CHETAN MEHRA, MUMBAI v. ACIT 1(3), MUMBAI

ITA 1530/MUM/2010 | 2006-2007
Pronouncement Date: 14-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 153019914 RSA 2010
Assessee PAN AABPM4010H
Bench Mumbai
Appeal Number ITA 1530/MUM/2010
Duration Of Justice 10 month(s) 18 day(s)
Appellant CHETAN MEHRA, MUMBAI
Respondent ACIT 1(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 14-01-2011
Assessment Year 2006-2007
Appeal Filed On 25-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKO TAIAH (AM) ITA NO.1530/MUM/2010 ASSESSMENT YEAR : 2006-07 SHRI CHETAN MEHRA 20 MOTI MAHAL DINSHAW WACHHA ROAD CHURCHGATE MUMBAI-20. ..( APPELLANT ) P.A. NO. (AABPM 4010 H) VS. ASSTT. COMMISSIONER OF INCOME TAX -1(3) MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHR I VIJAY MEHTA RESPONDENT BY : SHRI S.K. SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 14.12.2009 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF DEALING IN SHARES/SECURITIES T RADING IN GLASSWARE ITEMS LENDING AND BORROWING OF MONEY AND CO NSULTANCY SERVICES. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY HA S RECEIVED THE EXEMPT INCOME OF RS.10 07 071/- AGAINST W HICH THE ASSESSEE HAS NOT ADDED BACK ANY AMOUNT AS EXPENDITURE ATTR IBUTABLE TO EARNING EXEMPT INCOME. ON BEING ASKED IT WAS SUBMI TTED BY THE ASSESSEE THAT THE EXEMPT INCOME HAS BEEN EARNED ONLY DURI NG THE ITA NO.1530/M/10 A.Y:06-07 2 COURSE OF BUSINESS AND NO EXPENSES ARE TO BE DISALLOWED U/S. 14A. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEE'S CONTENTION AND DISALLOWED RS.97 00 214/- U/S.14A AS PER WORKING GIVEN AT PAGE 9-10 OF THE ASSESSMENT ORDER. ON APPEAL THE LD. CIT(A) WHILE AGREEING WITH THE VIEW OF THE ASSESSING OFFICER CON FIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING SOLE GROUND OF AP PEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS .97 00 214/- UNDER SECTION 14A R.W.R.8D OF THE INCO ME TAX ACT 1961 WITH RESPECT TO EXEMPT DIVIDEND INCOM E. THE APPELLANT PRAYS THAT THE SAID DISALLOWANCE MAY PLEASE BE DELETED. 4. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT THIS ISSUE STANDS COVERED BY THE JUDGMENT OF HON'BLE JURISDICTIONA L HIGH COURT IN GODREJ & BOYCE MFG. CO. LTD. VS. DCIT THEREFORE TH E ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 5. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND ME RIT IN PLEA OF THE PARTIES THAT THE ISSUE STANDS COVERED BY THE RECENT JUDGM ENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE MFG . CO. LTD. VS. DCIT IN INCOME TAX APPEAL NO.626 OF 2010 AND WRIT P ETITION NO.758 OF 2010 DATED 12.8.2010 SINCE REPORTED IN (2010) 328 ITR 81 (BOM.) WHEREIN THEIR LORDSHIPS AFTER CONSIDERING THE DECISION O F THE TRIBUNAL IN DAGA CAPITAL MANAGEMENT PVT. LTD. (117 ITD 169 ( MUM)(SB) WHILE HOLDING THAT THE PROVISIONS OF SUB SECTIONS (2) AND (3) OF SEC.14A OF ITA NO.1530/M/10 A.Y:06-07 3 THE ACT ARE CONSTITUTIONALLY VALID HAVE HELD VIDE PLA CITUM 88(VI) APPEARING AT PAGE 138 OF THE ITR AS UNDER : (VI) EVEN PRIOR TO ASSESSMENT YEAR 2008-09 WHEN RULE 8D WAS NOT APPLICABLE THE ASSESSING OFFICER H AS TO ENFORCE THE PROVISIONS OF SUB SECTION (1) OF SECTION 14A. FOR THAT PURPOSE THE ASSESSING OFFICER IS DUTY BOUND TO DET ERMINE THE EXPENDITURE WHICH HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. THE ASSESSING OFFICER MUST ADOPT A REASONABLE BASIS OR METHOD CONSISTENT WITH ALL THE RELEVANT FACTS AND CIRCUMST ANCES AFTER FURNISHING A REASONABLE OPPORTUNITY TO THE ASSESSEE TO PLACE ALL GERMANE MATERIAL ON THE RECORD; RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEN D BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECI DE THE SAME AFRESH IN THE LIGHT OF THE DIRECTIONS OF THE HON'BLE JU RISDICTIONAL HIGH COURT IN THE ABOVE CITED CASE AFTER PROVIDING REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ACCORDINGLY THE GROUND TA KEN BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT ASSESSEE'S APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.1.2011. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 14.1.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.