ASIA INVESTMENTS P. LTD, MUMBAI V. ACIT CIR 2(1), MUMBAI

ITA 7242/MUM/2010

• Counselvise Citation: 724219914 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 22-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: S L PARAB
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI G.E.VEERABHADRAPPA (PRESIDENT) AND SHRI B.R.MITTAL(JUDICIAL MEMBER) ITA NO.7242/MUM/2010 ASSESSMENT YEAR: 2007 -08 ASIA INVESTMENTS P.LTD., 4 TH FLOOR, MAGNET HOUSE, DOUGALL ROAD, BALLARD ESTATE, MUMBAI. PAN: AAACA 4539 K ACIT, CIRCLE 2(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI S.L.PARAB RESPONDENT BY: C.G.K. NAIR DATE OF HEARING: 4.7.2012 DATE OF PRONOUNCEMENT: 13.7.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2007-08 AGAINST ORDER DATED 17.8.2010 OF LD CIT(A), MUMBAI ON THE FOLLOW ING GROUNDS: 1. THE LD CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF INTEREST AND OTHER ADMINISTRATIVE EXPENDITURE UNDER SEC.14A TO THE TUN E OF RS.3,15,54,737 TREATING IT AS EXPENDED FOR EARNING DIVIDEND WHICH IS EXEMPT FROM TAX U/S.10(33). 2. THE LD CIT(A) FURTHER ERRED IN CONFIRMING THE TR EATMENT OF DIVIDEND INCOME OF RS.1,89,647 AS TAXABLE INCOME WITHOUT ACCEPTING THE FACT THAT THE SAID INCOME WAS EXEMPT FROM TAX UNDER SECTION 10(33). 2. AT THE TIME OF HEARING, LD COUNSEL FOR ASSESSEE SUBMITTED THAT IN RESPECT OF GROUND NO.1, THE DISPUTED AMOUNT IS RS.14,52,866 AS THE ASSESSEE ITSELF DISALLOWED A SUM OF RS.3,15,54,737 AND WHEREAS THE AO HAS MADE D ISALLOWANCE OF RS.3,30,07,603 U/S.14A R.W. RULE 8D OF I.T.RULES, 1962. HE SUBMIT TED THAT LD CIT(A) HAS CONFIRMED THE ACTION OF THE AO. ITA NO.7242/MUM/2010 ASSESSMENT YEAR: 2007 -08 2 3. LD A.R. SUBMITTED THAT THE AUTHORITIES BELOW HAV E APPLIED RULE 8D OF INCOME TAX RULES FOR MAKING THE DISALLOWANCE BUT AS PER THE DE CISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG CO LTD VS D CIT (328 ITR 81), RULE 8D IS APPLICABLE FROM ASSESSMENT YEAR 2008-09 ONWARDS AN D, THEREFORE, ADDITIONAL DISALLOWANCE MADE BY AUTHORITIES BELOW BE DELETED. LD D.R. SUBMITTED THAT THE MATTER COULD GO BACK TO MAKE THE DISALLOWANCE UNDER SECTIO N 14A BY CONSIDERING THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DO ES NOT FORM PART OF TOTAL INCOME. LD A.R. SUBMITTED THAT HE HAS NO OBJECTION TO RESTORE THE MATTER TO THE AO TO DECIDE AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 4. IN VIEW OF ABOVE SUBMISSIONS OF LD REPRESENTATIV ES OF PARTIES, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW BY ALLOWING GROUND NO.1 OF APPEAL BY DIRECTING THE AO TO MAKE DISALLOWANCE AS PER PROVISIONS OF THE ACT AFTE R GIVING DUE OPPORTUNITY TO THE ASSESSEE. 5. IN RESPECT OF GROUND NO.2 OF APPEAL, LD A.R. SUB MITTED THAT THE SAID GROUND IS NOT PRESSED FOR. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 6. IN THE RESULT, APPEAL IS ALLOWED IN PART FOR STA TISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 13 TH JULY , 2012 SD/- (G.E.VEERABHADRAPPA) PRESIDENT SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 13 TH JULY , 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),4, MUMBAI 4. COMMISSIONER OF INCOME TAX, II, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI