ACIT, CHENNAI V. M/s. Tractors and Farm Equipments Ltd., CHENNAI

ITA 814/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61206 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] I.T.A.NO.814/MDS/2012 ASSESSMENT YEAR : 2005-06 THE ACIT COMPANY CIRCLE III(2) CHENNAI VS M/S TRACTORS AND FARM EQUIPMENT LTD 35, NUNGAMBAKKAM HIGH ROAD NUNGAMBAKKAM CHENNAI 600 034 [PAN AAACT 2761Q] (APPELLANT) (RESPONDENT) APPELLANT BY : DR. S. MOHARANA, CIT/DR RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE DATE OF HEARING : 20-06-2012 DATE OF PRONOUNCEMENT : 22-06-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVEN UE AGAINST THE ORDER OF THE CIT(A)-VI, CHENNAI, DATED 13.1.2012. 2. THE SOLE ISSUE RAISED IN THIS APPEAL BY THE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 14A AND IN HOLDING THAT INVOKING THE PROVISIONS OF RULE 8D IS NOT IN O RDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED ` 82,47,000/- U/S 14A CONSIDERING THE AGRICULTURAL INCOME OF ` 15,01,967/- AND DIVIDEND INCOME FROM SUBSIDIARY OF ` 85.77 LAKHS I.T.A.NO.814/12 :- 2 -: BY APPLYING RULE 8D AND BY RELYING ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS DAGA CAPITAL MANAGEMENT LTD, 119 TTJ 289. 4. BEFORE THE CIT(A), THE ASSESSEE ARGUED THAT THE RE LIANCE PLACED BY THE ASSESSING OFFICER ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS DAGA CAPITAL MANAGEMENT LTD (SUPRA) WAS OVERRULED BY THE HON'BLE BOMBAY HIGH CO URT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD VS CIT, 328 ITR 81, WHEREIN THE HON'BLE COURT HELD THAT RULE 8D CANNOT BE APPLI ED RETROSPECTIVELY. THE ASSESSEE ALSO RELIED ON THE DECISION OF THE CH ENNAI BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEA R 2004-05 IN I.T.A.NO. 372/MDS/2009, ORDER DATED 4.9.2009, WHERE IN IT HAS BEEN HELD THAT NO DISALLOWANCE NEEDS TO BE MADE UNDER TH IS SECTION. THE CIT(A), FOLLOWING THE ORDER OF THE TRIBUNAL, DELETE D THE DISALLOWANCE MADE U/S 14A OF THE ACT. 5. AT THE TIME OF HEARING, THE A.R SUPPORTED THE ORDER OF THE CIT(A). 6. ON THE OTHER HAND, THE CIT/DR VERY FAIRLY CONCEDED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE FOR ASSESSMENT YEAR 2004-05 VIDE ORDER DATED 4.9.2009 IN I.T.A.NO. 732/MDS/2009. I.T.A.NO.814/12 :- 3 -: 7. WE FIND THAT THE CIT(A) HAS DELETED THE DISALLOWANC E MADE U/S 14A OF THE ACT BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 BY OBSERVING THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD VS CIT(SUPRA) HAS HELD THAT R ULE 8D CANNOT BE APPLIED RETROSPECTIVELY AND THE AMENDED PROVISION W ILL APPLY FROM ASSESSMENT YEAR 2008-09 AND ONWARDS. WE FIND THAT THE PRESENT ASSESSMENT YEAR UNDER CONSIDERATION IS ASSESSMENT Y EAR 2005-06. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE CIT(A). IT IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON FRIDAY, THE 22 ND OF JUNE, 2012, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 22 ND JUNE, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR