JANAK BHUPATRAI DOSHI, MUMBAI v. ASST CIT CIR NO 13(2), MUMBAI

ITA 2109/MUM/2012 | 2008-2009
Pronouncement Date: 07-10-2013 | Result: Allowed

Appeal Details

RSA Number 210919914 RSA 2012
Assessee PAN AAAPD7409A
Bench Mumbai
Appeal Number ITA 2109/MUM/2012
Duration Of Justice 1 year(s) 6 month(s) 7 day(s)
Appellant JANAK BHUPATRAI DOSHI, MUMBAI
Respondent ASST CIT CIR NO 13(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 07-10-2013
Date Of Final Hearing 07-10-2013
Next Hearing Date 07-10-2013
Assessment Year 2008-2009
Appeal Filed On 30-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI BEFORE SHRI VIJAY PAL RAO JUDICIAL MEMBER & SHRI N K BILLAIYA ACCOUNTANT MEMBER ITA NO.2109/MUM/2012 FOR ASST. YEAR: 2008-09 SHRI JANAK BHUPATRAI DOSHI 212/216 SAMUEL STREET RANG MAHAL MUMBAI- 400 003 PAN : AAAPD7409A THE ACIT CIR 1 3 (2) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BHUPENDRA SHAH RESPONDENT BY : SHRI R K SAHU DATE OF HEARING : 07.10.2013 DATE OF PRONOUNCEMENT :07.10.2013 O R D E R PER N.K.BILLAIYA (AM) : WITH THIS APPEAL THE ASSESSEE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE CIT(A) -24 MUMBAI DATED 28.02.12 FOR A.Y. 200 8-09. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE C IT(A) ERRED IN APPLYING THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D WHILE CONFIRMING THE ADDITION OF RS.5 64 486/-. DURING THE COURSE OF SCRUTINY AS SESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS TO TAL INVESTMENT IN SHARES AND SECURITIES AT RS.48 50 000/-. THE ASSESSING OFFICE R WAS OF THE FIRM BELIEF THAT DISALLOWANCE U/S. 14A IS PERTINENT ON ACCOUNT OF IN TEREST AND OTHER EXPENDITURE. THE ASSESSING OFFICER WENT ON TO COMPUTE THE DISALLOWAN CE U/S. 14A OF THE ACT READ WITH RULE 8D. THE DISALLOWANCE WAS COMPUTED AT RS.5 64 486/-. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BUT W ITHOUT ANY SUCCESS. BEFORE THE CIT(A) THE ASSESSEE PLEADED THAT THE DISALLOWANCE S HOULD BE RESTRICTED TO THE INCOME EARNED. IT WAS FURTHER STATED THAT INVESTMENTS FR OM WHICH EXEMPT INCOME WAS 2 ITA NO.2109/MUM/12 AY:2008-09 EARNED WAS MADE BY THE ASSESSEE IN HIS PERSONAL CAP ACITY OUT OF HIS OWN CAPITAL AND NOT OUT OF ANY LOANS TAKEN BY THE PROPRIETARY CONCE RN. THE CIT(A) DISMISSED THE SUBMISSIONS MADE BY THE ASSESSEE HOLDING THAT THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER ARE IN CONSONANCE WITH RULE 8D. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. 3. THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS EARNED EXEMPT INCOME TO THE TUNE OF RS.10 973 ONLY WHICH INCLUDE D ACCRUED INTEREST ON PPF DEPOSIT AT RS.8 500/- AND DIVIDEND FROM SHARES AT RS.2 473/ -. IT IS THE SAY OF THE COUNSEL THAT THE AFOREMENTIONED EXEMPT INCOME HAVE BEEN EAR NED ON THE INVESTMENTS MADE BY THE ASSESSEE IN HIS PERSONAL CAPACITY OUT OF HI S OWN CREDIT CAPITAL AND THE REVENUE AUTHORITIES HAVE GROSSLY ERRED IN COMPARING INTEREST PAYMENTS INVESTMENTS AND TOTAL ASSETS OF THE PROPRIETARY CONCERN OF THE ASSESSEE. THE COUNSEL FURTHER STATED THAT THE SUBMISSIONS OF THE ASSESSEE HAVE NO T BEEN CONSIDERED AT ALL. PER CONTRA THE DR STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE RELEVANT MATERIAL EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER-BOOK. IN THE STATEMENT OF TOTAL INCOME THE ASSESSEE HAS SHOWN INCOME CLAIMED TO BE EXEMPT FROM TAX AT RS.10 973 WHICH INCLUDES PPF INTEREST OF RS.8 500/ - AND DIVIDEND FROM INDIA COMPANY RS.2 473/-. A PERUSAL OF THE ASSESSMENT OR DER SHOWS THAT THE ASSESSING OFFICER HAS COMPUTED THE DISALLOWANCE BASED ON THE INVESTMENT SHOWN BY THE ASSESSEE IN ITS BALANCE-SHEET WHEREAS THE CLAIM OF THE ASSESSEE IS THAT HE HAS EARNED EXEMPT INCOME IN HIS PERSONAL CAPACITY AND T HE EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT RELATES TO THE PROPRIETARY CONCERN OF THE ASSESSEE. IN OUR CONSIDERATE VIEW THESE FACTS HAVE NOT BEEN LOOKED INTO BY THE ASSESSING OFFICER. THEREFORE IN THE INTEREST OF JUSTICE WE RESTORE T HIS ISSUE BACK TO THE FILES OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECT ED TO VERIFY THE CLAIM OF THE ASSESSEE THAT THE EXPENSES CHARGED TO THE PROFIT & LOSS ACCOUNT HAVE NOTHING TO DO WITH HIS INDIVIDUAL INCOME EARNED OUT OF HIS OWN CA PITAL FUND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS DIRECT ED TO FURNISH ALL THE NECESSARY DETAILS TO SUBSTANTIATE HIS CLAIM. 3 ITA NO.2109/MUM/12 AY:2008-09 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER 2013. SD/- SD/- (VIJAY PAL RAO) (N.K.BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEM BER MUMBAI DT : 7 TH OCTOBER 2013 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T MUMBAI 4. THE CIT (A)-24 MUMBAI 5. THE DR J- BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI