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As per sec 14A Rule 8D is applicable with effect from A.Y 2008-09

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Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Facts of the case are that the assessee filed its return qua the assessment year on14.11.2006 declaring total income of Rs. 25,88,000/-. Also claimed dividend of Rs. 3,03,110/- as exempt from tax u/s 10(34) of the Act. However, the Assessing Officer vide assessment order dated 19.11.2008 relied on the case of M/s. Daga Management Pvt. Ltd.(SB), ITAT Mumbai. Accordingly, applied provision of sec. 14A qua the dividend earned from dealing in shares and securities held as stocking trade. Hence, computed total disallowance of Rs.5,23,916/

Citation :
Available Finance Ltd., C/o. Sanjay Amritlal & Co, 321, B Wing, Vardhaman Chambers, Sec-17, Vashi, Navi Mumbai – 400 703. PAN: AAACF1246Q (Appellant) Vs. ACIT (Appeals)-8(1), Aayakar Bhavan, Mumbai – 400 020. (Respondent)

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCHES “A”, MUMBAI

BEFORE SHRI R.S. SYAL (AM) AND SHRI S.S. GODARA (JM)

ITA No.6661/M/2010 (AY: 2006-07)

ITA No.6662/M/2010 (AY: 2007-08)

Available Finance Ltd.,

C/o. Sanjay Amritlal & Co,

321, B Wing, Vardhaman

Chambers, Sec-17, Vashi,

Navi Mumbai – 400 703.

PAN: AAACF1246Q

(Appellant)

Vs.

ACIT (Appeals)-8(1),

Aayakar Bhavan,

Mumbai – 400 020.

 (Respondent)

Appellant by: Shri Sanjay Chowdary

Respondent by: Shri V.V. Shastri

Date of hearing: 24.4.2012

Date of pronouncement: 2.5.2012

O R D E R

PER S.S. GODARA, J.M:

ITA No.6661/M/2010 (AY: 2006-07)

The assessee has filed the instant appeals against the order of Ld. CIT (A)-16, Mumbai dated 2.7.2010.

2. In the instant appeal, there are five grounds in total. Ground no.5 is general in nature. Ground nos. 1 to 4 challenge the confirmation of disallowance made by the Ld. CIT (A) qua the total income u/s 14A of the Income Tax Act, 1961 r.w. Rule 8D of the Income Tax Rules.

3. Facts of the case are that the assessee filed its return qua the assessment year on14.11.2006 declaring total income of Rs. 25,88,000/-. Also claimed dividend of Rs. 3,03,110/- as exempt from tax u/s 10(34) of the Act. However, the Assessing Officer vide assessment order dated 19.11.2008 relied on the case of M/s. Daga Management Pvt. Ltd.(SB), ITAT Mumbai. Accordingly, applied provision of sec. 14A qua the dividend earned from dealing in shares and securities held as stocking trade. Hence, computed total disallowance of Rs.5,23,916/-.

4. In appeal, the Ld. CIT (A) has confirmed the findings of the Assessing Officer. Hence these appeals.

5. In support of the grounds, the learned AR during the course of hearing has referred to the impugned findings as well as the decision of Hon’ble Jurisdictional High Court reported as 234 CTR 1 in the case of Godrej Boyce. He submitted that the authorities below have wrongly applied the Rule 8D in computing the expenditure in question. Hence, he prayed the matter be restored to the Assessing Officer for deciding the issue afresh.

6. On the other hand, the learned DR appearing for the revenue has not controverted the contentions of the learned AR.

7. After hearing both the learned representatives, we are of the opinion that issue in hand is no more res integra. The Hon’ble Juarisdictional High Court in the case of Godrej Boyce (supra) has held that Rule 8D r.w.s. 14A has to be applied w.e.f., AY 2008-09, whereas AY under consideration is 2006-07. Therefore, relying on the same very principle, as envisaged by the Hon’ble High Court in the case of Godrej Boyce, we remit the grounds back to the Assessing Officer who shall redecide the issue by following the principles of reasonable computation after affording adequate opportunity of hearing to the assessee.

8. In the result, the appeal filed by the assessee stands allowed for statistical purposes.

ITA No.6662/M/2010 (AY: 2007-08)

9. Since we have already held hereinabove that sec. 14A r.w. Rule 8D are applicable w.e.f. AY 2008-09. The AY in hand is 2007-08, therefore, applying the same analogy, we allow this appeal for statistical purposes.

10. In the result, both appeals allowed for statistical purposes.

Order pronounced in the open court on 2nd May, 2012.

                                                         Sd/-                                   Sd/-

                                                   (R.S. SYAL)                 (S.S. GODARA)

                                      ACCOUNTANT MEMBER   JUDICIAL MEMBER

Date: 2.5.2012

At: Mumbai

Okk

Copy to:

1. The Appellant

2. The Respondent

3. The CIT (A), Mumbai concerned

4. The CIT, Mumbai concerned

5. The DR “A” Bench, ITAT, Mumbai

// True Copy//

By Order

Assistant Registrar

ITAT, Mumbai Benches, Mumbai.

 

CS Bijoy
on 16 May 2012
Published in Income Tax
Views : 2129
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