PRAKASH M. SHAH, MUMBAI v. ITO WD 24(3)(2), MUMBAI

ITA 3309/MUM/2009 | 2005-2006
Pronouncement Date: 05-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 330919914 RSA 2009
Bench Mumbai
Appeal Number ITA 3309/MUM/2009
Duration Of Justice 9 month(s) 17 day(s)
Appellant PRAKASH M. SHAH, MUMBAI
Respondent ITO WD 24(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 05-03-2010
Date Of Final Hearing 03-03-2010
Next Hearing Date 03-03-2010
Assessment Year 2005-2006
Appeal Filed On 19-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI R.S.SYAL ACCOUNTANT MEMBER ITA NO.3309/MUM/2009 : ASST.YEAR 2005-2006 SHRI PRAKASH M.SHAH 127/10 GEETA BHAVAN JAWAHAR NAGAR GOREGAON (WEST) MUMBAI 400 062. PA NO.AAYPS5275M. VS. THE INCOME TAX OFFICER WARD 24(3)(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH MILWANI RESPONDENT BY : SHRI S.M.KESHKAMAT O R D E R THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 12.3.2009 I N RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THE FIRST GROUND WAS NOT PRESSED BY THE LEARNED A.R. THE SAME IS THEREFORE DISMISSED. 3. THE SECOND GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF MOTOR CAR DEPRECIATION AMOUNTING TO RS.76 808 AGAINST REMUNER ATION AND INTEREST EARNED BY THE ASSESSEE FROM THE PARTNERSHIP FIRM BY INVOKING THE PROVISIONS OF SECTION 14A. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT TH E ASSESSEE A PARTNER EARNED REMUNERATION AND INTEREST FROM PARTNERSHIP FIRMS. H E CLAIMED DEPRECIATION AT THE RATE OF 10% ON THE MOTOR CAR AMOUNTING TO RS.76 80 8 AND NET BUSINESS INCOME WAS SHOWN AT RS.79 109. THE ASSESSING OFFICER HELD THAT THE ASSESSEES CLAIM OF DEPRECIATION ON MOTOR CAR AGAINST REMUNERATION AND INTEREST ON CAPITAL FROM THE PARTNERSHIP FIRM COULD NOT BE ALLOWED IN VIEW OF SE CTION 14A INSERTED VIDE FINANCE ACT 2001 WHICH PROHIBITS THE ALLOWANCE OF DEDUCTIO N OF ANY EXPENDITURE CLAIMED TO HAVE BEEN INCURRED IN RELATION INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. HE THEREFORE MADE DISALLOWANCE FOR THE SA ID SUM OF RS.76 808. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. ITA NO.3309/MUM/2009 SHRI PRAKASH M.SHAH. 2 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. AT THE VERY OUTSET THE LEARNED A.R. STATED THE HE HAS NO OBJECTION IF THE DISALLOWANCE U/S.14A IS COMPUTED AS PER THE MANDATE OF RULE 8D. THE SPECIAL BENCH OF THE TRIBUNAL IN ITO VS. DAGA CAPITAL MANAG EMENT (P.) LTD. [(2009) 117 ITD 169 (MUM.) (SB)] HAS HELD THAT SECTION 14A APPL IES TO ALL HEADS OF INCOME AND WOULD CALL FOR DISALLOWANCE NOT FORMING PART OF THE TOTAL INCOME EVEN THOUGH SUCH EXPENDITURE MAY BE ALLOWABLE UNDER ANY OTHER P ROVISIONS. IN THIS CASE THE TRIBUNAL RESTORED TO THE MATTER TO THE FILE OF A.O. FOR COMPUTING THE DISALLOWANCE U/S.14A IN THE LIGHT OF THE PRESCRIPTION OF RULE 8D . IN VIEW OF THE CONCESSION MADE BY THE LEARNED A.R. I SET ASIDE THE IMPUGNED ORDE R ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF A.O. FOR COMPUTING THE DISALL OWANCE U/S.14A AS PER THE MANDATE OF RULE 8D. 5. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 5 TH DAY OF MARCH 2010. SD/- ( R.S.SYAL ) ACCOUNTANT MEMBER MUMBAI : 5 TH MARCH 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXIV MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. ITA NO.3309/MUM/2009 SHRI PRAKASH M.SHAH. 3 TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.