DCIT 3(3), V. UDHAV HOLDINGS P.LTD,

MA 281/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2393 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH CHAMARIA
• Section: 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER MA NO.281/M/2014 (ARISING OUT OF ITA NO.2318/M/2012) ASSESSMENT YEAR: 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX -3(3), MUMBAI, ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. UDHAV HOLDING PVT. LTD. 11-A, MITTAL CHAMBERS, NARIMAN POINT, MUMBAI 400 021 PAN: AAACU080K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH CHAMARIA, A.R. REVENUE BY : SHRI DURGA DUTT, D.R. DATE OF HEARING : 01.08.2014 DATE OF PRONOUNCEMENT : 01.08.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FIL ED BY THE DEPARTMENT ALLEGING THAT AN ERROR APPARENT ON RECORD HAS OCCUR RED IN THE ORDER DATED 16.08.13 OF THIS TRIBUNAL. 2. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.10,06,57,730/-. THE ASSESSEE COMPANY ITSELF DIS ALLOWED RS.84,38,356/- OUT OF INTEREST UNDER SECTION 14A OF THE INCOME TAX ACT IN THE RETURN OF INCOME FILED ON 31.10.07. THE ASSESSING OFFICER (HEREINAF TER REFERRED TO AS THE AO) ASSESSED THE DISALLOWANCE UNDER SECTION 14A AS WAS OFFERED BY THE ASSESSEE IN ITS RETURN OF INCOME. ITA NO. MA NO.281/M/2014 (ARISING OUT OF ITA NO.2318/M/2012) M/S. UDHAV HOLDING PVT. LTD. 2 3. THE SECTION 14A WAS AMENDED BY FINANCE ACT, 2006 AND AS SUCH RULE 8D WAS INSERTED IN THE INCOME TAX RULES WHICH PRESC RIBED THE FORMULA FOR CALCULATING OF DISALLOWANCE UNDER SECTION 14A OF TH E ACT. 4. THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME T AX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] TOOK THE GR OUND THAT THE ASSESSEE HAD OFFERED EXCESSIVE DISALLOWANCE UNDER SECTION 14A IN ITS RETURN OF INCOME AND THAT THE SAME SHOULD HAVE BEEN RESTRICTED TO AS PER THE PROVISIONS OF RULE 8D. HOWEVER, THE LD. CIT (A) MISUNDERSTOOD THE FACTS OF THE CASE AS IF THE AO HAD MADE DISALLOWANCE UNDER RULE 8D AND FURTHER THAT AS IF THE ASESSEE WAS AGITATING THE APPLICATION OF RULE 8D BY THE AO. HE THEREFORE HELD THAT IN VIEW OF THE LAW LAID DOWN BY THE HONBLE BOMBAY HIGH COU RT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. VS. DCIT RE PORTED IN (2010) 328 ITR 81 (BOM), APPLICATION OF RULE 8D WAS PROSPECTIV E FROM ASSESSMENT YEAR 2008-09 AND THAT FOR THE ASSESSMENT YEAR IN QUESTIO N I.E. ASSESSMENT YEAR 2007- 08 RULE 8D WAS NOT APPLICABLE. HE, THEREFORE, REMA NDED THE MATTER TO THE AO TO MAKE THE DISALLOWANCE UNDER SECTION 14A NOT AS P ER RULE 8D BUT ON SOME REASONABLE BASIS. 5. SURPRISINGLY, THE REVENUE DID NOT FILE ANY APPEA L AGAINST THE ORDER OF THE LD. CIT (A) BUT THE ASSESSEE FILED THE APPEAL BEFOR E THIS TRIBUNAL. THE TIBUNAL VIDE THE IMPUGNED ORDER REITERATED THE DIRECTIONS A S WERE GIVEN BY THE LD. CIT (A). NOW THE REVENUE HAS MOVED THE PRESENT APPLICA TION THAT THERE IS AN ERROR APPARENT ON RECORD. THOUGH WE MAY FIND THAT THERE W AS A WRONG APPRECIATION OF THE FACTS BY THE CIT(A), HOWEVER THE FACT WHICH CANNOT BE LOST OF SIGHT IS THAT THE REVENUE DID NOT PREFER ANY APPEAL AGAINST THE ORDER OF THE LD. CIT (A). SINCE THE REVENUE HAS FAILED TO AVAIL ITS REMEDY OF APPEAL AGAINST THE ORDER OF THE CIT(A), NOW AT THIS STAGE THE ORDER OF THE LD. CIT (A) ON MERITS CANNOT BE AGITATED UNDER LAW THROUGH THIS MISCELLANEOUS APPLI CATION. ITA NO. MA NO.281/M/2014 (ARISING OUT OF ITA NO.2318/M/2012) M/S. UDHAV HOLDING PVT. LTD. 3 6. WE DO NOT FIND ANY ERROR APPARENT ON RECORD OF T HE IMPUGNED ORDER. IN THE RESULT, THE APPLICATION OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.08.2014. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 01.08.2014. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.