ASIT C. MEHTA INVESTMENT INTERMEDIATES LTD, MUMBAI V. DCIT RG 4(2), MUMBAI

ITA 7896/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4268 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALIK SINGH
• Keywords: Business expenditure
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI . , ! ' #'' '$ , % ! & BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 7896 / / 2010 A.Y. 2007-08 ITA NO. : 7896/MUM/2010 (ASSESSMENT YEAR: 2007-08) M/S. ASIT C. MEHTA INVESTMENT INTERMEDIATES LIMITED, NUCLEUS HOUSE, 5 TH FLOOR, SAKI VIHAR ROAD, ANDHERI (EAST), MUMBAI -400 072 .: PAN: AAACA 5009 N VS DCIT 4(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATISH R. MODY RESPONDENT BY : SHRI KALIK SINGH /DATE OF HEARING : 02-07-2013 !' / DATE OF PRONOUNCEMENT : 10-07-2013 * O R D E R #'' '$ , : PER VIVEK VARMA, JM: THE APPEAL ARISES FROM THE ORDER OF CIT(A) 10, MUMBAI, DATED 20.10.2010, WHEREIN THE ASSESSEE HAS TAKEN UP THE FOLLOWING GROUNDS : 1. THE ASSESSING OFFICER HAS ERRED IN ALLOCATING F OLLOWING BUSINESS EXPENSES BETWEEN SHARES BROKERAGE INCOME AND ARBITR AGE INCOME. (I) RS. 6,676/- OUT OF THE TRANSACTIONS CHARGES. (II) RS. 50,000/- OUT OF DEMAT CHARGES. (III) RS. 8,39,128/- OUT OF THE DIRECTORS REMUNERATION. (IV) RS. 7,53,843/- OUT OF TOTAL EXPENSES OF RS. 51,07,3 35/- (V) RS. 1,00,000/- OUT OF REPAIR & MAINTENANCE CHARGES. (VI) RS. 1,00,000/- OUT OF VSAT AND LEASE LINE CHARGES. 2. YOUR PETITIONER SUBMITS THAT ALLOCATION OF SUCH BUS INESS EXPENSES TOWARDS ARBITRATE INCOME IS ARBITRARY AND IS NOT BA SED ON ANY SPECIFIC DATA. M/S. ASIT C. MEHTA INVEST MENT INTERMEDIATES LTD. ITA NO. 7896/MUM/2010 2 3. THE LD. AO HAS FURTHER ERRED IN REDUCING THE REBATE U/S 88E TO RS. 1,24,90,835/- AS AGAINST RS. 1,30,45,730/- CLAIMED BY YOUR PETITIONER BY ALLOCATING THE ABOVE MENTIONED EXPENSES TO THE A RBITRATE INCOME, THEREBY REDUCING THE ARBITRAGE INCOME AND CORRESPON DING REBATE U/S 88E OF THE INCOME-TAX ACT, 1961. 4. THE LD. AO HAS ERRED IN ESTIMATING THE DISALLOWANCE U/S. 14A AND THEREBY ADDING AN AMOUNT OF RS. 4,22,237/- TO THE I NCOME OF YOUR PETITIONER. 5. THE LD. CIT HAS ERRED IN CONFIRMING THE REDUCTION O F REBATE U/S 88E AND CONFIRMING IN PART THE ADDITION U/S 14A. 2. AT THE TIME OF HEARING, THE AR POINTED OUT THAT IDENTIC AL ISSUES WERE RAISED BEFORE THE ITAT IN ITA NO. 4662/MUM/2009, CO NCERNING ASSESSMENT YEAR 2006-07. 3. WE FIND THAT IN ITA NO. 4662/MUM/2009, THE COORDINATE BENCH HAD DELETED THE ADDITION IN SO FAR AS REPAIRS & MAINTENANC E AT RS. 1,00,000/-, VSAT & LEASELINE CHARGES AT RS. 1,00,000/- AND R S. 7,53,843/- (TAKEN BY THE AO AT RS. 8,39,128/-) HAS BEEN DIR ECTED TO BE DELETED. 4. SINCE THE REST OF THE ISSUES HAD BEEN RESTORED, WE ALSO, FOR THE SAKE OF CONTINUITY, RESTORE THE REST OF THE ISSUES RAISED IN THE GOA TO THE FILE OF THE AO. 5. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) ON TH ESE ISSUES AND DIRECT THE AO TO RECOMPUTE THE DISALLOWANCE U/S 14A AND DEDUCTION U/S 88E. 6. THE APPEAL, FILED BY THE ASSESSEE, IS ALLOWED FOR STATISTICA L PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2013. SD/- SD/- ( . ) ( #'' '$ ) ! ! (B. RAMAKOTAIAH) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 10 TH JULY, 2013 M/S. ASIT C. MEHTA INVEST MENT INTERMEDIATES LTD. ITA NO. 7896/MUM/2010 3 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) & & ' ( ) - 8 MUMBAI / THE CIT (A)-8, MUMBAI. 4) & & ' 4, MUMBAI / THE CIT4, MUMBAI, 5) )*+ , - , & , , ./ / THE D.R. A BENCH, MUMBAI. 6) +0 1 COPY TO GUARD FILE. &23 / BY ORDER [ 4 / 5 6 & , , ./ DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *895 . . * CHAVAN, SR. PS