PIEM HOTELS LTD, MUMBAI V. ADDL CIT RG 3(2), MUMBAI

ITA 978/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2610 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MAHAPATRA
• Section: 143(3); 14A

Judgement Text

PIEM HOTELS LTD ITA 978 /M/201 4 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO. : 978 /MUM/20 1 4 (ASSESSMENT YEAR :20 1 0 - 1 1 ) PIEM HOTELS LTD , TAJ PRESIDENT, 90, CUFFE PARADE, COLABA, MUMBAI - 400 005 .: PAN: A AACP 8376 M VS ADDL CIT RANGE 3(2), AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 020 (APPELLANT (RESPONDENT) APPELLANT BY : SHRI DHARMESH SHAH RESPONDENT BY : SHRI S K MAHAPATRA /DATE OF HEARING : 23 - 0 7 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 10 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE A FORESAID APPEAL FILED BY THE ASSESSEE IS AGAINST IMPUGNED ORDER DATED 06 . 12 .201 3 , PASSED BY CIT(A) - 4 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 20 1 0 - 1 1 , VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : 1. TH E L D . C OMMISSIONER OF I NCOME T AX (A PPEALS) HAS ERRED IN LAW AND FACTS IN PASSING THE ORDER U/S 250 OF THE ACT PARTLY ALLOWING THE APPEAL FILED BY THE APPELLANT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE DISALLOWANCE ON ACCOUNT OF EXPENSES U/S 14A OF THE ACT AMOUNTING TO RS. 34,06,820/ - . PIEM HOTELS LTD ITA 978 /M/201 4 2 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN REJECTING T HE APPELLANTS CLAIM OF DISALLOWANCE U/S 14A OF THE ACT WITHOUT FOLLOWING THE PROVISIONS OF RULE 8D(1). 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE DISALLOWANCE OF RS. 34,06,820/ - DETERMINED BY T HE ASSESSING OFFICER APPLYING RULE 8D(2) WAS INCORRECT AND UNJUSTIFIED. 2. BRIEF FACTS ARE THAT, THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF HOTEL & CATERING SERVICES. THE AO NOTED THAT ASSESSEE COMPANY HAS SHOWN INVESTMENT TO THE EXTENT OF RS. 102,25,71,000/ - FROM WHICH A DIVIDEND INCOME EARNED H AS NOT BEEN INCLUDE D IN THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE RECEIVED TAX FREE DIVIDEND INCOME O F RS. 1,63,06,763/ - , WHICH H AS BEEN CLAIMED AS EXEMPT. I N RESPONSE TO THE SHOW CAUSE NOTICE, ASSESSEE SUBMITTED THAT IT HAS ESTIMATED RS. 34,309/ - FOR THE PURPOSE OF DISALLOWANCE U/S 14A AND NO FURTHER DISALLOWANCE IS CALLED FOR. HOWEVER, THE AO REJECTED THE ASSESSEES EXPLANATION WITH REGARD DISALLOWANCE OFFERED IN THE RETURN OF INCOME AND HELD THAT SAME IS TO BE CALCULATED AS PER RULE 8D ONLY AND ACCORDINGLY, DISALLOWANCE OF RS. 31,41,129/ - WAS WORKED OUT AS PER THE FORMULA LAID DOWN UNDER RULE 8D . 3. BEFORE THE CIT(A), ASSESSEE SUBMITTED THAT, IT HAS DISALLOWED SALARY AND ADMINISTRATIVE EXPENSES OF STAFF OF TWO PERSONS OF RS. 31,000/ - AND DEMAT CHARGES AT RS. 3,309/ - . LATER ON, THE ASSESSEE HAD REVISED ITS COMPUTATION AND HAD OF FERED THE DISALLOWANCE OF RS. 5,71,600/ - . THE AO , AFTER FILING OF THE REVISED COMPUTATION HAS NOT GIVEN ANY SATISFACTORY REASONS, AS TO WHY SUCH A DISALLOWANCE OFFERED BY THE ASSESSEE IS NOT APPROPRIATE . THE ASSESSEES SUBMISSIONS IN THIS REGARD HA S BEEN D EALT BY THE CIT(A) PIEM HOTELS LTD ITA 978 /M/201 4 3 IN DETAIL AND FOLLOWING THE EARLIER YEAR DECISION OF THE CIT(A), HE CONFIRMED THE SAID DISALLOWANCE MADE BY THE AO . 4. BEFORE US, IT HAS BEEN ADMITTED THAT, THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUN AL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10 AND ALSO AY 2008 - 09, WHEREIN THE TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF THE AO. AFTER CONSIDERING THE IMPUGNED ORDER AND ALSO ORDERS OF THE TRIBUNAL FOR THE AY S 2008 - 09 & 2009 - 10, WE FIND THAT THIS ISSUE OF DISALLOWANCE U/S 14A HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A) TO ANALYSE THE INVESTMENT PATTERN AND ACCORDINGLY TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH THE LAW. HOWEVER, WE ARE OF THE OPINION THAT THIS MATTER REQUIRED FRESH CON SIDERATION FROM THE AO. THEREFORE, WE SET ASIDE THIS MATTER TO THE FILE OF THE AO AND DIRECT HIM TO DEAL AND DECIDE THE ISSUE AFRESH AND AN OPPORTUNITY SHOULD BE AFFORDED TO THE ASSESSEE TO RAISE ALL I T S ARGUMENTS , INCLUDING LEGAL ISSUES AS CULLED OUT FROM JUDICIAL PRONOUNCEMENTS IN SUPPORT OF I T S CONTENTIONS. ACCORDINGLY, THE GROUND RAISED BY OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER , 2015. SD/ - SD/ - ( . ) ( ) ( D. KARUNAKARA RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH OCTOBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 4 , MUMBAI. 4 ) THE CIT - 3 , MUMBAI. PIEM HOTELS LTD ITA 978 /M/201 4 4 5 ) , , / THE D.R. C BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS