DCIT CC 39, MUMBAI V. MASITIA CAPITAL SERVICE LTD, MUMBAI

ITA 842/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71178 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL G GG G BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , !' !' !' !' #$ #$ #$ #$ % % % % & & & & , . BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH, AM , AM , AM , AM & && & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.840/MUM/2011 840/MUM/2011 840/MUM/2011 840/MUM/2011 ( '( '( '( '( ) ) ) ) / ASSESSMENT YEAR:2004-05) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.841/MUM/2011 841/MUM/2011 841/MUM/2011 841/MUM/2011 ( '( '( '( '( ) ) ) ) / ASSESSMENT YEAR:2005-06) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.842/MUM/2011 842/MUM/2011 842/MUM/2011 842/MUM/2011 ( '( '( '( '( ) ) ) ) / ASSESSMENT YEAR:2006-07) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.843 843 843 843/MUM/2011 /MUM/2011 /MUM/2011 /MUM/2011 ( '( '( '( '( ) ) ) ) / ASSESSMENT YEAR:2007-08) DCIT, CC-39 R. NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M. K. RD. MUMBAI-400020 ( ( ( ( / VS. M/S MASITIA CAPITAL SERVICE LTD 142-ANDHERI INDUSTRIAL ESTATE, OPP., VEERA DESAI ROAD, ANDHERI (W) MUMBAI-400053 $* !' ./ + ./ PAN/GIR NO. :AACCM3929K ( *, / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( -.*, / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) *, *, *, *, / / / / ! !! ! / APPELLANT BY : SHRI K. C. P. PATNAIK -.*, -.*, -.*, -.*, 0 00 0 / / / / ! !! ! /RESPONDENT BY : SHRI VIJAY MEHTA ( ( ( ( 0 00 0 1' 1' 1' 1' / DATE OF HEARING : 10 TH SEPTEMBER 2013 23) 23) 23) 23) 0 00 01' 1' 1' 1' /DATE OF PRONOUNCEMENT: 18 TH SEPTEMBER 2013 #!4 / O R D E R PER : & , . . / VIJAY PAL RAO, JM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE COMPOSITE ORDERS DATED 8.11.2010 OF COMMISSIONER OF INCOME TA X(APPEALS) FOR THE ASSESSMENT YEAR 2004-05 TO 2007-08. 2. THE REVENUE HAS RAISED COMMON GROUNDS IN THESE A PPEALS. THE GROUNDS FOR THE ASSESSMENT YEAR 2004-05 IS REPRODUC ED AS UNDER: ITA NO. 840 TO 843/M/2011 MASITIA CAPITAL SERVICE LTD. 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CJT(A) ERRED IN RESTRICTING THE ADDITION MADE BY THE AO TO 10% ON ACCOUNT OF DISALLOWANCE U/S 14A ON THE BASIS OF THE DECISION OF THE HONBLE ITAT IN THE CA SE OF ACIT VS. GLENMARK PHARMACEUTICALS LTD. ITA NO.683 L/MUM/2008 . 2. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN FOLLOWING THE DECIS ION OF THE BOMBAY HIGH COURT IN THE CASE OF M/S. GODREJ & BOYC E MANUFACTURING CO. LTD. IN ITA NO. 6626 OF 2010 AND WRIT PETITION NO.758 OF 2010 TO HOLD THAT RULE 8D IS APPLICABLE F ROM A.Y. 2008- 09 AND ITS APPLICABILITY CANNOT REGARDED AS RETROSP ECTIVE. 3. WE HAVE HEARD THE LD. DR AS WELL LD. AR AND CONS IDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS SHOWN DIVIDEND INCOME FOR ALL THESE FOUR YEARS. THE ASSESSING OFFICER MADE DI SALLOWANCE U/S 14A BY APPLYING RULE 8D OF INCOME TAX RULES. ON APPEAL, TH E CIT(A) HAS HELD THAT RULE 8D IS NOT APPLICABLE FOR THE ASSESSMENT YEAR U NDER CONSIDERATION IN VIEW OF THE DECISION OF HONBLE JURISDICTION HIGH C OURT IN CASE OF M/S GODREJ & BOYCE MANUFACTURING CO. LTD. VS DCIT 328 I TR 81 . ACCORDINGLY, THE CIT(A) HAS RESTRICTED THE DISALLOWANCE U/S 14A TO 10% OF THE DIVIDEND INCOME BY FOLLOWING THE DECISION OF THIS TRIBUNAL I N CASE OF ACIT VS GLENMARK PHARMACEUTICALS LTD. AT THE OUTSET IT HAS BEEN BROUGHT TO OUR NOTICE THAT IN THE CASE WERE RULE 8D IS NOT APPLICA BLE, THIS TRIBUNAL HAS TAKEN A VIEW THAT EVEN 2% OF THE DIVIDEND INCOME IS A REASONABLE AMOUNT OF DISALLOWANCE ON ACCOUNT OF ADMINISTRATIVE AND MA NAGERIAL EXPENSES U/S 14A. SINCE THE CIT(A) HAS RESTRICTED THE DISALLOWAN CE TO 10% OF THE DIVIDEND INCOME THEREFORE, IN LIGHT OF THE SERIES O F THIS TRIBUNAL ON THIS ISSUE WE ARE OF THE VIEW THAT THE DISALLOWANCE MADE BY THE CIT(A) IS PROPER AND REASONABLE. ACCORDINGLY, WE DO NOT FIND ANY ERROR AND ILLEGALITY IN THE ORDER OF THE CIT(A). THE SAME IS UPHELD. ITA NO. 840 TO 843/M/2011 MASITIA CAPITAL SERVICE LTD. 3 4. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF SEPTEMBER 2013 SD/- SD/- ( ) !' #$ ( RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH ) ACCOUNTANT MEMBER ( & ) ' #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 18 TH SEPTEMBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI