RUCHI REALTY HOLDINGS LTD, MUMBAI V. ACIT RG 3(3), MUMBAI

ITA 7622/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4454 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 27-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Section: 142(1); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.7622/MUM/2013 ( # % &% / ASSESSMENT YEAR: 2010-11) RUCHI REALTY HOLDINGS LTD. 610, TULASIANI CHAMBERS, NARIMAN POINT, MUMBAI / VS. ACIT 3(3) MUMBAI ./ ./ PAN/GIR NO. : AADCR7664R ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI BHUPENDRA SHAH DEPARTMENT BY: SHRI S.K.MISHRA !'# $% &' / DATE OF HEARING: 10.09.2015 ()*+ $% &' /DATE OF PRONOUNCEMENT: 06.01.2016 ,- / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL DIRECTED AGAINST THE ORDER DATED 02.10.2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-7, MUMBAI [HEREINAFTER REFERRED TO AS THE LEARNED CIT (A)] RELEVANT TO THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE FILED THE RETURN OF INCOME FOR A.Y. 2010-11 BY WAY OF E-FILING DECLARING TOTAL INCOME AT RS.91,31,616/- ON 29.09.2010. THE RETURN OF INCOME WAS PROCESSED U/S . 143(1) OF THE ITA NO.7622/MUM/2013 ASSESSMENT YEAR: 2010-11 2 INCOME TAX ACT, 1961( IN SHORT THE ACT). THEREAF TER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S.143(2) & 142(1) WERE ISSUED TO THE ASSESSEE AND THEREAFTER ASSESSING OFF ICER DISALLOWED THE EXPENDITURE TO THE TUNE OF RS.21,08,186/- IN VI EW OF THE PROVISION CONTAINED IN SECTION 14A R.W. RULE 8D OF THE ACT. THEREAFTER THE ASSESSEE FILED AN APPEAL BEFORE LEAR NED CIT(A) BUT THE LEARNED CIT(A) DISMISSED THE APPEAL THEREFORE, THE ASSESSEE IS BEFORE US RAISING THE QUESTION ON THE AMOUNT OF RS. 21,08,186/- DISALLOWED U/S. 14A R.W. RULE 8D. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR DS CAREFULLY. THE ASSESSEE-COMPANY HAS CLAIMED DIVIDEND INCOME OF RS. 1,49,615/- AS EXEMPT U/S.10(34) OF THE ACT. ASSESSEE HAS NOT MADE ANY FRESH INVESTMENT IN THE SHARES IN THE RELEVANT ASSESSMENT YEAR. ASSESSEE-COMPANY PAID INTEREST OF RS.2,01,61,926/- UNDER SUBVENTION SCHEME OF THE REAL ESTATE BUSINESS ONLY. ASSESSEE- COMPANY ALSO EARNED THE INTEREST INCOME OF RS.1,27, 87,064/-. THE ASSESSEE-COMPANY DID NOT BORROW ANY INTEREST BEARIN G LOAN FOR THE PURCHASE OF SHARES. SECTION 14A OF THE ACT SPEAKS ABOUT THE EXPENDITURE INCURRED IN RELATION TO THE INCOME NOT INCLUDABLE IN THE TOTAL INCOME. NO DOUBT, IN VIEW OF THE SAID CIRCUM STANCE THE ASSESSEE DID NOT INCUR ANY EXPENSES TO PURCHASE THE BONDS IF ANY. ON SEEING THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE APPARENTLY THE PROVISION OF SECTION 14A R.W. RULE 8 D OF THE ACT IS NOT APPLICABLE IN THIS CASE. WE ALSO FOUND SUPPORT OF LAW SETTLED IN ITA NO.7622/MUM/2013 ASSESSMENT YEAR: 2010-11 3 [2014]366 ITR 505 (BOM) CASE TITLED AS CIT VS. HDFC BANK LTD., [2013] 215 TAXMAN 272/33 TAXMANN.COM151(GUJARAT) CA SE TITLED AS CIT-IV VS. SUZLON ENERGY LTD. AND [2014]272 CTR (GU J) 270 CASE TITLED AS CIT VS. TORRENT POWER LTD. THE OWN FUNDS AVAILABLE WITH THE ASSESSEE IS 39.50 CRORES AS AGAINST INVEST MENT OF RS.8.62 CRORES. HENCE NO DISALLOWANCE OF INTEREST IS CALLE D FOR. 4. WITH REGARD ADMINISTRATIVE EXPENSES, WE NOTICE T HAT THE ASSESSEE DID NOT MAKE FRESH INVESTMENT IN SHARES. OPENING BALANCE OF SHARES WERE CONTINUED TO BE HELD DURING THIS YEA R. HENCE DISALLOWANCE AS PER RULE 8D(2)(III) OF THE INCOME T AX RULE IS NOT PRACTICABLE. ACCORDINGLY WE DIRECT THE ASSESSING O FFICER TO COMPUTE DISALLOWANCE @ 10% AS DIVIDEND INCOME. 5. IN VIEW OF THE ABOVE, WE MODIFY THE ORDER OF LEA RNED CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO C OMPUTE DISALLOWANCE AS STATED ABOVE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY PARTLY ALLOWED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) , / ACCOUNTANT MEMBER ./$ , /JUDICIAL MEMBER 0 1# MUMBAI; 2,!$ DATED : 6 TH JANUARY, 2016 MP MP MP MP ITA NO.7622/MUM/2013 ASSESSMENT YEAR: 2010-11 4 ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ 3& ( ) / THE CIT(A)- 4. $ 3& / CIT 5. 4'56 /&/!78 , $ ' 78$+ , 0 1# / DR, ITAT, MUMBAI 6. 69: ;# / GUARD FILE. ' / BY ORDER, 4& /& //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , 0 1# / ITAT, MUMBAI