MANUGRAPH INDIA LTD, MUMBAI V. DCIT CEN CIR 25, MUMBAI

ITA 830/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7893 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 03-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARESH KUMAR BALODIA
• Assessee Lawyers: S N INAMDAR
• Keywords: Business income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVA N, JM ITA NO.830/MUM/2010 : ASST.YEAR 2006-2007 M/S.MANUGRAPH INDIA LIMITED SIDHWA HOUSE, N.A. SAWANT MARG COLABA, MUMBAI 400 005. PAN : AAACM7246H. VS. THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 25 MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.N.INAMDAR RESPONDENT BY : SHRI NARESH KUMAR BALODIA O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 30.11.2009 IN RELATION TO ASSESSMENT YEAR 2006-2007 . 2. FIRST GROUND IS AGAINST THE INCLUSION OF RS.4,44 ,78,753 BEING SURPLUS ON PREPAYMENT OF SALES-TAX (DEFERRAL) LOANS IN THE COM PUTATION OF BUSINESS INCOME. 3. AT THE VERY OUTSET THE LEARNED COUNSEL FOR THE A SSESSEE CONTENDED THAT THIS ISSUE HAS BEEN DECIDED BY THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF M/S.SULZER INDIA LIMITED VS. ACIT ITA NO.2944/MUM/2 007 & ORS., DATED 10.11.2010 IN FAVOUR OF THE ASSESSEE. THE LEARNED D EPARTMENTAL REPRESENTATIVE HOWEVER CONTENDED THAT MISCELLANEOUS APPLICATION HA S BEEN FILED AGAINST THE SAID ORDER WHICH IS STILL PENDING FOR ADJUDICATION. IT W AS HOWEVER ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE INSTANT GROUND ARE SIMILAR TO THOSE CONSIDERED AND DECIDED IN THE CASE OF SULZER INDIA LIMITED (SB) (MUM.) (SU PRA). UNDER SUCH CIRCUMSTANCES WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MAT TER TO THE FILE OF A.O. FOR TAKING DECISION IN ACCORDANCE WITH THE FINAL VIEW TAKEN BY THE SPECIAL BENCH IN SULZER INDIA LIMITED (SB) (MUM.) (SUPRA). ITA NO.830/MUM/2010 M/S.MANUGRAPH INDIA LIMITED. 2 4. GROUND NO.2 IS AGAINST THE CONFIRMATION OF DISAL LOWANCE OF RS.17,70,067 MADE BY THE ASSESSING OFFICER U/S.14A. THE A.O. COM PUTED THE DISALLOWANCE U/S.14A AT RS.17,70,067. WHEN THE MATTER CAME UP BE FORE THE LEARNED CIT(A), HE DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DISAL LOWANCE U/S.14A AS PER RULE 8D, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE QUESTION OF MAKING DISALLOWANCE U/S 14A IS NO MORE RES INTEGRA IN VIEW OF THE RECENT JUDGMENT DATED 12.08.2010 OF THE HONBLE BOMBAY HIGH COURT IN GODREJ & BOYCE LTD. MFG. CO. VS. DCIT (2010) 328 ITR 81 (BOM) HOLDING THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE IN CIRCUMSTANCES AS ARE PREVAILING PRESE NTLY AND THE DISALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME `REASONABLE BASIS AND NOT RULE 8D. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISALLOWANCE, IF ANY, AS PER THE AFORE-NOTED JUDGMENT, AFTER ALLOWING A REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 18 TH DAY OF MARCH, 2011 . SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 18 TH MARCH, 2011. DEVDAS* ITA NO.830/MUM/2010 M/S.MANUGRAPH INDIA LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XXXIX, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.