M/S. Smifs Securities Ltd., Kolkata v. DCIT, CIRCLE 10, KOLKATA, Kolkata

CO 59/KOL/2009 | 2002-2003
Pronouncement Date: 08-03-2011 | Result: Dismissed

Appeal Details

RSA Number 5923523 RSA 2009
Assessee PAN AADCS7513E
Bench Kolkata
Appeal Number CO 59/KOL/2009
Duration Of Justice 1 year(s) 6 month(s) 18 day(s)
Appellant M/S. Smifs Securities Ltd., Kolkata
Respondent DCIT, CIRCLE 10, KOLKATA, Kolkata
Appeal Type Cross Objection
Pronouncement Date 08-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 08-03-2011
Date Of Final Hearing 08-03-2011
Next Hearing Date 08-03-2011
Assessment Year 2002-2003
Appeal Filed On 21-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA ( ) . . . . ) [BEFORE HONBLE SRI B.R.MITTAL JM & HONBLE SRI B. K. HALDAR AM] / I.T.A NO. 1231/KOL/2009 !' !' !' !' #$ #$ #$ #$ / ASSESSMENT YEAR : 2002-03 DEPUTY COMMISSIONER OF INCOME TAX -VS.- M/S. SMIFS SECURITIES LTD. CIRCLE-10 KOLKATA (PRESENTLY STEWART & M ACKERTICH WEALTH MANAGEMENT LTD.) KOLKATA (PAN : AADCS 7513 E) ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) & C.O. NO. 59/KOL./2009 (ARISING OUT OF ITA NO. 1231/KOL./2009) ASSESSMENT YEAR : 2002-2003 M/S. SMIFS SECURITIES LTD. KOLKATA -VS.- DE PUTY COMMISSIONER OF INCOME TAX CIRCLE-10 KOLKATA (CROSS OBJECTOR) (RESPONDENT) FOR THE ASSESSEE : ) )) ) / SHRI RAJEEVA KUMAR A.R. FOR THE DEPARTMENT : ) )) ) / SHRI S.K. MALAKAR SR. D.R. * * * * / ORDER PER SHRI B. R. MITTAL JUDICIAL MEMBER/ . . :- THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSES SMENT YEAR 2002-03 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XII KO LKATA DATED 27.04.2009 ON THE FOLLOWING GROUNDS :- ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE LD. CIT(A.) ERRED IN DIRECTING THE AO TO FOLLOW THE METHOD AS PROVIDED I N RULE 8D(2)(III) ONLY FOR DETERMINING THE DISALLOWANCE PERTAINING TO EXEMPT DIVIDEND ITA NO.1231/KOL./2009 & CO-59-KOL.2009 2 INCOME BY IGNORING THE DISALLOWANCE TO BE MADE UNDE R RULE 8D(2)(I) AND 8D(2)(II) WHICH ARE APPLICABLE IN THE INSTANT C ASE. 2. THE ASSESSEE HAS FILED THE CROSS OBJECTION SUPPO RTING THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS). 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE OBSERVE THAT THE ASSESSING OFFICER WHILE MAKI NG DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT MADE DISALLOWANCE OF RS.27 53 89 3/- AS THE DIVIDEND INCOME SHOWN BY THE ASSESSEE IS EXEMPTED INCOME. SINCE THE ASSESEE FILE D APPEAL BEFORE THE LD. CIT(A.) THE LD. CIT(A.) BY FOLLOWING THE DECISION OF THE ITAT SPEC IAL BENCH MUMBAI IN THE CASE OF I.T.O. VS.- DAGA CAPITAL MANAGEMENT PVT. LTD. [117 ITD 169 (SB)] DIRECTED THE ASSESSING OFFICER TO MAKE DISALLOWANCE AS PER RULE 8D OF THE INCOME TAX RULES. HENCE THE DEPARTMENT HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING IT WAS POINTED OUT THAT THE SAID DECISION OF THE ITAT SPECIAL BENCH MUMBAI IN THE CASE OF DAGA CAPITAL MANAGEMEN T PVT. LTD. HAS SINCE BEEN REVERSED BY THE HONBLE BOMBAY HIGH COURT IN GODREJ & BOYCE MAN UFACTURING CO. LTD. VS.- DCIT [328 ITR 81] VIDE WHICH IT HAS BEEN HELD THAT RULE 8D IS PROSPECTIVE IN NATURE AND IS APPLICABLE FROM ASSESSMENT YEAR 2008-09. SINCE THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2002-03 IT IS CLEAR FROM THE ABOVE DECISION OF THE HONBLE BOMBAY HIGH COURT THAT RULE 8D IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE BEFORE US. H ENCE WE SET ASIDE THE ORDER OF THE LD. CIT(A.) VIDE WHICH THE LD. CIT(A.) HAD DIRECTED THE ASSESSI NG OFFICER TO APPLY THE METHOD AS PROVIDED IN RULE 8D FOR DETERMINING THE DISALLOWANCE PERTAIN S TO EXEMPT DIVIDEND INCOME AS THE SAID RULE 8D IS NOT APPLICABLE TO THE ASSESSMENT YEAR UN DER CONSIDERATION. HOWEVER WE RESTORE THIS ISSUE TO THE FILE OF THE CIT(A.) TO ADJUDICATE THE GROUND AFRESH AS PER LAW AFTER GIVING DUE OPPORTUNITY TO THE PARTIES. ACCORDINGLY THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSES BY RESTORING THE I SSUE TO THE FILE OF THE CIT(A.) FOR HIS FRESH ADJUDICATION. ITA NO.1231/KOL./2009 & CO-59-KOL.2009 3 6. IN VIEW OF THE ABOVE THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 7. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS A LLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS INF RUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 08.03.2011. SD/- SD/- [B.K. HALDAR / ( . . ) ] [ B.R. MITTAL / . . ] ACCOUNTANT MEMBER/ JUDICIAL MEMBER/ DATED : 08 / 03 / 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. SMIFS SECURITIES LTD. (PRESENTLY STEWART & MAC KERTICH WEALTH MANAGEMENT LTD. VAIBHAV 5 TH FLOOR 4 LEE ROAD KOLKATA-20. 2 DCIT CIRCLE-10 KOLKATA 3 GOVT. PLACE (WEST) KO LKATA-700 001. 3. CIT(A)- KOLKATA 4. CIT KOLKATA- 5. DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T. KOLKATA LAHA SR. P.S.