UNIVERSAL FERRO & ALLIED CHEMICALS LTD, MUMBAI v. ACIT 1(3), MUMBAI

ITA 2223/MUM/2010 | 2006-2007
Pronouncement Date: 28-12-2010 | Result: Allowed

Appeal Details

RSA Number 222319914 RSA 2010
Assessee PAN AAACU1697G
Bench Mumbai
Appeal Number ITA 2223/MUM/2010
Duration Of Justice 9 month(s) 9 day(s)
Appellant UNIVERSAL FERRO & ALLIED CHEMICALS LTD, MUMBAI
Respondent ACIT 1(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 28-12-2010
Assessment Year 2006-2007
Appeal Filed On 19-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI P M JAGTAP ACCOUNTANT MEMBER I T A NO: 2223/MUM/2010 (ASSESSMENT YEAR: 2006-07) UNIVERSAL FERRO & ALLIED CHEMICALS LTD. APPELLAN T MUMBAI (PAN: AAACU1697G) VS ASSISTANT COMMISSIONER OF INCOME TAX 1(3) RESPOND ENT MUMBAI APPELLANT BY: ADJOURNMENT APPLICATION DT.28.12.2010 RESPONDENT BY: SHRI SUMEET KUMAR O R D E R R V EASWAR PRESIDENT: THE ADJOURNMENT APPLICATION FILED BY THE ASSESSEE IS REJECTED. 2. THE APPEAL HAS BEEN FILED BY THE ASSESSEE AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. THOUGH THERE ARE FOUR GROUNDS OF APPEAL THE ONLY ISSUE IS WHETHER THE REVENUE AUTHO RITIES WERE JUSTIFIED IN DISALLOWING ` 12 54 302/- BY INVOKING SECTION 14A OF THE INCOME TAX ACT 1961 READ WITH RULE 8D OF THE INCO ME TAX RULES. A PERUSAL OF THE ASSESSMENT ORDER PASSED UNDER SECT ION 143(3) SHOWS THAT THE ASSESSEE RECEIVED DIVIDEND INCOME OF ` 246.96 LAKHS DURING THE YEAR. THE ASSESSING OFFICER INVOK ED SECTION 14A AND HELD THAT EXPENDITURE INCURRED BY THE ASSESSEE IN ORDER TO EARN THE DIVIDEND INCOME WHICH IS EXEMPT FROM INCOME TA X SHOULD BE DISALLOWED. HE INVOKED RULE 8D AND CALCULATED THE DISALLOWANCE AT ` 12 54 302/- AND THE SAME WAS ADDED BACK TO THE BUSI NESS ITA NO: 2223/MUM/2010 2 INCOME. THE DISALLOWANCE HAVING BEEN CONFIRMED BY THE CIT(A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUN AL. 3. IN THE RECENT JUDGMENT OF THE HONBLE BOMBAY H IGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX IN INCOME TAX APPEAL NO. 626 OF 2010 AND WRIT PETITION NO. 758 OF 2010 DATED 12 TH AUGUST 2010 IT HAS BEEN HELD THAT RULE 8D IS APPLICABLE ONLY FROM THE ASSESSMENT YEAR 2008-09 AND CANNOT BE INVOKED WITH RETROSPECTIVE EFFECT. I N THIS JUDGMENT THE HONBLE HIGH COURT HAS ALSO LAID DOWN CERTAIN G UIDELINES FOR THE PURPOSE OF INVOKING SECTION 14A AND WORKING OUT THE DISALLOWANCE TO BE MADE OUT OF THE EXPENDITURE INCURRED BY THE A SSESSEE. RESPECTFULLY FOLLOWING THE JUDGMENT WE SET ASIDE T HE ORDERS OF THE DEPARTMENTAL AUTHORITIES ON THIS POINT AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO H IM TO FOLLOW THE GUIDELINES LAID DOWN IN THE AFORESAID JUDGMENT AND TAKE A FRESH DECISION REGARDING THE APPLICABILITY OF SECTION 14A AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING I.E. ON 28 TH DECEMBER 2010. SD/- SD/- (P M JAGTAP) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI DATED 28 TH DECEMBER 2010 SALDANHA ITA NO: 2223/MUM/2010 3 COPY TO: 1. UNIVERSAL FERRO & ALLIED CHEMICALS LTD. LIBERTY BUILDING SIR V T MARG NEW MARINE LINES MUMBAI 400 020 2. ACIT 1(3) 3. CIT-1 4. CIT(A)-2 5. DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI