SHRI KHARATI RAM PURI , MUMBAI V. CIT (A)-8, MUMBAI

ITA 7965/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7116 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHISH HELIWAL LD
• Assessee Lawyers: RAGHUNATH SARANGAPANI LD
• Keywords: Depreciation; Earning of tax free income; Rule 8D
• Section: 14A; 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANO J KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 7965 /MUM/201 9 ( / ASSESSMENT YEAR : 20 13 - 14 ) SHRI KHARATI RAM PURI 50, SUNITA, G. D. SOMANI MARG, CUFFE PARADE, MUMBAI - 400 005 / VS. A C IT - CIRCLE 3(1)( 1) 3 RD FLOOR, MITTAL COURT, NARIMAN POINT, MUMBAI - 400 021 ./ ./ PAN/GIR NO . A A EPP - 8874 - D ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI RAGHUNATH SARANGAPANI LD. AR REVENUE BY : SHRI ASHISH HELIWAL LD. SR. DR / DATE OF HEARING : 23 /08 /2021 / DATE OF PRONOUNCEMENT : 25/08/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE SOLE GRIEVANCE OF THE ASSESSEE IN THE CAPTIONED A PPEAL FOR ASSESSMENT YEAR (AY) 2013 - 14 IS DISALL OWANCE U/S 14A AS MADE BY LD. AO IN ASSESSMENT ORDER DATED 24/02/2016 WHICH HAS BEEN CONFIRMED BY LEARNED COMMI SSIONER OF INCOME - TAX (APPEALS) - 8 , MUMBAI [CIT (A) ], VIDE ORDER DATED 20 /08 /20 19 . 2. A DELAY OF 60 DAYS HAS BEEN NOTED IN THE APPEAL, THE CONDONAT ION OF WHICH HAS BEEN SOUGHT BY THE ASSESSEE VIDE PETITION DATED 2 17/01/2020 WHICH IS SUPPORTED BY THE AFFIDAVIT OF THE ASSESSEE. THE DELAY HAS BEEN ATTRIBUTED TO THE ADVERSE MEDICAL CONDITIONS BEING FACED BY THE ASSESSEE. AFTER GOING THROUGH THE CONTENTS O F THE PETITION AND AFTER CONSIDERING THE AFFIDAVIT OF THE ASSESSEE, THE BENCH FORMED AN OPINION THAT THE DELAY WAS TO BE CONDONED AND THE APPEAL WAS TO TO BE ADMITTED. WE ORDER SO. 3 . HAVING HEARD RIVAL SUBMISSIONS, OUR ADJUDICATION TO THE SUBJECT MATTER O F APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4 . THE ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE ENGAGED IN TRADING ACTIVITIES EARNED EXEMPT DIVIDEND INCOME OF RS.474.03 LACS WHICH LED LD. AO TO TRIGGER THE PROVISIONS OF SEC.14A. THE ASSESSEE SU O - MOTO DISALLOWED AMOUNT OF RS.0.15 LACS IN THE COMPUTATION OF INCOME. THOUGH THE ASSESSEE JUSTIFIED THE SAME, LD. AO COMPUTED INDIRECT DISALLOWANCE OF RS.6.08 LAC AS PER RULE 8D(2)(III) AND ADDED THE DIFFERENTIAL OF RS.5.92 LACS TO THE INCOME OF THE ASSES SEE. THE STAND OF LD. AO, UPON CONFIRMATION BY LD. CIT(A), IS IN FURTHER CHALLENGE BEFORE US. 5 . UPON PERUSAL OF ASSESSEES FINANCIALS AS PLACED ON RECORD, IT COULD BE SEEN THAT THE ASSESSEE HAS DEBITED AGGREGATE INDIRECT EXPENDITURE OF RS.1.17 LACS IN THE SHAPE OF AUDIT FEES, BANK CHARGES, BUSINESS HOSPITALITY AND LEGAL FEES ETC. THE DEPRECIATION IS STATUTORY ALLOWANCE AGAINST WHICH NO DISALLOWANCE IS WARRANTED. AS AGAINST EXPENSE CLAIM OF RS.1.17 LACS, THE ASSESSEE HAS SUFFERED DISALLOWANCE OF RS.6.08 LAC S WHICH COULD NOT BE HELD TO BE JUSTIFIED FROM ANY ANGLE. THE ASSESSEE HAS ALREADY SUO - MOTO DISALLOWED PROPORTIONATE EXPENDITURE IN THE RATIO OF EXEMPT INCOME VIS - - VIS TOTAL INCOME WHICH IS EVIDENT FROM ITS COMPUTATION. THEREFORE, THE IMPUGNED DIFFERENCE OF RS.5.92 LACS IS NOT 3 SUSTAINABLE ON THE FACTS OF THE CASE. BY DELETING THE SAME, WE ALLOW GROUND NOS. 2 & 3. THE OTHER GROUNDS ARE NOT URGED BEFORE US AND THEREFORE, THE SAME STAND DISMISSED. 6 . THE APPEAL STAND PARTLY ALLOWED. ORDER PRONOUNCED ON 25 TH AUGUST, 2021. SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25.08.2021 SR.PS, DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMB AI.