LADDERUP FINANCE LIMITED , MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX-10(2)(1), MUMBAI

MA 247/MUM/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 4088 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: APARNA SHIVA KUMAR
• Keywords: Earning of tax free income; Rule 8D
• Section: 201; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 247/MUM/2019 ( ITA NO. 5893/MUM/2017 ) ASSESSMENT YEAR: 2012 - 13 M/S LADDERUP FINANCE LTD., A - 204, RAJESHRI ACCORD, TELLY CROSS LANE, OFF S.N. ROAD, ANDHERI (E), MUMBAI - 400053. VS. DCIT - 10(2)(1), AAYAKAR BHAVAN, MUMBAI. PAN NO. AAACL0882G ASSESSEE BY : MS . APARNA SHIVA KUMAR, AR REVENUE BY : MR. ABIRAMA KARTHIKEYAN , DR DATE OF HEARING : 16 /0 6 /2019 DATE OF PRONOUNCEMENT : 04/09/2019 ORDER PER N.K. PRADHAN, AM BY MEANS OF THIS MISCELLANEOUS APPLICATION (MA), THE APPLICANT SE EKS MODIFICATION OF THE ORDER DATED 22 . 01 .2019 PASSED BY THE ITAT A BENCH MUMBAI (ITA NO. 5893 /MUM/2017 ) FOR THE ASSESSMENT YEAR (AY) 201 2 - 1 3 . 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL, THE BENCH HAS NOT DEALT WITH THE WITHOUT PREJUDICE GROUND I.E. GROUND NO. 3 , WHEREIN THE CLAIM WAS MA DE TO CONSIDER ONLY EXEMPT INCOME YIELDING INVESTMENTS FOR THE PURPOSE OF CALCULATION OF DISALLOWANCE UNDER RULE 8D(2)(III) OF THE INCOME TAX M/S LADDERUP FINANCE MA NO. 247/MUM/2019 2 RULES, 1962. IT IS STATED BY HIM THAT THIS ISSUE HAS BEEN DECIDED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V. VIREET INVESTMENT (P.) LTD. (82 TAXMANN.COM 415) (DEL - TRIB) (SB). ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITS THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER DATED 22.01.2019 PASSED BY THE TRIBUNAL AND THERE FORE, THE MA BE DISMISSED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE 3 RD GROUND OF APPEAL IN THE INSTANT CASE READS AS UNDER : WITHOUT PREJUDICE TO GROUND NO. 1(A) & (B), THE LD. CIT(A) ERRED IN FACTS AND L AW IN NOT EXCLUDING THE INVESTMENTS FROM WHICH NO EXEMPT INCOME IS EARNED IN THE YEAR UNDER CONSIDERATION WHILE UPHOLDING THE DISALLOWANCE U/R 8D(2)(III). THERE IS MERIT IN THE CONTENTIONS OF THE LD. COUNSELS THAT THE TRIBUNAL IN THE IMPUGNED ORDER HAS NOT DEALT WITH THE WITHOUT PREJUDICE GROUND I.E. GROUND NO. 3 , WHEREIN CLAIM WAS MADE TO CONSIDER ONLY EXEMPT INCOME YIELDING INVESTMENTS FOR THE PURPOSE OF CALCULATION OF DISALLOWANCE UNDER RULE 8D(2)(III). THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF VIREET INVESTMENT (P.) LTD . (SUPRA) HAS HELD THAT ONLY THOS E INVESTMENTS ARE TO BE CONSIDERED FOR COMPUTING AVERAGE VALUE OF INVESTMENT WHICH YIELDED EXEMPT INCOME DURING THE YEAR. IN VIEW OF THE ABOVE, WE MODIFY OUR ORDER DATED 22.01.2019 TO THE ABOVE EXTENT AND DIRECT THE AO TO RESTRICT THE DISALLOWANCE U/S 1 4A READ M/S LADDERUP FINANCE MA NO. 247/MUM/2019 3 WITH RULE 8D(2)(III) BY CONSIDERING ONLY THOSE INVESTMENTS FROM WHICH EXEMPT INCOME HAS BEEN EARNED DURING THE YEAR UNDER CONSIDERATION. 4. IN THE RESULT, THE MA IS ALLOWED TO THE EXTENT INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 04/ 09/2019. SD/ - SD/ - (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 04/09/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI