Dy Commissioner Of Income Tax 1 1 1 Mumbai v. M S Gcil Finance Ltd Mumbai

In The Inc Ome Tax Appellate Tribunal L Bench Mumbai Before Shri Shamim Yahya Am Shri Sandeep Gosain Jm I T A No 3092 Mum 2016 Assessment Year 2012 13 D Cit 1 1 2 579 Aayakarbhavan M K Road Mumbai Vs M S Gcil Finance Ltd 209 210 Arcadia Bldg 2 Nd Floor 195 Nariman Point Mumbai 4000 21 Pan Gir No A Adcg 0600 Q Appellant Respondent Appellant By Shri M V Rajguru Respondentby None Date Of Hearing 2 5 10 201 7 Date Of Pronouncement 07 12 2017 O R D E R Per Sandeep Gosain J Udicial Member The P Resent Appe Al Filed By The Revenue Is Against The Order Of Commissioner Of Income Tax Appeals 2 Mumbai Dated 28 01 16 For Ay 20 12 13 On The Ground Mentioned Herein Below 2 I T A No 3092 Mum 201 6 M S Gcil Finance Ltd Whether On Facts And In The Circumstances Of The Case And In Law The Ld Cit A Erred In Restricting The Disallowance To Rs 4 59 998 As Against Rs 1 54 62223 Made By The Ao Without Appreciating The Fact That Section 14 A R W Rule 8 D Is Squarely Appl Icable In This Case And Disallowance Has To Be Made As Per The Formula Given In Rule Sd The Appellant Craves Leave To Add To Amend Or Withdraw The Aforesaid Ground Of Appeal 2 At The Very Outset It Is Noticed That None Has Appeared On Behalf Of Assesse E In Spite Of Several Calls And Even No Application For Adjournment Was Moved On The Other Hand L D Dr Is Present In The Court And Is Ready With Arguments Therefore We Have Decided To Proceed With The Hearing Of The Case Ex Pa Rte With The Assistance Of T He L D Dr And The Material Placed On Record 3 As Per The Facts Of The Present Case The Assessee Is Engaged As Non Bankin G Finance Company The Assessee Has E Filed Its Revised Return Of Income On 02 09 2013 Declaring A Total Income Of Rs 2 58 70 110 The Assessment Was Completed U S 143 3 Of The I T Act 1961 On 13 02 2015 And The Total Income Was 3 I T A No 3092 Mum 201 6 M S Gcil Finance Ltd Determined At Rs 4 08 72 330 Thereby Making Disallowance U S 14 A At Rs 1 50 02 225 4 Aggrieved By The Order Of Ao Assessee Preferred Appeal Befo Re Ld Cit A And Ld Cit A After Considering The Case Of Both The Parties Partly Allowed The Appeal Of The Assessee And Deleted The Addition Of Rs 1 50 00 25 Made By Ao U S 14 A R W R 8 D Now Before Us The Revenue Has Preferred The Appeal By Raising The Above Grounds 5 The Sole Ground Raised By The Revenue Is Against Challenging The Order Of Ld Cit A In Restricting The Disallowance Of Rs 4 59 998 As Against Rs 1 54 62 223 Made By The A O U S 14 A R W R 8 D Of I T Act 6 We Have Heard Ld Dr At Length And We Have Also Perused The Material Placed On Record As Well As The Orders Passed By Revenue Authorities We Find That Although The Assessee Has Taken Specific Plea Before The Ld Cit A That The Assessee Is Engaged In Non Banking Finance Compa Ny And Is Into Business Of Trading In Securities Shares Debentures Properties Mutual Funds And Growth Related Scheme For The Purpose Of Earning Inter Est Income 4 I T A No 3092 Mum 201 6 M S Gcil Finance Ltd It Was Also Submitted By The Assessee Before The Ld Cit A That The Intention Of Making In Vestment In Equity Shares Is Not For Getting Tax Free Dividend However The Ao While Relying Upon The Judgment Of Honble Bombay High Court In The Case Of M S Godrej Boyce Mfg Co Ltd Had Made The Disa Llowance U S 14 A R W R 8 D By Considering The Fact That The Assessee Had Earned Total Dividend Of Rs 83 47 575 Although The Ld Cit A Has Reproduced The Contentions Or The Specific Stand Taken By The Assessee In His Order But While Relying Upon The Judgment Of Cit Vrs R Eliance Utilities And Power Ltd Deleted The Disallowance Made By The Ao By Holding That The Assessee Possessed Interest Free Funds Of Its Own Generated In The Course Of Relevant Financial Year Be That As It May The Ao Has Not Looked Into Or Verify The Factual Position In The Present Case As To Whether The Assessee Was Enga Ged Into Share Business Or Not As This Stand Of The Assessee Was Not Before The Ao Honble Apex Court In The Case Of Kapurchand Shrimal Vrs Cit 1981 131 Itr Page 451 Has Held That T He Duty Of The Tribunal Does Not End With Making A Declaration That The 5 I T A No 3092 Mum 201 6 M S Gcil Finance Ltd Assessments Are Illegal And It Is Dutybound To Issue Further Directions The Appellate Authority Has The Jurisdiction As Well As The Dut Y To Correct All Errors In The Proceedings Under Appeal And To Issue If Necessary Appropriate Directions To The Authority Against Whose Decision The Appeal Is Preferred To Dispose Of Thewhole Or Any Part Of The Matter Afresh Unless Forbidden Fr Om Doing So By The Statute And T He Statute Does Not Say That Such Direction Cannot Be Issued By The Appellate Authority In A Case Of This Nature Therefore C Onsidering The Above Judgment And Keeping In View The Interest Of Justice We Set Aside The Orde R Of Ld Cit A And Remit The Matter Back To The File Of Ao With A Direction To Verify The Factual Position As To Whether The Assessee Was Engaged Into Share Business Or Not And Thereafter Pass Afresh Order Of Assessment It Is Needless Here To Mention Tha T Before Passing The Order Of Assessment The Ao Shall Provide Sufficient Opportunity Of Hearing To The Assesse Before Parting We May Make It Clear That Our Decision To Restore The Matter Back To The File Of Ao Shall In No Way Be Construed As Having Any Reflection Or Expression On The Merits Of 6 I T A No 3092 Mum 201 6 M S Gcil Finance Ltd The Dispute Which Shall Be Adjudicated By The Ao Independently In Acco Rdance With Law With These Directions This Ground Of Appeal Filed By The Assessee Is Allowed For Statistical Purposes 7 In The Net Result The Appeal Filed By The Revenue Stands Allowed For Statistical Purposes Order Pronounced In The Open Court On 7 Th Dec 2017 Sd Sd Shamimyahya Sandeep Gosain Accountant Member Judicial Member Mumbai Dated 07 12 201 7 Sr Ps Dhananjay Copy Of The Order Forwarded To 1 The Appellant 2 The Respondent 3 The Cit A 4 Cit Concerned 5 Dr Itat Mumbai 6 Guard F I Le By Order Dy Asstt Registrar Itat Mumbai