GOGRI AND SONS INVESTMENT P. LTD, MUMBAI v. ACIT 10(3), MUMBAI

ITA 337/MUM/2010 | 2006-2007
Pronouncement Date: 28-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 33719914 RSA 2010
Assessee PAN AABCG4114H
Bench Mumbai
Appeal Number ITA 337/MUM/2010
Duration Of Justice 1 year(s) 6 month(s) 15 day(s)
Appellant GOGRI AND SONS INVESTMENT P. LTD, MUMBAI
Respondent ACIT 10(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 28-07-2011
Assessment Year 2006-2007
Appeal Filed On 13-01-2010
Judgment Text
1 ITA 337 /M/2010 GOGRI AND SONS INVESTMENT P. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A BEFORE SHRI D.K. AGARWAL J.M. AND SHRI R.K. PANDA A.M. ITA NO. 337/MUM/2010 ASSESSMENT YEAR 2006-07 GOGRI AND SONS INVESTMENT PVT. LTD. 6 TH FLOOR ANTARIKSHA MURAR ROAD MULUND WEST MUMBAI 400080. PAN AABCG 4114H VS. ACIT 10(3) MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHRI DEEPAK T. CHHE DA RESPONDENT BY SHRI P.K.B. MENON DATE OF HEARING 28.7.2011 DATE OF PRONOUNCEMENT 28.7.2011 ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DT. 18.11.2009 OF CIT(A)- 22 MUMBAI RELATING TO A.Y. 2006-07. 2. GROUND OF APPEAL NO. 1 BY THE ASSESSEE READS AS UNDER:- 1. DISALLOWANCE OF INTEREST U/S 14A READ WITH RULE 8D. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [H EREINAFTER REFERRED TO AS THE LEARNED CIT(A)] ERRED IN MAKING DISALLOWANCE U/S 14A READ WITH RULE 8D WITHOUT CONSIDERING THAT THE APPELLANT HAD SUBSTANTIAL OWN FUNDS AND THAT THE SAID RULE WAS NO T APPLICABLE FOR A.Y. 2006-07. 2 ITA 337 /M/2010 GOGRI AND SONS INVESTMENT P. LTD. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE H AS SHOWN TOTAL INCOME OF ` 1 51 12 238/- WHICH CONSISTS OF EXEMPTED INCOME SU CH AS DIVIDEND INCOME INTEREST ON CAPITAL IN THE PARTNERSHIP FIRM AND UNR EALIZED PROFIT ON PMS. THE TOTAL EXEMPTED INCOME SHOWN WAS AT ` 99 83 718/-. THE A.O. ASKED THE ASSESSEE TO EXPLAIN AS TO WHY PROPORTIONATE INTERES T SHOULD NOT BE DISALLOWED U/S 14A OF THE I.T. ACT. THE A.O. FURTHER NOTED TH AT DURING THE YEAR ASSESSEES INVESTMENTS ARE AT ` 7.09 CRORES AS AGAINST THE NET WORTH OF ` 6.09 CRORES. THEREFORE IT IS APPARENT THAT BORROWED AMOUNT HAS BEEN USED BY THE ASSESSEE FOR INVESTMENT PURPOSES. IN ABSENCE OF ANY CONVINCI NG REPLY FROM THE ASSESSEE THE A.O. DISALLOWED PROPORTIONATE INTEREST AMOUNTIN G TO ` 10 39 833/- AND ADDED TO THE RETURNED INCOME IN THE RATIO OF PERCEN TAGE OF EXEMPT INCOME TO TOTAL RECEIPTS. IN APPEAL THE LD. CIT(A) FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DAGA CAPITAL M ANAGEMENT PVT. LTD. DIRECTED THE A.O. TO DISALLOW THE AMOUNT AFTER CALC ULATING THE SAME UNDER RULE 8D. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US. 4. AFTER HEARING BOTH THE SIDES WE ARE OF THE CONS IDERED OPINION THAT THE MATTER NEEDS TO GO BACK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION IN THE LIGHT OF THE LATEST DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF GODREJ BOYCE MFG. CO. LTD. VS. DCIT REPORTED IN 328 ITR 81. WE THEREFORE RESTORE THE ISSUE TO THE FILE OF THE A.O. FOR FRESH ADJUDICATIO N IN THE LIGHT OF THE DECISION CITED SUPRA AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 5. IN GROUND NO. 2 THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF DEDUCTION U/S 80G OF THE I.T. ACT. 3 ITA 337 /M/2010 GOGRI AND SONS INVESTMENT P. LTD. 6. AFTER HEARING BOTH THE SIDES WE FIND THERE WAS N O SUCH CLAIM MADE BY THE ASSESSEE U/S 80G BEFORE THE A.O. A PERUSAL OF FORM 35 FILED BEFORE THE LD. CIT(A) SHOWS THAT THE ASSESSEE HAS NOT TAKEN ANY GR OUND BEFORE THE LD. CIT(A) CHALLENGING THE DISALLOWANCE OF DEDUCTION IF ANY U/S 80G OF THE I.T. ACT. EVEN THE STATEMENT OF FACTS FILED BEFORE THE LD. CIT(A) SHOWS THAT NO SUCH CLAIM WAS MADE BEFORE THE A.O. UNDER THESE CIRCUMSTANCES THI S GROUND RAISED BY THE ASSESSEE CANNOT BE ENTERTAINED AND DESERVES TO BE D ISMISSED. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING I.E. ON 28.07.2011. SD/- SD/- (D.K. AGARWAL) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 28.07.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 22 MUMBAI 4. THE CIT- 10. MUMBAI 5. THE DR BENCH A 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 4 ITA 337 /M/2010 GOGRI AND SONS INVESTMENT P. LTD. DATE INITIALS 1 DRAFT DICTATED ON 28.7.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 28.7.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER