POLYFIBRE INDUSTRIES P.LTD, MUMBAI V. DCIT CIR 3(2), MUMBAI

ITA 7567/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83605 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.7567/M/2012 ( AY: 2009 - 2010 ) POLYFIBRE INDUSTRIES P. LTD., 82, MAKER CHAMBERS , III NARIMAN POINT, MUMBAI - 400 021. / VS. DCIT CIRCLE (32), AAYAKAR BHAVAN, MUMBAI 400 020. ./ PAN : AAACP9550B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA & MR. ANUJ KISHNADWALA / RESPONDENT BY : SHRI R.A. PANT, DR / DATE OF HEARING :5.8.2014 / DATE OF PRONOUNCEMENT 27 .8.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 21.12.2012 IS AGAINST THE ORDER OF THE CIT (A) - 4, MUMBAI DATED 17.10.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE ORDER PASSED BY THE LD CIT (A) IS ILLEGAL, BAD IN LAW, ULTRA VIRES AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE AND WITHOUT APPRECIATING THE FACTS OF THE CASE IN THEIR PERSPECTIVE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CI T (A) ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 14,41,489/ - OUT OF RS. 37,71,061/ - DISALLOWED BY THE ASSESSING OFFICER U/S 14A READ WITH RULE 8D . 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD CIT (A) BE CANCELLED AND DIRECTION BE ISSUE D TO ALLOW THE APPEAL ON THE GROUNDS RAISED BEFORE HIM. 4. EACH ONE OF THE ABOVE GROUNDS OF APPEAL IS WITHOUT PREJUDICE TO THE OTHER. 3. DURING THE PROCEEDINGS BEFORE US, SHRI VIJAY MEHTA & MR. ANUJ KISHNADWALA, LD COUNSELS FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF ITS SISTER CONCERN NAMELY M/S. JUBLIANT ENTERPRISES PVT LTD VIDE ITA NO.6364/M/2012 (AY 2008 - 2009) DATED 12.3.2014 , AND DEMONSTRATED THAT THE FACTS ARE IDENTICAL WITH THAT OF THE ASSESSEE. FURTHER, HE MENTIONED T HAT THE ASSESSEE EARNED EXEMPT INCOME AND IN BOTH THE CASES RS. 25,000/ - WAS QUANTIFIED AS RELATABLE EXPENDITURE INCURRED FOR EARNING OF THE SAID EXEMPT INCOME. THE TRIBUNAL, ON APPRECIATION OF THE FACTS MENTIONED THAT THE DISALLOWANCE SHOULD BE MADE ON PROPORTIONATE BASIS AND NOT THE AMOUNT OF RS. 25,000/ - AS DONE BY THE ASSESSEE . CONSIDERING THE COMMONALITY OF THE FACTS BETWEEN THE CASES, LD COUNSEL MENTIONED THAT THE ISSUE NEEDS TO BE DECIDED IN THE SAME LINES OF THE SAID ORDER OF THE TRIBUNAL DATE D 12.3.2014 (SUPRA). 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES DUTIFULLY. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDER OF THE TRIBUNAL IN THE CASE OF M/S. J UBLIANT ENTERPRISES PVT LTD (SUPRA). ON HEARING BOTH THE PARTIES, WE FIND MERIT IN THE ARGUMENT OF THE ASSESSEES COUNSEL. ACCORDINGLY, WE DIRECT THE AO TO APPLY THE SAME RATIO OF THE TRIBUNALS ORDER DATED 12.3.2014 (SUPRA) AFTER CONSIDERING THE CALCULA TIONS PROVIDED BY THE ASSESSEE ON THE PROPORTIONATE DISALLOWANCE U/S 14A OF THE ACT. AS PER THE ASSESSEE, ON THAT BASIS, RS. 71,145/ - IS THE REASONABLE FIGURE IN PLACE OF RS. 25,000/ - WHICH WAS QUANTIFIED BY THE ASSESSEE IN THE RETURN OF INCOME. AO MAY CONSIDER THE SAID CALCULATIONS AFTER DUE VERIFICATION AND APPLYING THE SAID ORDER OF THE TRIBUNAL (SUPRA). ACCORDINGLY, GROUND NO.2 RAISED BY THE ASSESSEE IS DECIDED IN THE ABOVE MENTIONED MANNER. 6. CONSIDERING THE GENERAL AND CONSEQUENTIAL NATURE OF THE G ROUNDS, GROUND NO.1, 3 AND 4 NEED NO SPECIFIC ADJUDICATION. THEREFORE, THE SAID GROUNDS ARE DISMISSED AS GENERAL OR CONSEQUENTIAL. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH AUGUST, 2014. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 27 /08/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI