ASSISTANT COMMISSIONER OF INCOME TAX -6(2)(1), MUMBAI V. M/S.DAIWA PORTFOLIO ADVISORY (INDIA) PRIVATE LIMITED , MUMBAI

ITA 789/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1455 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 08-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHI RAMA KARTIKEYANLD
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.789/MUM/2018 ( / ASSESSMENT YEAR:2013-14) A CIT - CIRCLE 6(2)(1) ROOM NO.504, 5 TH FLOOR AAYKAR BHAVAN, MK ROAD MUMBAI-400 020. / VS. M/S. DAIWA PORTFOLIO ADVISORY (INDIA) PVT.LTD. [FORMERLY KNOWN AS DAIWA ASSET MANAGEMENT (I) P.LTD. ] 1102, 11 TH FLOOR, TOWER-2 WING-A, ONE INDIA BULLS CENTRE ELPHINSTONE ROAD-W, MUMBAI-13. ./ ./PAN/GIR NO. AALCS-8890-E ( ! /APPELLANT ) : ( '#! / RESPONDENT ) APPELLANT BY : ABHI RAMA KARTIKEYAN - LD.DR RESPONDENT BY : NONE / DATE OF HEARING : 19/03/2019 / DATE OF PRONOUNCEMENT : 22/03/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2013-14 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-12, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-12/DCIT-6(2)(1)/206/16-17 DATED 24/11/2017 QUA DELETION OF DISALLOWANCE U/S 14A FOR RS.71.11 LACS. NONE HAS AP PEARED FOR ASSESSEE AND NO VALID ADJOURNMENT APPLICATION IS ON RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE B ASIS OF MATERIAL 2 AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMEN TAL REPRESENTATIVE, WHO SUPPORTED THE STAND OF LD. AO. 2. THE ASSESSEE BEING RESIDENT CORPORATE ENTITY STATED TO BE ENGAGED AS INVESTMENT MANAGER WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 16/03/2016 WHEREIN THE INCOME WAS DETERMINED AT RS. 43.78 LACS UNDER NORMAL PROVISIONS, INTER-ALIA, AFTER DISALLOWANCE U/S 14A FOR RS.71.11 LACS AS AGAINST RETURNED LOSS OF RS.32.86 LACS E-FI LED BY THE ASSESSEE ON 18/09/2013. THE SAID DISALLOWANCE WAS MADE ON AC COUNT OF ADMINISTRATIVE EXPENSES U/R 8D(2)(III), COMPUTED @0 .5% OF AVERAGE INVESTMENTS HELD BY THE ASSESSEE. 3. THE FIRST APPELLATE AUTHORITY, RELYING UPON THE DECISION OF DELHI TRIBUNAL (SPECIAL BENCH) RENDERED IN ACIT VS. VIREET INVESTMENT (P.) LTD. [82 TAXMANN.COM 415] , HELD THAT ONLY EXEMPT INCOME YIELDING INVESTMENTS WERE TO BE CONSIDERED TO ARRIVE AT THE SAID DISALLOWANCE. FURTHER THE INVESTMENT MADE IN CERTIFICATE OF DEPOSIT [COD] WAS CHARGEABLE TO TAX AND THEREFORE, THE SAME WERE TO B E EXCLUDED WHILE COMPUTING AVERAGE INVESTMENTS. SIMILARLY, MUTUAL FUNDS -GROWTH OPTION INVESTMENTS WERE TO BE EXCLUDED SINCE THEY WOULD NO T GENERATE EXEMPT INCOME. AFTER EXCLUDING THE SAME, 0.5% OF AVERAGE I NVESTMENTS WORKED OUT TO BE RS.14,129/- WHICH THE ASSESSEE HAD ALREAD Y DISALLOWED WHILE COMPUTING THE TAXABLE INCOME. THEREFORE, THE LD. AO WAS DIRECTED TO DELETE THE IMPUGNED DISALLOWANCE OF RS.71.11 LACS. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX, WE FIND THE ACTION OF LD. FIRST APPELLATE AUTHORITY IS IN LINE WITH THE D ECISION OF DELHI TRIBUNAL (SPECIAL BENCH) RENDERED IN ACIT VS. VIREET INVESTMENT (P.) LTD. [82 TAXMANN.COM 415] AND THEREFORE, NO INFIRMITY COULD BE FOUND IN THE 3 SAME. THE REVENUE IS UNABLE TO CONTROVERT THE FACTU AL MATRIX AS NOTED BY LD. FIRST APPELLATE AUTHORITY. HENCE, BY CONFIRMING THE STAND OF LD. CIT(A), WE DISMISS THE APPEAL 5. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2019. SD/- SD/- - (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22/03/2019 SR.PS:-JAISY VARGHESE '# $# / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. +, '%- , - , / DR, ITAT, MUMBAI 6. ,./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.