MERCK LTD, V. ASSTT CIT CIR 6(3),

MA 377/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1686 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2006-2007
• Appeal Filed On: 15-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: AJEET C SHAH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL K B ENCH, MUMBAI . . , , !'# , $ % BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER M.A. NO. 377/MUM/2013 (ARISING OUT OF I.T.A. NO. 8222/MUM/2010 ( & & & & / ASSESSMENT YEAR : 2006-07 M/S. MERCK LTD., (FORMERLY E. MERCK (I) LTD., LLOYDS CENTRE POINT, UNIT NO. 21 & 22, 2 ND FLOOR, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI-400 025 THE ACIT, CIRCLE 6(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 ' $ ./ () ./PAN/GIR NO. : AAACE 2616F ( '* /APPLICANT ) .. ( +,'* / RESPONDENT ) '* - / APPLICANT BY : ` SHRI AJEET C. SHAH +,'* . - /RESPONDENT BY : M.L. PERUMAL . /0$ / DATE OF HEARING :07.02.2014 12& . /0$ / DATE OF PRONOUNCEMENT : 07.02.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE IS D IRECTED AGAINST THE ORDER OF THE TRIBUNAL IN ITA NO. 8222/M/2010 FO R A.Y. 2006-07. 2. IT IS THE CONTENTION OF THE ASSESSEE THAT WHILE DECIDING THE APPEAL IN ITA NO. 8222/M/2010 FOR A.Y. 2006-07, GROUND NO. 2. 6 HAS NOT BEEN M.A. NO. 377/M/2013 2 ADJUDICATED UPON AND IT WAS PRAYED THAT THE TRIBUNA L BE PLEASED TO ADJUDICATE THE SAID GROUND. 3. WE HAVE CAREFULLY PERUSED OUR ORDER IN ITA NO. 8 222/M/10. WE FIND THAT THE TRIBUNAL HAS DISPOSED OFF THE APPEALS PERTAINING TO A.Y. 2004-05, 2005-06 AND 2006-07 BY A CONSOLIDATED ORDE R. IT IS THE FACT THAT WHILE DECIDING THE APPEAL FOR A.Y. 2006-07, THE TRI BUNAL DID NOT ADJUDICATE THE ISSUE RELATING TO THE DISALLOWANCE U /S. 14A OF THE ACT RAISED VIDE GROUND NO. 2.6. WE ALSO FIND THAT THE SAID GR IEVANCE WAS ALSO THERE IN THE EARLIER ASSESSMENT YEAR IN ITA NO. 2393/M/09 FOR A.Y. 2004-05. WE ACCORDINGLY MODIFY OUR FINDINGS FOR A.Y. 2006-0 7 IN ITA NO. 8222/M/2010 AND DECIDE THE GRIEVANCE OF THE ASSESSE E RAISED VIDE GROUND NO. 2.6 AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOW WELL SET TLED THAT APPLICATION OF RULE 8D IS PROSPECTIVE AND APPLICABL E FROM A.Y. 2008-09 AS PER THE DECISION OF THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. 328 ITR 81. HOWEVER, AT THE SAME TIME, WE FIND THAT IN ASSESSEE S OWN CASE FOR A.Y. 2007-08 THE TRIBUNAL IN ITA NO. 8120/M/2011 AT PARA-31 OF ITS ORDER HAS HELD THAT IT WILL BE REASONABLE AND FAIR TO CONSIDER 1% OF EXEMPT INCOME TOWARDS EXPENSES FOR EARNING TH E DIVIDEND INCOME BY THE ASSESSEE IN THE FINANCIAL YEAR UNDER CONSIDERATION . FACTS AND CIRCUMSTANCES BEING IDENTICAL, WE HAVE NO HESITATION IN FOLLOWING THE DECISION OF THE TRIBUNAL (SUPRA). WE ACCORDINGLY DIRECT THE AO TO RESTRICT THE DISALLOWANCE U/S. 14A TO 1% OF THE TOTAL DIVIDEND INCOME. GROUND NO. 2.6 IS PARTLY A LLOWED. 4. ACCORDINGLY, THE ORDER OF THE TRIBUNAL IN ITA NO . 8222/M/2010 IS MODIFIED. M.A. NO. 377/M/2013 3 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.02.2014 3 . 2& $ 4 56 07.02.2014 2 . = SD/- SD/- (I.P. BANSAL ) (N .K. BILLAIYA) /JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 5 DATED 07.02.2014 . . ./ RJ , SR. PS 3 . +/ > &/ 3 . +/ > &/ 3 . +/ > &/ 3 . +/ > &/ / COPY OF THE ORDER FORWARDED TO : 1. '* / THE APPELLANT 2. +,'* / THE RESPONDENT. 3. ? ( ) / THE CIT(A)- 4. ? / CIT 5. @= +/ , , / DR, ITAT, MUMBAI 6. =A B / GUARD FILE. 3 3 3 3 / BY ORDER, , / +/ //TRUE COPY// C CC C / D ( D ( D ( D ( (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI