DCIT CEN CIR 1(4), MUMBAI V. EVERSMILE CONSTRUCTION COMPANY P.LTD, MUMBAI

ITA 7630/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2233 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 23-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KASHYAPDR
• Assessee Lawyers: DHAVAL B SELWADIA
• Section: 143(3); 14A

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUM BAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C.N. PRA SAD,JUDICIAL MEMBER ./I.T.A./7630/MUM/2014, /ASSESSMENT YEAR: 2010-11 DCIT-CC(1)(4), MUMBAI-400 020. VS. M/S. EVERSMILE CONSTRUCTION CO. PVT. LTD. D.B. HOUSE, YADHODHAM, GEN AK VAIDYA MARG, GOREGAON(E) MUMBAI 400 063 PAN:AAACE 0875 E ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: SHRI SANJEEV KASHYAP-DR ASSESSEE BY: SHRI DHAVAL B. SELWADIA / DATE OF HEARING: 27.07.2016 / DATE OF PRONOUNCEMENT: 27.07.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.24.10.14 OF CIT(A)-36, MUM BAI THE AO HAS FILED THE PRESENT APPEAL. ASSESSEE-COMPANY, ENGAGED IN THE BUSINESS OF DEVELO PMENT AND CONSTRUCTION OF PROPERTY FILED ITS RETURN OF INCOME ON 9.9.2010 DECLARING IT S TOTAL INCOME AT RS.6.39 CRORES. THE AO COMPLETED THE ASSESSMENT U/S. 25.3.13 U/S. 143(3) O F THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS.7.75 CRORES. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT RESTRICTING THE DISALLOWANCE U/S. 14A R.W.RULE 8D OF THE IT RULES,1962,(RULES).DURING THE ASSESSMENT PRO CEEDINGS THE AO MADE A DISALLOWANCE OF RS.45.22 LAKHS INVOKING THE PROVISIONS OF SECTION 1 4A R.W.R 8D OF THE RULES. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA. BEFORE HIM IT WAS ARGUED THAT IN THE EARLIER YEAR THE THEN FAA HAD CONFIRMED THE DISALLOWANCE AT RS.7.28 LAKHS AS OFFERED BY THE ASSESSEE ITSELF. FO LLOWING THE ORDER OF HIS PREDECESSORS THE FAA RESTRICTED THE DISALLOWANCE TO 10% OF THE TOTAL DISALLOWANCE I.E. RS.8.23 LAKHS. 3. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE( DR) SUPP ORTED ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE (AR)STATED THAT THE TRIBUNAL HAD DEC IDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE,WHILE DECIDING THE APPEAL FOR THE AY.2009- 10. 7630/M/14 EVERSMILE 2 4. WE HAVE PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE TRIBUNAL WHILE DECIDING THE APPEAL FOR THE AY 2009-10 (ITA/6142/MUM/12 DT. 19.8.15) HA S DEALT THE ISSUE AS UNDER:- 8.WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED THE DOCUMENTARY EVIDENCES RE FERRED TO DURING THE COURSE OF PROCEEDINGS .UNDOUBTEDLY AND UNDISPUTEDLY ALL THE INVESTMENTS M ADE BY THE ASSESSEE ARE IN SUBSIDIARY COMPANIES/ASSOCIATED COMPANIES AS CAPITAL CONTRIBUT ION IN PARTNERSHIP FIRM/ASSOCIATION OF PERSONS. IN ITS NOTE TO ACCOUNTS AND AT POINT NO.10 , THE ASSESSEE HAS DISLCOED THE RELATIONSHIP UNDER THE EHAD RELATED PARTY DISCLOSURE WHICH IS AT PAGE-24 OF THE PB AND THE DETAILS OF INVESTMENTS ARE AT PAGES 16 AND 17 OF THE PB.CONSID ERING THE FACTS IN TOTALITY, WE FIND THAT THE RELATED ISSUES ARE SQUARELY DECIDED IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF JMF FINANCI AL (SUPRA), WHICH HAS BEEN FOLLOWED BY THE TRIBUNAL DELHI BENCH IN ITA NO.4245/DEL/2011, AHME DABAD BENCH IN ITA NO.2839/AHD./2011 AND RECENTLY BY THE TRIBUNAL, LUCKNOW BENCH IN ITA NO.538/LKW/2012. 8.1 AS THE ASSESSEE HAS OFFERED THE DISALLOWANCE AT RS.7,28,280/- BEFORE THE FIRST APPELLATE AUTHORITY WHICH AHS BEEN ACCEPTED BY HIM, IN OUR CO NSIDERED OPINION, THE SAME SHOULD BE TAKEN AS REASONABLE ON THE FACTS OF THE CASE, NO INTERFER ENCE IS CALLED FOR. RESPECTFULLY FOLLOWING THE ABOVE DECISION WE UPHOLD THE ORDER OF THE FAA.EFFECTIVE GROUND OF APPEAL IS DECIDED AGAINST THE AO. AS A RESULT APPEAL FILED BY AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY,2016. 27 , 2016 SD/- SD/- ( . /C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :27 .07.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR C BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.