMITTED THAT IN VIEW OF THE RATIO LA ID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT 229 ITR 383 (SC), THE SAME MAY KINDLY BE ADMITTED WHICH WAS STRONGLY OPPOSED BY THE LD. D .R.BY SUBMITTING THAT IT WAS NEITHER RAISED BEFORE AO NOR BEFORE CIT(A) AND HENCE MAY BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE NOTE THAT I N THE MAIN GROUND OF APPEAL THE ASSESSEE HAS CHALLENGED THE OR DER OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D AND IN THE ADDITIONAL GROUND THE ASSES SEE CONTENDS THAT THE DISALLOWANCE UNDER SECTION 14A READ WITH R ULE 8D BE RESTRICTED TO RS.36,88,211/- IN VIEW OF THE DECISIO N OF THE CO- ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE IN A.Y. 2009-10. THE ASSESSEE HAS ALSO FILED A COMPUTATION TO THIS EFFECT BEFORE US DURING THE HEARING. WE NOTE THAT ADDITIONAL GROUND RAISED IS VERY MUCH CONNECTED WITH THE MAIN GROUND ITA NOS.7154 & 7155/M/2018 M/S. SAUSHISH DIAMONDS LTD. 3 RAISED BY THE ASSESSEE AND ALL THE FACTS ARE AVAILA BLE ON RECORD. THEREFORE, WE ARE INCLINED TO ADMIT THE SAME FOR AD JUDICATION. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORDS. THE LD. A.R. OF THE ASSESSEE POINTED OUT THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO-ORD INATE BENCH OF THE TRIBUNAL IN THE EARLIER YEAR A.Y. 2008-09 & 2009-10 IN ITA NO.42 & 6865/M/2013 ORDER DATED 23.09.2016 WHEREIN THE CO- ORDINATE BENCH OF THE TRIBUNAL HAS DIRECTED THE AO TO ACCEPT THE WORKING OF SUO-MOTO DISALLOWANCE AS MADE BY THE ASS ESSEE QUA THE EXPENSES INCURRED IN RELATION TO EXEMPT INCOME. IN THE PRESENT CASE BEFORE US SINCE THE FACTS ARE IDENTICA L, WE RESTORE THE ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO VERIFY THE WORKING OF THE ASSESSEE IN RESPECT OF THE DISALLOWA NCE UNDER SECTION 14A OF RS.36,88,211/- AND ALLOW THE SAME IN ACCORDANCE WITH THE DECISION OF THE CO-ORDINATE BENCH OF THE T RIBUNAL IN NO.42 & 6865/M/2013 A.Y. 2008-09 & 2009-10 ORDER DA TED 23.09.2016. CONSEQUENTLY THE ADDITIONAL GROUND RAIS ED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 8. SINCE WE HAVE ALLOWED THE ADDITIONAL GROUND FOR STATISTICAL PURPOSE, THE MAIN GROUND IS NOT BEING ADJUCIATED. ITA NO.7155/M/2018 AY 2013-14 9. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS IDEN TICAL TO THE ONE AS DECIDED BY US ABOVE IN ITA NO.7154/M/2018 FO R A.Y. 2012-13. THEREFORE, OUR FINDING IN ITA NO.7154/M/2 018 FOR A.Y. 2012-13 WOULD, MUTATIS MUTANDIS, APPLY TO THIS APPEAL AS WELL. ACCORDINGLY THE ADDITIONAL GROUND OF APPEAL R AISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ITA NOS.7154 & 7155/M/2018 M/S. SAUSHISH DIAMONDS LTD. 4 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07.06.2021. SD/- SD/- ( AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 07.06.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.