JHAWAR COMMODITIES P. LTD, MUMBAI V. ITO 4(2)(3), MUMBAI

ITA 8730/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8410 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 14-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGHDR PER R K
• Assessee Lawyers: NARAYAN ATAL
• Keywords: Opportunity of being heard; Retrospective amendment
• Section: 14A

Judgement Text

1 ITA NO.8730/MUM/2010 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI SMC SMC SMC SMC BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, ACCOUNANT MEMBER CCOUNANT MEMBER CCOUNANT MEMBER CCOUNANT MEMBER ITA NO. ITA NO. ITA NO. ITA NO. 8730/MUM/2010 8730/MUM/2010 8730/MUM/2010 8730/MUM/2010 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2007 2007 2007 2007- -- -08 0808 08) )) ) JHAWAR COMMODITIES P LTD 285 PRINCESS STREET C J HOUSE, 2 ND FLOOR MUMBAI 400 002 VS THE INCOME TAX OFFICER WARD 4(2)(3), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAACJ8915G AAACJ8915G AAACJ8915G AAACJ8915G ASSESSEE BY SHRI NARAYAN ATAL REVENUE BY SHRI SATBIR SINGH/DR PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSES IS DIRECTED AGAIN ST THE ORDER DATED 1.12.2010 OF THE CIT(A)-10, MUMBAI RELATING TO ASSE SSMENT YEAR 2007-08. 2. THE ASSESSEE, IN ITS GROUNDS OF APPAL, HAS CHA LLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 4,452, 562/- MADE BY THE ASSESSING OFFICER U/S 14A R.W.R 8D OF FINANCE ACT, 2008. 3 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E COMPANY IS ENGAGED AS COMMODITY BROKER, INVESTOR IN SHARES TRADING AND SE CURITIES. DURING THE YEAR UNDER CONSIDERATION IT RECEIVED DIVIDEND OF RS. 20, 70,072/-. THE ASSESSING OFFICER INVOKED PROVISIONS OF SEC. 14A R.W.R.8D AND DISALLO WED A SUM OF RS. 4,52,562/-. IN APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE A SSESSING OFFICER FOR WHICH THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 2 ITA NO.8730/MUM/2010 4 I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. THE JURISDICTIONAL HIG H COURT IN THE CASE OF GODREJ & BOYCE MFG P LTD VS ACIT REPORTED IN 328 ITR 81 HAS HELD THAT RULE 8D IS NOT APPLICABLE WITH RETROSPECTIVE EFFECT. SINCE THE AS SESSMENT YEAR IN THE IMPUGNED CASE IS 2007-08; THEREFORE, RULES 8D, WHICH WAS INS ERTED BY THE FINANCE ACT 2008 IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. HOWEVER, THE JURISDICTIONAL HIGH COURT, IN THE SAID ORDER, HAS H ELD THAT FOR THE PURPOSE OF DISALLOWANCE U/S 14A FOR THE EARLIER YEARS SOME REA SONABLE BASIS HAS TO BE ADOPTED. I THEREFORE, DEEM IT PROPER TO RESTORE TH IS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO MAKE SOME R EASONABLE DISALLOWANCE U/S 14A AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING I.E. ON 23.2.2011. SD/- ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 23 RD , FEB 2011 RAJ* 3 ITA NO.8730/MUM/2010 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI