VINEET P. MEHTA, MUMBAI V. ITO 33(3)(5), MUMBAI

ITA 733/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0760 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-02-2017
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: KHYATI MEMAYA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 733 / MUM/20 1 7 ( ASSESSMENT YEAR : 2012 - 13 ) SHRI VINEET P MEHTA 4 TH FLOOR, OM PLAZA VASANJI LALJI ROAD KANDIVALI (W) MUMBAI 400 067 VS. ITO 33(3)(5), MUMBAI 400 077 PAN/GIR NO. AOSPM0453M APPELLANT ) .. RESPONDENT ) ASSESSEE BY MS. KHYATI MEMAYA REVENUE BY SHRI A.K.KARDAM DATE OF HEARING 09 / 05 /201 7 DATE OF PRONOUNCEME NT 15 / 05 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 45, MUMBAI DATED 29/11/2016 FOR THE A.Y.2012 - 13 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. ONLY GRIEVANCE OF ASSESSEE RELATES TO DISALLOWANCE OF RS.9,26,045/ - U/S.14A R.W.R.8D OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE AO NOTICED FROM THE RECORDS THAT THE ASSESSEE HAS INVESTED IN SHAR ES AND EARNED DIVIDEN D OF RS.43,7 31/ - AND LTCG OF RS.1,65,040/ - WHICH WAS CLAIMED U/ S 10(34) AND U/S 10(38) OF THE I T. ACT RESPECTIVELY. THE INVESTMENT ACTIVITY WAS FOUND BY AO AS SUBSTANTIALLY HIGH AND THERE WAS NO DEMARCATION OF ITA NO. 733/MUM/2017 SHRI VINEET P MEHTA 2 EXPENSES ATTRIBUTABLE TO TABLE INCOME A ND EX EMPT INCOME EITHER IN THE R ETURN OR IN THE DETAILS ON RECORD. THE AO SHOW - CAUSED THE ASSESSEE AS TO WHY SUCH EXPENSES SHOULD NOT BE DISALLOWED. TO THIS, THE AR OF THE ASSESSEE FILED REPLY VIDE LETTER DATED 18.3.2015 WHICH WAS NOT ACCEPTED BY THE AO. THE W ORKED OUT THE DISALLOWANCE U/ S 14A AND MADE ADDITION OF RS.9,26,045/ - U/ S 14A R.W. RULE 8D OF THE I.T.ACT. 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE DISALLOWANCE AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. I HAVE CONSIDERED RIVAL CON TENTIONS AND FOUND FROM RECORD THAT DURING THE YEAR ASSESSEE EARNED EXEMPT INCOME ON ACCOUNT OF DIVIDEND OF RS.43,731/ - , PPF INTEREST OF RS.16,885/ - AND LONG TERM GAIN OF RS.1,65,040/ - . IN VIEW OF THE FOLLOWING JUDICIAL PRONOUNCEMENTS, DISALLOWANCE U/S.14 A R.W.R.8D SHOULD NOT EXCEED THE EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE YEAR. 1) JOINT INVESTMENTS V. CIT [372 ITR 694 (DEL)] 2) INDUS VALLEY INVESTMENTS V. DCIT BEING ITA NO: 3763/DE1/2013 FOR AY. 2009 - 10 DATED 29.04.2015 3) ESSAR PROPERTIES LTD V. DCIT (ITA NO: 423/MUM/2015) FOR AY. 2009 - 10 DATED 19.07.2016 4) M/S SLYVEX CABLE CO. PVT. LTD. V DY.CIT BEING ITA NO: 8581/MUM/2011 FOR AY. 2008 - 09 DATED 24.02.2016 5) M/S GLOBAL CAPITAL LTD V ACIT BEING ITA NO: 6586/DEL/2013 FOR AY. 2009 - 10 DAT ED 27.11.2015 6) DCIT V. DCM LTD BEING ITA NO: 4467/DE L /2012 FOR AY. 2009 - 10 DATED 01.09.2015 ITA NO. 733/MUM/2017 SHRI VINEET P MEHTA 3 7) M/S DAGA GLOBAL CHEMICALS V. ASST. CIT BEING ITA NO: 5592/MUM/2012 DATED 01.01.2015 7. IN VIEW OF THE ABOVE, I DIRECT THE AO TO RESTRICT THE DISALLOWANCE OF EXPENDITURE TO THE EXTENT OF EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. I DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 05 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 15 / 05 /201 7 KARUNA SR. PS 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. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//