POONAWALLA INVESTMENTS & INDUSTRIES P. LTD, MUMBAI v. ITO 3(2)(1), MUMBAI

ITA 302/MUM/2009 | 2005-2006
Pronouncement Date: 30-12-2010 | Result: Allowed

Appeal Details

RSA Number 30219914 RSA 2009
Assessee PAN AAACP3265B
Bench Mumbai
Appeal Number ITA 302/MUM/2009
Duration Of Justice 1 year(s) 11 month(s) 15 day(s)
Appellant POONAWALLA INVESTMENTS & INDUSTRIES P. LTD, MUMBAI
Respondent ITO 3(2)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Date Of Final Hearing 29-12-2010
Next Hearing Date 29-12-2010
Assessment Year 2005-2006
Appeal Filed On 14-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C : MUMBAI BEFORE SHRI D.MANMOHAN VICE PRESIDENT AND SHRI B.RAMAKOTAIAH ACCOUNTANT MEMBER ITA. NO. 300/MUM/2009 ASSESSMENT YEAR 2003-2004 ITA. NO. 301/MUM/2009 ASSESSMENT YEAR 2004-2005 ITA. NO. 302/MUM/2009 ASSESSMENT YEAR 2005-2006 ITA. NO. 303/MUM/2009 ASSESSMENT YEAR 2006-2007 POONAWALLA INVESTMENTS & INDUSTRIES PVT. LTD. MUMBAI 021 PAN AAACP3265B VS. ITO 3 (2) (1) MUMBAI. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI K. GOPAL FOR RESPONDENT : SHRI P.N.DEVADASAN ORDER PER D. MANMOHAN V.P. 1. THESE FOUR APPEALS FILED AT THE INSTANCE OF TH E ASSESSEE- COMPANY PERTAIN TO THE ASSESSMENT YEARS 2003-2004 TO 2006- 2007AND THE MAIN ISSUE INVOLVED IN ALL THESE APPEAL S IS IDENTICAL. WE THEREFORE PROCEED TO DISPOSE OF THESE APPEALS BY A COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN RESPECT OF ASSESSMENT YEAR 2003-2004 THE ASS ESSING OFFICER HAS MADE AN ADDITION OF RS.3 06 470/- UNDER SECTION 14A OF THE I.T.ACT. LEARNED CIT(A) RE-WORKED OUT THE DISAL LOWANCE BY INVOKING RULE 8D OF THE I.T. RULES AT RS.8 85 082/ -. THEREFORE ASSESSEE IS IN APPEAL BEFORE US CONTENDING INATER ALIA THAT RULE 8D IS NOT APPLICABLE RETROSPECTIVELY AND HENCE LEARNE D CIT(A) WAS NOT JUSTIFIED IN APPLYING THE SAID FORMULA. 3. SIMILARLY FOR THE ASSESSMENT YEAR 2005-2006 THE ASSESSING OFFICER DISALLOWED A SUM OF RS.16 79 632/ - UNDER SECTION 14A OF THE ACT. WHEREAS THE LEARNED CIT(A) ENHANCE D THE 2 DISALLOWANCE TO RS.34 37 203/- BY APPLYING RULE 8D OF THE I.T. RULES AND THE SAME WAS CHALLENGED BEFORE US ON THE GROUND THAT NO DISALLOWANCE CAN BE MADE IN THE CIRCUMSTANCES OF TH E CASE. 4. FOR THE ASSESSMENT YEAR 2006-2007 THE ASSESSING OFFICER DISALLOWED A SUM OF RS.20 73 974/- UNDER SECTION 14 A OF THE ACT WHEREAS THE LEARNED CIT(A) ENHANCED IT TO RS.31 77 167/- BY APPLYING RULE 8D AND THUS ASSESSEE PREFERRED AN APP EAL BEFORE US. 5. IN RESPECT OF THE ASSESSMENT YEAR 2004-2005 ALS O ASSESSING OFFICER DISALLOWED A SUM OF RS.8 45 253/- WHEREAS THE LEARNED CIT(A) ENHANCED IT TO RS.24 39 912/- BY APP LYING RULE 8D AND THE SAME WAS CHALLENGED BEFORE US VIDE GROUND NOS. 1 TO 5 AND VIDE GROUND NO. 6 THE ASSESSEE CONTENDS THAT THE LEARNED CIT(A) AS WELL AS ASSESSING OFFICER WERE NOT JUSTIFIED IN DENYING DED UCTION OF RS.30 000/- REFERABLE TO THE BROKERAGE PAID WHILE ARRIVING AT ANNUAL LETTING VALUE. THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) WAS THAT THIS OUGHT TO HAVE BEEN DEDUCTED FROM THE ANNUAL LETTING VALUE UNDER SECTION 23 (1) (B) OF T HE ACT. LEARNED CIT(A) IN THIS REGARD OBSERVED THAT BROKERAGE CHARG ES ARE AN EXTRANEOUS EXPENDITURE AS FAR AS ALV IS CONCERNED AND THEREFORE IT CANNOT BE REDUCED WHILE COMPUTING ALV. 6. AT THE TIME OF HEARING LEARNED COUNSEL HAS NOT ADDRESSED THE BENCH WITH REGARD TO DEDUCTION OF BROKERAGE CHA RGES FROM THE ALV AND THEREFORE THE SAME IS NOT TAKEN-UP FOR CONSIDE RATION AND WE HEREBY REJECT GROUND NO. 6 ARISING OUT OF APPEAL FO R THE ASSESSMENT YEAR 2004-2005. REST OF THE GROUNDS FOR THE ASSESSM ENT YEAR 2004- 2005 AND ALL THE GROUNDS IN RESPECT OF OTHER ASSESS MENT YEARS PERTAIN TO THE COMPUTATION OF DISALLOWANCE UNDER SECTION 14 A OF THE I.T. ACT. 7. BOTH THE PARTIES ADMITTED THAT IN THE LIGHT OF DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. VS. DCIT AND ANOTHER (2010) 328 ITR 81 (BO M.) RULE 8D IS 3 PROSPECTIVE IN OPERATION AND IS APPLICABLE TO THE A SSESSMENT YEAR 2008-2009 AND IN RESPECT OF EARLIER PERIODS DISALLO WANCE UNDER SECTION 14A HAS TO BE RE-COMPUTED ON A REASONABLE B ASIS. THEREFORE LEARNED COUNSEL SUBMITTED THAT THE MATTER REQUIRES TO BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINA TION. IN THE LIGHT OF DECISION OF THE HONBLE BOMBAY HIGH COURT (SUPRA) WE SET ASIDE THE IMPUGNED ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO IS DIRECTED TO RECONSIDER THE SAME IN ACCORDANCE WITH LAW IN LINE WITH THE VIEW TAKEN BY THE HONBLE BOMBAY HIGH COURT (SUPRA). 8. IN THE RESULT APPEALS FILED BY THE ASSESSEE FO R THE ASSESSMENT YEARS 2003-2004 2005-2006 2006-2007 AR E TREATED AS ALLOWED FOR STATISTICAL PURPOSES WHEREAS APPEAL FOR THE ASSESSMENT YEAR 2004-2005 IS TREATED AS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF DECEMBER 2010 SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 30 TH DECEMBER 2010 VBP/- COPY TO 1. POONAWALLA INVESTMENTS & INDUSTRIES PVT. LTD. 5 08 DALMAL TOWERS NARIMAN POINT MUMBAI-400 021. MUMBAI 021 PAN AAACP3265B 2. ITO 3 (2) (1) MUMBAI. 3. CIT(A)-III MUMBAI 4. CIT-3 MUMBAI 5. DR C BENCH 6. GUARD FILE TRUE COPY BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES MUMBAI.