Mehta Equities Limited, Mumbai Vs DCIT - 4 (2), Mumbai

This Income Tax Appellate Tribunal ruling concerns Mehta Equities Ltd. and the DCIT for the assessment year 2012-13. The appeal addresses several points, including the disallowance of expenses under section 14A, additions for un-reconciled AIR information, and a disallowance related to director bonuses. The assessee company, a stockbroker, disputes these actions taken by the Assessing Officer and upheld by the CIT(A).

THE INCOME TAX APPELLATE TRIBUNAL
“D” Bench, Mumbai
Shri Shamim Yahya (AM) & Shri Pavan Kumar Gadale (JM)

I.T.A. No. 5850/Mum/2019 (Assessment Year 2012-13)

Mehta Equities Ltd. 612, 6t h Floor Arun Chambers Near AC Market Tardeo Main Road Mumbai-400 043. PAN : AAACR4143C
(Appellant) 

Vs.

DCIT-4(2)(2)Aayakar Bhavan M.K. Road Churchgate Mumbai-400 020.
(Respondent)

Assessee by Shri Rajeev Khandelwal
Department by Shri Akhtar Ansari
Date of Hearing 14.09.2020
Date of Pronouncement 14.10.2020

O R D E R

Per Shamim Yahya (AM) :-

The appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 2.8.2019 pertains to A.Y. 2012-13.

2. The grounds of appeal read as under :-

1. The Commissioner of Income-tax (Appeals)-2, Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the action of the DeputyCommissioner of Income-tax-4(2)(2), Mumbai (hereinafter referred to asthe Assessing Officer) in disallowing a sum of Rs 2,36,733 by invoking the provisions of section 14A read with Rule 8D(2)(iii).

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in disallowing the impugned sum of Rs 2,36,733 inasmuch as the same is not in accordance with the prescription of section 14A read with Rule 8D(2)(iii).

2. The CIT(A) erred in upholding the action of the Assessing Officer in making an addition of a sum of Rs 44,589; being interest income on account of non-reconciliation of AIR.

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as the CIT(A) and the Assessing Officer have not correctly appreciated the facts of the case in its entirety and hence,the impugned addition requires to be deleted.

3. The CIT(A) erred in upholding the action of the Assessing Officer in making a disallowance of Rs 5,00,000 under section 36(l)(ii) of the Act; being bonus paid to the Directors of the Company by holding that such payments are in lieu of dividend or profits.

The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as the CIT(A) and the Assessing Officer have not correctly appreciated the facts of the case in its entirety and hence, the impugned disallowance requires to be deleted.

3. Brief facts of the case are that the assessee-company is engaged in the business of a stock/share broker, Depository participant. The appellant had filed its Return of Income on 21/09/2012 declaring total income of Rs.52,72,893/-. Assessment u/s.143(3) was completed on 16.03.2015 determining total income at Rs.91,73,980/- by making the following disallowances:-

i. Disallowance u/s 14A of Rs. 15,19,159/-.

ii. Disallowance of depreciation and motor car expenses of Rs. 18,05,062/-.

iii. AIR discrepancy Rs. 44,598/-.

iv. Disallowance of expenses incurred for LTCG

To know more in details find the attachment file