CRYSTAL IMPEX LTD, V. DCIT CIR 5(1),

MA 156/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9090 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 12-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHATURBHUJ DAS CHATNANI
• Assessee Lawyers: KETAN L VAJANI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER M.A. NO.156/M/2012 (AY:2006-2007) (ARISING OUT OF ITA NO.237/M/2010) M/S. CRYSTAL IMPEX LTD., MY HOME APARTMENT, LOWER BASEMENT NO.1, V.N. NAIL ROAD, GOWALIA TANK ROAD, MUMBAI 400 036. PAN: AAACC4475C VS. THE DCIT 5(1), AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KETAN L VAJANI RESPONDENT BY : SHRI CHATURBHUJ DAS CHATNANI DATE OF HEARING: 31.08.2012 DATE OF ORDER: 05.09.2012 O R D E R PER VIJAY PAL RAO, JM: THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE IS D IRECTED AGAINST THE ORDER DATED 15.7.2011 PASSED IN ASSESSEES APPEAL ITA NO. 237/M/2010 FOR THE ASSESSMENT YEAR 2006-2007. 2. THE ASSESSEE HAS POINTED OUT THAT WHILE DECIDING THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 15.7.2011, THIS TRIBUNAL HAS NOT A DJUDICATED THE GROUND NO.2 RAISED BY THE ASSESSEE IN THE APPEAL. THUS, THERE IS A MISTAKE APPARENT FROM THE RECORD CORRECT IN THE IMPUGNED ORDER OF THIS TRIBUN AL BEING NON-ADJUDICATION OF THE ISSUE RAISED IN GROUND NO. 2. 2 M.A. NO.156/M/2012 3. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAR NED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. LEARNED AR OF THE ASS ESSEE HAS SUBMITTED THAT THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS REGARDING DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) U/S 14A BY APPLYIN G RULE 8D. HE HAS FURTHER SUBMITTED THAT RULE 8D IS NOT APPLICABLE IN THE ASS ESSMENT YEAR UNDER CONSIDERATION AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MANUFACTURING PVT. LTD. 328 ITR 81 . THUS, THE LEARNED AR HAS SUBMITTED THAT NO DISALLOWANCE IS CALLED FOR U/S 14A IN RESPECT OF THE DIVIDEND INCOME WHEN THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR EARNI NG THE DIVIDEND INCOME. HE HAS FURTHER POINTED OUT THAT ASSESSEE ITSELF HAS DISALL OWED A REASONABLE AMOUNT WITH RESPECT TO STT, SERVICE TAX, D-MAT EXPENSE, FBT DEB ITED. THEREFORE, NO FURTHER DISALLOWANCE IS WARRANTED. 4. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THERE ARE COMMON EXPENSES IN THE NATURE OF ADMINISTRATIVE EXPENSES C LAIMED BY THE ASSESSEE, THEREFORE, A PROPORTIONATE AMOUNT IS LIABLE TO BE D ISALLOWED U/S 14A OF THE INCOME TAX ACT. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE ALLEGED DISALLOWANCE MADE BY THE ASSESSEE HIMSELF IS NOT WITH RESPECT TO THE COMMON EXPENSES I.E. ADMINISTRA TIVE EXPENSES. THEREFORE, A REASONABLE AMOUNT IS LIABLE TO BE DISALLOWED U/S 14 A. THE LEARNED AR HAS PRAYED THAT A REASONABLE ESTIMATE MAY BE MADE BY THIS TRIB UNAL, SINCE, THE AMOUNT OF DIVIDEND INCOME IS VERY LESS. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE ESTIMATE 3% 3 M.A. NO.156/M/2012 OF THE DIVIDEND INCOME TO BE DISALLOWED U/S 14A TOW ARDS ADMINISTRATIVE EXPENSES. ACCORDINGLY, THIS GROUND IS PARTLY ALLOWED. 6. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE A SSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 5 TH SEPTEMBER, 2012. SD/- SD/- (P.M. JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE :5.9.2012 AT :MUMBAI OKK COPY TO : 1. M/S. CRYSTAL IMPEX LTD., MUMBAI. 2. DCIT 5(1), MUMBAI. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR C, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI