ASST CIT 12(3), MUMBAI V. A.G. ENTERPRISES, MUMBAI

ITA 8096/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8544 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.8096/MUM/2010(A.Y. 2007-08) THE DCIT 12(3), ROOM NO.121, AAYKAR BHAVAN, MK ROAD, MUMBAI - 20. (APPELLANT) VS. M/S.A.G. ENTERPRISES, 115, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI 400 021. PAN: AAAFA 3517E (RESPONDENT) APPELLANT BY : SHRI MANOJ KUMAR RESPONDENT BY : SHRI PANKAJ JAIN DATE OF HEARING : 09/1 0/2012 DATE OF PRONOUNCEMENT : 19/10/2012 ORDER PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY LD. CIT(A)23, MUMBAI DATED 15/9/2010 FOR ASSESSMENT YEAR 2007- 08. GROUNDS OF APPEAL READ AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.NCIT(A) ERRED IN DIRECTING THE AO TO COMPUTE REA SONABLE DISALLOWANCE U/S. 14A FOLLOWING THE DIRECTION OF TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE LTD. BY OV ERLOOKING THE FACTS THAT THE ASSESSEE ITSELF HAD AGREED VIDE ORDER SHEE T ENTRY DATED 23.10.2009 TO ADDITION OF RS.43,64,557/- U/S. 14A R .W. RULE 8D FOR WHICH THE ASSESSEE HAS NO OBJECTION.(AS PER CERTIFI ED COPY OF THE ORDER SHEET ATTACHED) 2.THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE RESTORED. ITA NO.8096/MUM/2010(A.Y. 2007-08) 2 2. THE AO COMPUTED DISALLOWANCE UNDER SECTION 14A A S PER RULE 8D AND ADDED A SUM OF RS.43,64,557/- TO THE INCOME OF THE ASSESSEE. THE DISALLOWANCE WAS AGITATED IN APPEAL BY THE ASSESSEE BEFORE LD. CIT(A), WHO HAS DIRECTED THE AO TO MAKE REASONABLE DISALLOWANCE AS PER DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOY CE MFG. COMPANY VS. DCI (2010) 328 ITR 81(BOM). 3. RELYING UPON THE GROUNDS OF APPEAL IT WAS SUBMIT TED BY LD. DR THAT ASSESSEE EXPRESSED ITS NO OBJECTION FOR APPLICABILI TY OF RULE 8D AND, THEREFORE, AO WAS RIGHT IN INVOKING RULE 8D. FOR THIS PURPOSE HE RELIED UPON THE ORDER SHEET DATED 23/10/2009. THUS LD. DR PLEADED THAT LD. CIT(A) HAS WRONGLY DELETED THE ADDITION AND HIS ORDER SHOULD BE SET AS IDE AND THAT OF AO SHOULD BE RESTORED. 4. ON THE OTHER HAND, LD. A.R SUBMITTED THAT THERE IS NO ESTOPPEL AGAINST LAW. THE AO IS UNDER AN OBLIGATION TO WORK OUT ASS ESSABLE INCOME AS PER LAW. LD. CIT(A) HAS COMMITTED NO ERROR IN DIRECTING THE AO TO COMPUTE DISALLOWANCE IN ACCORDANCE WITH THE DECISION OF HO NBLE JURISDICTIONAL HIGH COURT. THUS HE PLEADED THAT APPEAL FILED BY THE R EVENUE SHOULD BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE FIND FORCE IN THE ARGUMENTS OF LD. AR THAT THERE CANNOT BE ANY ESTOPPEL AGAINST LAW. THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IS A LAW APPLICABLE TO THE TERRITORY UNDER THE JURISDICTIONAL HIGH COURT. IF THE LD. AR OF THE ASSESSEE HAD AGREED B EFORE AO FOR MAKING THE DISALLOWANCE THAT DOES NOT DEBAR THE ASSESSEE TO TA KE A PLEA AGAINST THE SAME IF THAT DISALLOWANCE IS CONTRARY TO THE DECISION OF THE JURISDICTIONAL HIGH COURT. AS PER THE AFOREMENTIONED DECISION OF HONBLE J URISDICTIONAL HIGH COURT IN THE ITA NO.8096/MUM/2010(A.Y. 2007-08) 3 CASE OF GODREJ & BOYCE MFG. COMPANY(SUPRA), RULE 8 D IS NOT APPLICABLE FOR ASSESSMENT YEAR 2007-08. THEREFORE, DISALLOWANCE U NDER SECTION 14A FOR A.Y 2007-08 WITH RULE 8D IS NOT PERMISSIBLE. ONLY REAS ONABLE DISALLOWANCE HAS TO BE MADE AND LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO MAKE REASONABLE DISALLOWANCE AS PER THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. COMPANY LTD (SUPRA). WE FIND NO INFIRMITY IN SUCH DIRECTION OF LD. CIT(A) AND WE DECLINE TO INTERFERE IN THE RELIEF GIVEN BY LD. CIT(A). THE APPEAL FILED BY THE REVENUE BEING DEVO ID OF MERIT IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH DAY OF OCT., 2012 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 19 TH OCT., 2012. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R A BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.8096/MUM/2010(A.Y. 2007-08) 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 09/10/2012 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 11/10/2012 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER