LANXESS INDIA P. LTD, MUMBAI v. ADDL CIT RG 1, THANE

ITA 1864/MUM/2010 | 2005-2006
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 186419914 RSA 2010
Bench Mumbai
Appeal Number ITA 1864/MUM/2010
Duration Of Justice 10 month(s) 21 day(s)
Appellant LANXESS INDIA P. LTD, MUMBAI
Respondent ADDL CIT RG 1, THANE
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-01-2011
Assessment Year 2005-2006
Appeal Filed On 09-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT ASHA VIJAYARAGHA VAN (JM) ITA NO.1864/MUM/2010 (ASSESSMENT YEAR-2005-06) M/S. LANXESS INDIA PVT. LTD. KOLSHET ROAD THANE (W)-400 607 PAN-AACCB3880A VS. THE ADDL CIT RANGE 1 LOWER GROUND FLOOR VARDAN BLDG. MIDC WAGLE INDUSTRIAL ESTATE THANE (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI DHINESH BAFNA SHRI ALIA SQER RAMPWALA RESPONDENT BY: SHRI S.K. PAHWA O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)- II MUMBAI DATED 2.12.2009 FOR THE A.Y.2 005-06. 2. THE ASSESSEE IS A WHOLLY OWNED SUBSIDIARY OF LAN XESS DEUTSCHLAND GMBH GERMANY AND IS ENGAGED IN THE BUS INESS OF MANUFACTURING AND TRADING OF CHEMICAL AND CHEMICAL INTERMEDIARIES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.10.20 05 DECLARING A TOTAL INCOME OF RS. 130 572 530 FOR THE A.Y. 2005-06. TH E LD ACIT PASSED AN ORDER U/S. 143(3) DT. 22.12.2008 ASSESSING THE T OTAL INCOME OF THE ASSESSEE AT RS.145 956 380 AFTER MAKING CERTAIN DISALLOWANCES/ADJUSTMENTS. ITA NO.1864/M/2010 2 3. AGGRIEVED BY THE ORDER OF THE AO ASSESSEE PREFE RRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HELD AS FOLLOWS: IN VIEW OF THE CLEAR FINDINGS OF THE ITAT MUMBAI (SB) IN THE CASE OF ITO 6(2)(2) MUMBAI VS M/S. DAGA CAPITAL MANAGEME NT PVT. LTD. (SUPRA) THE ARGUMENT OF THE APPELLANT HAS NO FORCE THAT THE AMENDMENT IS PROSPECTIVE AND IS NOT THEREFORE APPLI CABLE IN ITS CASE FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 200 6-06. IN THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE THERE IS N O INFIRMITY IN THE ACTION OF THE AO APPLYING THE PROVISIONS OF SEC . 14A READ WITH RULE 8D TO THE FACTS OF THE CASE OF THE APPELLANT A ND THE ADDITION MADE AS CONSEQUENT TO ABOVE ACTION OF THE AO IS CON FIRMED. HOWEVER THE APPELLANT HAS POINTED OUT CERTAIN ARIT HMETICAL ERROR IN CALCULATING THE DISALLOWANCE UNDER RULE 8D MADE BY THE AO AND HAS REQUESTED TO CORRECT THE SAME. THE AO IS D IRECTED TO LOOKS INTO THE SUBMISSIONS OF THE APPELLANT IN THIS REGARD AND CORRECT THE ARITHMETICAL ERROR IF ANY AND DECIDED THE ISSUE ON MERIT. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) ASSESS EE PREFERRED AN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE U/S. 14A OF THE ACT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE RECENT JUDGEMENT DT. 12.8.2010 BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE LTD. VS ACIT HOLDING THAT THE PROVISIONS OF SEC. 14A ARE APPLICABLE IN SUCH CIRCUMSTANCES AND THE DI SALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME REASONABLE BASIS. UND ER SUCH CIRCUMSTANCES WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISA LLOWANCE AS PER THE AFORENOTED JUDGEMENT AFTER ALLOWING A REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.1864/M/2010 3 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 28 TH DAY OF JANUARY 2011 SD/- SD/- (R.S. SYAL) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 28 TH JANUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR A BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO.1864/M/2010 4 D ATE INITIALS 1 DRAFT DICTATED ON: 25.01. 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 25.01 .201 1 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/ PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER: ______