OVIRA LOGISITICS LTD, V. DCIT RG 8(1),

MA 430/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1678 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D V LAKHANI
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI H.L.KARWA , PRESIDENT & SHRI R.C.SHARMA, AM M A NO. 430 / MUM/20 1 3 (ARISING OUT OF ITA NO . 3230 /MUM/20 12 ) ( ASSESSMENT YEAR : 200 8 - 20 0 9 ) OVIRA LOGISTICS LTD.(NOW MERGED WITH IL&FS MARITIME INFRASTRUCTURE COMPANY LTD.), PLOT NO. 14, RAHEJA VIHAR, IL&FS HOUSE, CHANDIVALI, ANDHERI(E), MUMBAI - 400 072 VS. DCIT, RANGE - 8(1) (OSD) MUMBAI. PAN NO. : A A A CO 1882 F APP LICANT .. RESPONDENT ASSESSEE BY : SHRI D.V.LAKHANI REVENUE BY : SHRI SANJEEV JAIN DATE OF HEARING : 21 ST MARCH , 201 4 DATE OF PRONOUNCEMENT : 21 ST MARCH , 201 4 O R D E R PER H.L.KARWA,PRESIDENT : THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE UNDER SECTION 254(2) OF THE I.T. ACT TO RECT IFY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL DATED 30 - 8 - 2013 . 2 . IT WAS CONTENDED BY THE LEARNED AR THAT DISALLOWANCE OF INTEREST WAS MADE BY THE AO UNDER SECTION 36(1)(III) OF THE ACT AMOUNTING TO RS. 4,92,87,061/ - . THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D WAS MADE TO THE TUNE OF RS. 2,92,437/ - . THE ASSESSEE CHALLENGED THE DISALLOWANCE MADE BY THE AO UNDER SECTION 36(1)(III) BEFORE THE CIT(A). HOWEVER, NO GROUND WAS RAISED BEFORE THE CIT(A) WITH REGARD TO THE DISALLOWANCE MADE UNDER SECTION 14A . THE CIT(A) HAS ALLOWED ASSESSEES CLAIM FOR DEDUCTION OF INTEREST UNDER SECTION 36(1)(III) OF THE ACT. AGAINST THIS ORDER OF CIT(A), THE REVENUE HAS FILED THE APPEAL MA NO. 430 /20 1 3 2 BEFORE THE TRIBUNAL, WHEREIN ONLY GROUND WAS TAKEN WITH RESPECT TO ALLOW ING DEDUCTIO N OF INTEREST OF RS.4,92,87,061 / - AND RS. 62,64,810/ - IN RESPECT OF OTHER EXPENSES. WHILE DECIDING THE APPEAL FILED BY THE REVENUE, THE TRIBUNAL VIDE ORDER DATED 30 - 8 - 2013 HELD THAT DISALLOWANCE MADE BY THE AO WAS NOT JUSTIFIED AND UPHELD THE DECISION OF TH E CIT(A). HOWEVER, THE TRIBUNAL ALSO OBSERVED IN PARA 2.5 THAT, ASSESSEE HAS MADE SUBSTANTIAL INVESTMENT IN SHARES, INCOME FROM WHICH IS EXEMPT. THEREFORE, DISALLOWANCE UNDER SECTION 14A IS UPHELD, SUBJECT TO THE ABOVE ORDER OF CIT(A) ON THIS ISSUE IS CON FIRMED . AS PER THE LEARNED AR, THE ISSUE WITH REGARD TO ANY DISALLOWANCE UNDER SECTION 14A WAS NEITHER BEFORE THE CIT(A) NOR BEFORE THE TRIBUNAL, THEREFORE, THE OBSERVATION MADE BY THE TRIBUNAL AT PARA 2.5 IS A MISTAKE APPARENT FROM RECORD, WHICH SHOULD BE RECTIFIED AND EXPUNGED. 3 . ON THE OTHER HAND, LEARNED DR CONTENDED THAT THE AO HAS WORKED OUT DISALLOWANCE UNDER SECTION 14A AT RS. 1,48,32,122/ - , BUT KEEPING INTO VIEW THE DISALLOWANCE OF INTEREST ALREADY MADE U/S.36(1)(III) , THE AO HAS RESTRICTED TH E DISALLOWANCE UNDER SECTION 14A TO THE TUNE OF RS. 2,92,437/ - IN RESPECT OF OTHER EXPENDITURE. 4 . WE HAVE CONSIDERED RIVAL CONTENTIONS, GONE THROUGH THE MISCELLANEOUS APPLICATION AS WELL AS ORDER OF THE TRIBUNAL AND ORDERS OF THE LOWER AUTHORITIES ON THI S ISSUE. WE FOUND THAT IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) NO DISALLOWANCE WAS MADE BY THE AO U/S.14A READ WITH RULE 8D WITH RESPECT TO THE INTEREST EXPENDITURE. AS MA NO. 430 /20 1 3 3 NO DISALLOWANCE WAS MADE BY THE AO UNDER SECTION 14A ON ACCOUNT OF DISALLOWANCE O F INTEREST, NO GROUND WAS RAISED BY THE ASSESSEE BEFORE THE CIT(A) NOR THE CIT(A) HAS DECIDED THIS ISSUE. EVEN BEFORE THE TRIBUNAL, NO GROUND WAS RAISED BY THE REVENUE WITH REGARD TO THE DISALLOWANCE MADE UNDER SECTION 14A. IN VIEW OF THESE FACTS, THE OBSE RVATION MADE BY THE TRIBUNAL IN PARA 2.5 AS QUOTED ABOVE, AMOUNTS TO MISTAKE APPARENT FROM RECORD. ACCORDINGLY, WE EXPUNGE THE SAME. 5 . IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN THE TERMS INDICATED HEREINABOVE. ORDE R PRONOUNCED IN THE OPEN COURT ON THIS 21 ST MARCH . 201 4 . SD/ - ( R.C.SHARMA ) SD/ - ( H.L.KARWA ) ACCOUNTANT MEMBER PRESIDENT MUMBAI ; DATED 21 / 0 3 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//