ACIT 3(2)(1), MUMBAI V. MUKUND GLOBAL FINANCE LTD, MUMBAI

ITA 810/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0062 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: SONALEE GODBOLE
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.810/MUM/2017 (ASSESSMENT YEAR- 2013-14) ACIT- 3(2)(1), ROOM NO. 608, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S MUKAND GLOBAL FINANCE LTD. 3 RD FLOOR, BAJAJ BHAVAN, 226, JAMNABAI BAJAJ MARG, NARIMAN POINT, MUMBAI-400021 PAN: AAACM8348N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V. JUSTIN -SR.DR ASSESSEE BY : MS. SONALEE GODBOLE (AR) DATE OF HEARING : 22.08.2017 DATE OF PRONOUNCEMENT : 22.08.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF THE INC OME-TAX ACT (ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME TAX (APPEALS)-8 [CIT(A)], MUMBAI DATED 17.08.2016 FOR THE ASSESSMEN T YEAR (AY) 2013- 14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: '1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.42,15,838/- U/S.14A WITHOUT APPRECIATING THE FACT THAT THE AMOUNT OF DI SALLOWANCE U/S.14A OF THE I.T. ACT, 1961 HAS TO BE COMPUTED AS PER RULE 8D OF I.T.RULES, 1962 WHEN THE COMPUTATION OF THE ASSESSEE WAS NOT FOUND TO BE COR RECT AND AS HELD IN THE ORDER OF THE HON'BLE HIGH COURT IN THE CASE OF M/S. GODREJ & BOYCE MANUFACTURING CO. LTD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE U/ S.14A TO THE BOOK PROFIT U/S.115JB OF THE I. T. ACT, 1961 IGNORING THE DECIS IONS OF THE HON'BLE ITAT, MUMBAI IN THE CASE OF M/S. VIRAJ PROFILES LTD. IN I TA NO.4439/MUM/2013 ITA NO. 810/MUM/2017- M/S MUKAND GLOBAL FINANCE LTD. 2 DATED 21/10/2015 - 46 ITR(T) 626 (MUMBAI-TRIB.) [20 16] AND IN FERANI HOTELS PVT. LTD. IN ITA NO.857/MUM/2013 DATED 17/11 /2014. 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. AT THE OUTSET OF THE HEARING, THE LD. AUTHORIZED RE PRESENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED BY REVENUE ARE COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2012-13 IN ITA NO. 809/MUM/2017. THE LD. DEPARTMENTAL REPRESENTATI VE (DR) FOR THE REVENUE NOT DISPUTED THE DECISION OF TRIBUNAL IN AS SESSEES OWN CASE AND FAIRLY CONCEDED THAT THE ISSUES COVERED IN FAVOUR O F ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE REP RESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORI TIES BELOW. WE HAVE SEEN THAT IN THE ASSESSMENT ORDER FOR AY 2012-13, S IMILAR DISALLOWANCE OF RS. 42,15,838/- U/S 14A OF THE ON APPEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE WAS RESTRICTED TO RS. 73,479/-. AND ON THE APPEAL OF REVENUE BEFORE THE ITAT, THE ORDER OF LD. CIT(A) WAS UPHELD . THE COORDINATE BENCH OF THE TRIBUNAL PASSED THE FOLLOWING ORDER: 7. I HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND T HAT DISALLOWANCE OF INTEREST WAS DELETED BY CIT(A) AFTER RECORDING A FINDING TO THE EFFECT THAT ASSESSEE'S FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES AND SURPLUS WAS RS.39.32 CRORES WHICH WAS MORE THAN THE INVESTMENT OF RS.19.84 CROR ES. WITH REGARD TO THE DISALLOWANCE OF OTHER EXPENDITURE, THE CIT(A) AFTER RELYING ON THE DECISION OF HON'BLE BOMBAY HIGH COURT AND MUMBAI TRIBUNAL HELD THAT NOTHING WAS POINTED OUT BY THE AO WITH REGARD TO THE CORRECTNES S OF THE CLAIM OF ASSESSEE AS REGARD TO THE EXPENDITURE IN RELATION TO EXEMPT INC OME. ACCORDINGLY, DISALLOWANCE WAS RESTRICTED TO RS.73,479/-. DETAILE D FINDING RECORDED BY CIT(A) ARE AS PER MATERIAL ON RECORD WHICH HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. ACCORDINGLY, I DO NOT FIND ANY REASON T O INTERFERE IN THE ORDER OF CIT(A). ITA NO. 810/MUM/2017- M/S MUKAND GLOBAL FINANCE LTD. 3 4. CONSIDERING THE FACT THAT FACT OF THE AY UNDER CONS IDERATION IS ALSO SIMILAR. THE ASSESSEE HAVE EARNED THE DIVIDEND INCOME OF RS. 50,125/-. THE ASSESSEE HAS SUOMOTO DISALLOWED A SUM OF RS. 83,72 7/- U/S 14A OF THE ACT. THE AO WHILE PASSING THE ASSESSMENT ORDER DIS ALLOWED RS. 46,96,136/- UNDER SECTION 14A. THE LD. CIT(A) RESTR ICTED THE DISALLOWANCE WHICH WAS SUO MOTO DISALLOWED BY THE ASSESSEE. THUS , CONSIDERING THE FACT THAT THE IDENTICAL GROUNDS OF APPEAL WAS DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2012-13. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) IN DIRE CTING THE AO TO ACCEPT THE SUO MOTO DISALLOWANCE U/S 14A OF THE ACT FOR RS. 83,272/-. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF AUGUST 2017. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/8/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGI STRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/