ALCHEMIC LEASING & FINANCING PRIVATE LIMITED, MUMBAI v. ITO010(3)(1), MUMBAI

ITA 3072/MUM/2010 | 2007-2008
Pronouncement Date: 17-03-2011 | Result: Allowed

Appeal Details

RSA Number 307219914 RSA 2010
Bench Mumbai
Appeal Number ITA 3072/MUM/2010
Duration Of Justice 10 month(s) 28 day(s)
Appellant ALCHEMIC LEASING & FINANCING PRIVATE LIMITED, MUMBAI
Respondent ITO010(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 17-03-2011
Assessment Year 2007-2008
Appeal Filed On 19-04-2010
Judgment Text
I.T.A NO.3072/ MUM/2010 ALCHEMIC LEASING & FINANCING P. LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI. BEFORE SHRI R.V.EASWAR PRESIDENT AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER I.T.A NO.3072/ MUM/2010 ASSESSMENT YEAR: 2007-08 ALCHEMIC LEASING & FINANCING P. LTD. .. APPELL ANT 2 ND FLOOR UDYOG KSHETRA GOREGAON LINK ROAD MULUND (W). MUMBAI-80 PA NO.AAACA 4248 F VS INCOME TAX OFFICER 10(3)(1) . RESPONDENT AAYAKAR BHAVAN M.K. ROAD MUMBAI. APPEARANCES: DEEPESH CHHEDA FOR THE APPELLANT A.K.NAYAK FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 10 TH FEBRUARY 2009 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2007 -08. 2. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICA TE IN THIS APPEAL IS WHETHER OR NOT THE CIT (A) WAS JUSTIFIED IN UPHOLDING THE DISALLOW ANCE OF RS.13 01 944 U/S.14A BY APPLYING RULE 8D. 3. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE A SSESSEE HAS SHOWN DIVIDEND INCOME AMOUNTING TO RS.71 31 831 AND CLAIMED THE SAME AS E XEMPT U/S.10(34). THE ASSESSING OFFICER ALSO NOTED THAT ALTHOUGH THE ASSESSEE HAS C LAIMED INCOME FROM DIVIDEND EXEMPT BUT HAS NOT MADE PROPORTIONATE DISALLOWANCE FOR EXPENDI TURE INCURRED TO EARN EXEMPT INCOME. IN THIS BACKDROP THE ASSESSING OFFICER APPLIED RUL E 8D AND COMPUTED THE DISALLOWANCE OF RS.13 01 944 U/S.14A R.W. RULE 8D AND ADDED THE SAM E TO THE RETURNED INCOME OF THE I.T.A NO.3072/ MUM/2010 ALCHEMIC LEASING & FINANCING P. LTD 2 ASSESSEE. AGGRIEVED THE ASSESSEE CARRIED THE MATT ER IN APPEAL BEFORE THE CIT (A) WHO FOLLOWING THE DECISION OF THE ITAT MUMBAI IN THE CA SE OF DAGA CAPITAL AND MANAGEMENT(119 TTJ 289) WHEREIN IT WAS HELD THAT RULE 8D IS RETR OSPECTIVE APPROVED THE ACTION OF THE AO DISALLOWING A SUM OF RS. 13 01 944. THE ASSESSEE I S NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO T HE APPLICABLE LEGAL POSITION. 5. LEARNED REPRESENTATIVES AGREE THAT SO FAR AS THE QUESTION OF RULE 8D IS CONCERNED THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESEE B Y THE HONBLE JURISDICTIONAL HIGH COURTS JUDGEMENT IN THE CASE OF GODREJ & BOYCE MFG CO LTD VS DCIT (328 ITR 81) WHEREIN IT HAS BEEN HELD THAT RULE 8D OF THE INCOME TAX RULES 19 62 IS APPLICABLE ONLY PROSPECTIVELY I.E. FROM A.Y. 2008-09. THE ASSESSMENT YEAR INVOLVED IN THE PRESENT CASE IS 2007-08. THE HONBLE HIGH COURT HAS HELD THAT A REASONABLE DISALLOWANCE FOR EXPENSES INCURRED IN EARNING DIVIDEND INCOME IS NEVERTHELESS TO BE COMPUTED BY T HE AO. IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GO DREJ BOYCE MFG CO. LTD (SUPRA) AND AS AGREED TO BY THE PARTIES WE REMIT THE ISSUE TO THE FILE OF THE AO TO RE-COMPUTE THE DISALLOWANCE U/S.14A IN THE LIGHT OF THE LAW LAID D OWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MFG CO. LTD (SUPR A). 6. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 17 TH MARCH 2011 SD/- (R.V.EASWAR) PRESIDENT SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI DATED 17 TH MARCH 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS) 22 MUMBAI 4. COMMISSIONER OF INCOME TAX 10 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH G MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI