HB Portfolio Ltd., New Delhi V. ITO, New Delhi

MA 185/DEL/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7510 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 16-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS PRATIMA KAUSHIK
• Assessee Lawyers: S K AGGARWAL
• Keywords: Opportunity of being heard; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER MISC. APPLICATION NO.185/DEL/2011 (IN I.T.A.NO.2241/DEL/2010) ASSESSMENT YEAR : 2005-06 M/S. H.B. PORTFOLIO LTD., INCOME-TAX OFFICER, H-72, CONNAUGHT CIRCUS, VS. WARD 12(3), NEW DELHI . NEW DELHI. PAN: AAACH3112P (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI S.K. AGGAR WAL, ADVOCATE. RESPONDENT BY : MRS. PR ATIMA KAUSHIK, SR. DR. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER THIS MISCELLANEOUS APPLICATION NO.185/DEL/2011 FILE D BY THE ASSESSEE, IS DIRECTED AGAINST ORDER PASSED BY ITAT IN ITA NO.2241/DEL/2010 FOR ASSESSMENT YEAR 2005-06, DATED 18 TH FEBRUARY, 2011. IN THE MISC. APPLICATION IT HAS BEEN STATED THAT THE ASSESSEE RA ISED FOUR GROUNDS OF APPEAL OUT OF WHICH, GROUND NO.2 WHICH RELATES TO DISALLOW ANCE OF ADMINISTRATIVE EXPENSES BY APPLYING RULE 8D READ WITH SEC. 14A OF THE INCOME-TAX ACT, 1961 WAS OMITTED TO BE DECIDED. IT HAS BEEN SUBMIT TED THAT DISALLOWANCE OF INTEREST AND FINANCIAL CHARGES UNDER SEC. 14A HAS B EEN SET ASIDE TO THE FILE OF 2 THE ASSESSING OFFICER TO BE DECIDED IN LINE WITH TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG . PVT. LTD. VS. DCIT, 328 ITR 81. HOWEVER, NO SUCH DIRECTION HAS BEEN GI VEN IN RESPECT OF ADMINISTRATIVE EXPENSES. THEREFORE, IT HAS BEEN SU BMITTED THAT SUITABLE DIRECTION MAY BE ISSUED WITH REFERENCE TO DISALLOWA NCE OF EXPENSES UNDER SEC. 14A OF THE ACT. 2. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDER OF ITAT CAREFULLY. WE FIND THAT THERE IS OMISSION ON THE P ART OF THE TRIBUNAL TO DECIDE GROUND NO.2 RELATING TO ADMINISTRATIVE EXPEN SES. SINCE THE ADMINISTRATIVE EXPENSES RELATING TO EXEMPT INCOME A RE SUBJECT TO DISALLOWANCE UNDER SEC. 14A, WE SET ASIDE THIS ISSU E TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RE-EXAMINE THE ISSUE IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF GODREJ & BOYCE MFG. PVT. LTD. (SUPRA). THE ASSESSING OFFICER IS D IRECTED TO PROVIDE THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 3. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE TRIBUNAL IN PARA 4 OF THE ORDER, HAS MENTIONED THAT 15% OF EXPE NDITURE COULD BE DISALLOWED. THE LEARNED AR OF THE ASSESSEE SUBMITT ED THAT IN EARLIER YEAR, THE TRIBUNAL HAS DISALLOWED 15% OF THE EXPENDITURE UNDER SEC. 14A OF THE ACT. HOWEVER, HE HAS NOT MADE ANY SUCH SUBMISSIONS . HE THEREFORE, 3 SUGGESTED THAT THE LANGUAGE USED IN PARA 4 OF THE O RDER COULD BE MODIFIED IN SUCH A WAY WHICH WOULD MEAN THAT 15% OF EXPENDITURE WAS DISALLOWED IN EARLIER YEAR. 4. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A SSESSEE. WE ARE IN AGREEMENT WITH THE SUBMISSIONS MADE BY THE ASSESSEE THAT THE ASSESSEE HAD NOT AGREED FOR DISALLOWANCE OF 15% OF EXPENDITURE. THE DISALLOWANCE HAS TO BE MADE IN THE LIGHT OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. PVT. LTD. (SUPRA). HOWEVER, THE SUBMISSIONS MADE BY THE ASSESSEE IN PARA 4 OF THE ORDER ARE MODIFIED AND EXISTING PARA 4 IS REPLACED BY THE FOLLOWING:- 4. BEFORE US, LD. A.R. SUBMITTED THAT THE ISSUE I S COVERED BY THE DECISION OF ITAT IN FAVOUR OF THE ASSESSEE IN W HICH, 15% OF EXPENDITURE WAS DISALLOWED. ON THE OTHER HAND LD. SR. DR SUPPORTED THE ORDER OF THE CIT(A). 5. IN VIEW OF ABOVE, THE MISC. APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN THE TERMS INDICATED ABOVE. 6. THIS ORDER WILL FORM PART OF ORDER DATED 18 TH FEBRUARY, 2011. 7. PRONOUNCED IN THE OPEN COURT ON 25 TH JANAURY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH JANUARY, 2012. 4 MA NO.185/DEL/2011 (IN ITA NO.2241/DEL/2010) COPY OF THE ORDER FORWARDED TO:- 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.