PREMKUMAR KHURANA, MUMBAI V. ACIT CEN CIR 20, MUMBAI

ITA 7961/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9408 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NOS. 7960 & 7961/MUM/2010 (ASSESSMENT YEAR: 2006-07 & 2007-08) SHRI PREMKUMAR KHURANA 501, RAHEJA CENTRE, FREE PRESS JOURNAL MARG, NARIMAN POINT, MUMBAI -400 021 PAN AGGPK 6149 Q VS. THE ASST. COMMISSIONER OF INCOME TAX M.K. ROAD, CENTRAL CIRCLE, MUMBAI 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHEKHAR GUPTA RESPONDENT BY : SHRI VIJAY KUMAR JAISWAL DATE OF HEARING: 12.11.2012 DATE OF PRONOUNCEMENT: 21.11.2012 O R D E R PER VIVEK VARMA, JM: THE ASSESSEE HAS FILED TWO APPEALS FOR ASSESSMENT YEAR 2006-07 & 2007-08 AGAINST THE ORDERS OF CIT(A) 39, MUMBAI, BOTH DA TED 05.08.2010. SINCE THE ISSUE AND GROUND TAKEN IN BOTH THE YEARS ARE IDENTICAL, WE ARE DISPOSING OF BOTH THE APPEALS THROUGH A C OMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE SOLITARY ISSUE IS WITH REGARD TO DISALLOWANCE OF EXPENSES U /S 14A R/W RULE 8D. 3. AT THE TIME OF HEARING, THE AR POINTED OUT THAT SINCE THE ASSESSMENT YEARS INVOKED ARE 2006-07 & 2007-08, DISALLOW ANCE UNDER SECTION 14A CANNOT BE COMPUTED IN ACCORDANCE WITH RULE 8D, AS HELD SHRI PREMKUMAR KHURANA ITA NOS. 7960 & 7961/MUM/2010 2 BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. PVT. LTD, REPORTED IN 328 ITR 81(BOM), WHEREIN IT HAS BE EN HELD THAT THE RULE COULD ONLY APPLIED PROSPECTIVELY, I.E. FROM 2 008-09 ONWARDS. 4. THE AR ALSO POINTED OUT THAT THE COORDINATE BENCH IN MUMBAI IN ITA NOS. 6995 TO 6998/MUM/2010 HAVE RESTORED THE ISSU E FOR COMPUTATION OF ALLOCABLE EXPENSES UNDER SECTION 14A ON RE ASONABLE BASIS, TO THE AO IN THE ASSESSEE OWN CASE. THE AR, THERE FORE, SUBMITTED THAT SIMILARLY, THE INSTANT YEARS SHOULD ALSO BE RESTORED FOR CONSISTENCY IN ALL THE YEARS, FROM ASSESSMENT YEAR 2001-0 2, 2002-03, 2004-05 & 2005-06 AND IN THE CURRENT YEARS 2006-07 & 2007-08. 5. THE DR RELIED ON THE ORDER OF THE REVENUE AUTHORITY. 6. ON GOING THROUGH THE ORDER OF THE COORDINATE BENCH, WHEREIN IT WAS OBSERVED : WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE Q UESTION OF MAKING THE DISALLOWANCE U/S 14A IS NO MORE RESINTEGRA IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF GODREJ & BOYCE MANUFACTURING COMPANY LTD. (SUPRA) HOLD ING THAT THE PROVISION OF SECTION 14A ARE APPLICABLE AND THE D ISALLOWANCE HAS TO BE WORKED OUT BY THE A.O. ON SOME REASONABLE BA SIS AND NOT UNDER RULE 8D. SINCE THE A.O. WHILE CALCULATING THE DISALLOWANCE U/S. 14A HAS ALSO APPLIED RULE 8D OF THE IN COME TAX RULES, 1962, WHICH IS APPLICABLE FROM THE A.Y.2008-09 , THEREFORE, WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) DIRECT THE A.O. TO MA KE DISALLOWANCE, IF ANY, IN THE LIGHT OF THE ABOVE DECISIO NS, AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSED. 7. RESPECTFULLY FOLLOWING THE ORDERS IN THE PRECEDING YEAR IN THE CASE OF THE ASSESSEE, WE DIRECT THE AO TO MAKE THE DISA LLOWANCE, IN SHRI PREMKUMAR KHURANA ITA NOS. 7960 & 7961/MUM/2010 3 THE, LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN GO DREJ & BOYCE MFG. CO. PVT. LTD. (SUPRA), REPORTED IN 328/81 (BOM). 8. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE ON T HIS ISSUE WITH THE DIRECTION TO THE AO AS IN PARA 7. 9. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 21/11/2012. SD/- ( RAJENDRA SINGH ) ACCOUTANT MEMBER SD/- ( VIVEK VARMA ) JUDICIAL MEMBER MUMBAI, DATE: 21/11/2012 COPY TO : 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)- 22 , MUMBAI. 4) THE CIT 10, MUMBAI, 5) THE D.R. C BENCH, MUMBAI. 6) COPY TO GUARD FILE. BY ORDER ASSTT. REGISTRAR I.T.A.T., MUMBAI RASIKA