MAHESHWARI SHARE & SATOCK BROKERS P.LTD, MUMBAI V. ASST CIT CIR 4(2), MUMBAI

ITA 8740/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87934 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH, MUMBAI . . , , . . , ! BEFORE SHRI I.P. BANSAL, JM AND SHRI B.R. BASKAR AN, AM ./ I.T.A. NO. 8740/MUM/2011 ( ' ' ' ' / ASSESSMENT YEAR :2008-09 M/S. MAHESHWARI SHARE & STOCK BROKERS PVT. LTD., 522, COTTON EXCHANGE BLDG., 175, KALBADEVI ROAD, MUMBAI-400 002 THE ACIT, CIRCLE-4(2), MUMBAI # ./ $% ./PAN/GIR NO. : AACCM 2239A ( #& /APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY : ` NONE '(#& * ) /RESPONDENT BY : SHRI VIVEK BATRA * +, / DATE OF HEARING :07.01.2015 -.' * +, / DATE OF PRONOUNCEMENT :07.01.2015 / / O R D E R PER I.P BANSAL, JM: THE APPEAL IS FILED BY THE ASSESSEE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY LD. CIT(A)-8, MUMBAI DT. 29.11.2011 FOR A .Y. 2008-09. 2. THE GROUND OF APPEAL READS AS UNDER: ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION OF LD. AO IN DISALLOWING A SUM OF RS. 6,11,691/- U/S. 14A OF THE I.T. ACT 1961 BY INVOKING THE RULE 8D, WITHOUT GIVI NG THE ITA NO.8740/M/2011 2 FINDINGS THAT THE DISALLOWANCE MADE BY THE ASSESSEE OF RS. 3,78,014/- AGAINST THE EXEMPT INCOME IS NOT ACCEPTE D. 3. THOUGH IT IS THE CLAIM OF THE ASSESSEE THAT IT HAD DISALLOWED A SUM OF RS. 3,78,014/- AGAINST EXEMPT INCOME UNDER THE PROVISIONS OF SEC. 14A BUT THIS FACT IS NOT RECORDED IN THE ASSESSME NT ORDER AND THE ASSESSING OFFICER HAS PROCEEDED TO MAKE DISALLOWANC E AS PER RULE 8D WITHOUT EXAMINING THE CLAIM OF THE ASSESSEE THAT DI SALLOWANCE WAS REQUIRED TO BE MADE ONLY TO THE EXTENT OF RS. 3,78, 014/-. SUCH SUBMISSION OF THE ASSESSEE HAS BEEN RECORDED BY THE LD. CIT(A) IN PARA 2.6 BUT LD. CIT(A) DID NOT RECORD AS TO WHY SUCH C LAIM OF THE ASSESSEE WAS NOT ACCEPTABLE. IT IS IN THESE CIRCUMSTANCES, T HE ASSESSEE HAS RAISED AFOREMENTIONED GROUND OF APPEAL. 4. THE CAPTIONED APPEAL IS FIXED FOR HEARING ON 07. 01.2015. AS PER OUR ORDER SHEET NOTING DT. 1.7.2014 AS ON 1.7.2014, THE BENCH DID NOT FUNCTION. ON 7.1.2015 NONE WAS PRESENT ON BEHALF O F THE ASSESSEE, THEREFORE, WE PROCEED TO DECIDE THE PRESENT APPEAL EX- PARTE ON MERIT QUA THE ASSESSEE. 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER PASSED BY AO & LD. CIT(A). 6. WE HAVE HEARD THE LD. DR AND WE HAVE CAREFULLY G ONE THROUGH THE ASSESSMENT ORDER AND ORDER PASSED BY LD. CIT(A). A S PER MANDATE OF SEC. 14A(2), THE AO SHALL DETERMINE THE AMOUNT OF E XPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT IN ACCORDANCE WITH SUCH METHOD AS MA Y BE PRESCRIBED. SUCH METHOD IS PRESCRIBED IN RULE 8D AND THE CONDIT ION LAID DOWN IS THAT AO, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN ITA NO.8740/M/2011 3 RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. THEREFORE, AS PER MANDATE OF SUB-SECTION (2) O F SEC. 14A, THE AO IS REQUIRED TO RECORD DISSATISFACTION REGARDING THE IN CORRECTNESS OF THE CLAIM OF THE ASSESSEE WHICH IS ABSENT IN THE PRESENT CASE . IN THE CIRCUMSTANCES, WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSU E TO THE FILE OF THE AO WITH A DIRECTION TO RECORD HIS NON-SATISFACTION ABO UT THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE AND THEREAFTER GIVING THE ASS ESSEE A REASONABLE OPPORTUNITY OF HEARING HE WILL READJUDICATE THE IS SUE AS PER PROVISIONS OF LAW. WE DIRECT ACCORDINGLY. 7. FOR STATISTICAL PURPOSE, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 07.01.2015 . / * .' 0 12 7.1.2015 . * 3 SD/- SD/- (B.R. BASKARAN) (I.P. BANSAL ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 1 DATED :7 TH JANUARY, 2015 . . ./ RJ , SR. PS ITA NO.8740/M/2011 4 / / / / * ** * '+4 '+4 '+4 '+4 54'+ 54'+ 54'+ 54'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 43 '+ , , / DR, ITAT, MUMBAI 6. 37 8 / GUARD FILE. / / / / / BY ORDER, (4+ '+ //TRUE COPY// 9 99 9 / : : : : $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI