LEE & MUIRHEAD P. LTD, MUMBAI v. DCIT CIR 2(2), MUMBAI

ITA 4452/MUM/2010 | 2007-2008
Pronouncement Date: 14-09-2011

Appeal Details

RSA Number 445219914 RSA 2010
Assessee PAN AAACL0918M
Bench Mumbai
Appeal Number ITA 4452/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 13 day(s)
Appellant LEE & MUIRHEAD P. LTD, MUMBAI
Respondent DCIT CIR 2(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-09-2011
Appeal Filed By Assessee
Bench Allotted A
Date Of Final Hearing 14-09-2011
Next Hearing Date 14-09-2011
Assessment Year 2007-2008
Appeal Filed On 31-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A BEFORE SHRI D. MANMOHAN (VP) & SHRI RAJENDRA SINGH (AM) I.T.A.NO. 4452/MUM/2010 (ASSESSMENT YEAR : 2007-08) M/S. LEE & MUIRHEAD PVT. LTD. ORICON HOUSE 2 ND FLOOR 12-K DUBHASH MARG FORT MUMBAI-400 023. VS. DCIT 2(2) ROOM NO. 545 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. PAN/GIR NO. : AAACL0918M ASSESSEE BY : NONE DEPARTMENT BY : SHRI P.KB. MENON DATE OF HEARING : 14.9.2011 DATE OF PRONOUNCEMENT : 14.9.2011 ORDER PER D. MANMOHAN (VP) :- THIS APPEAL IS FILED AT THE INSTANCE OF THE ASSESSE E-COMPANY AND IT PERTAINS TO THE A.Y. 2007-08. 2. TWO ISSUES WERE RAISED IN THIS APPEAL FILED BY T HE ASSESSEE- COMPANY. 3. FIRST ISSUE IS WITH REGARD TO THE DISALLOWANCE O F A SUM OF ` 5 87 688/- UNDER SECTION 14A OF THE I.T. ACT. THE A SSESSING OFFICER AS WELL AS LEARNED CIT(A) WERE OF THE OPINION THAT SEC TION 14A APPLIES TO ALL DIRECT AND INDIRECT EXPENSES AND DISALLOWANCE OF TH E EXPENDITURE SHOULD BE SUBJECT TO THE PROCEDURE STIPULATED UNDER RULE 8 D OF THE INCOME TAX RULES. 4. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND CAREFULLY PERUSED THE RECORD. THE ASSESSING OFFICER AS WELL A S LEARNED CIT(A) HAVE APPLIED RULE 8D TO WORK OUT THE AMOUNT DISALLOWABLE UNDER SECTION 14A OF THE ACT WHEREAS HON'BLE BOMBAY HIGH COURT IN TH E CASE OF GODREJ & BOYCE MFG. VS. DCIT AND ANOTHER (2010) 328 ITR 81 ( BOM) HELD THAT M/S. LEE & MUIRHEAD PVT. LTD. 2 RULE 8D HAS NO RETROSPECTIVE APPLICATION. UNDER THE CIRCUMSTANCES WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OF FICER WHO IS DIRECTED TO WORK OUT THE DISALLOWANCE IF ANY UNDER SECTION 14 A OF THE ACT WITHOUT TAKING AID OF RULE 8D. 5. NEXT ISSUE IS WITH REGARD TO THE DISALLOWANCE OF ` 23 196/- BEING EMPLOYEES CONTRIBUTION TO ESIC. ADMITTEDLY THE AMO UNT IS PAID BEFORE THE END OF THE ACCOUNTING YEAR THOUGH IT WAS BEYOND THE PERIOD STIPULATED UNDER SECTION 36(1)(VA) OF THE ACT. THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) DISALLOWED THE CLAIM OF DEDU CTION BY INVOKING PROVISIONS OF SECTION 43B OF THE ACT. LEARNED CIT(A ) HAD ALSO OBSERVED THAT DESPITE RETROSPECTIVE AMENDMENT TO SECTION 43B OF THE ACT THERE IS NO CORRESPONDING CHANGE IN SECTION 36(1)(VA) WHICH SHOWS THAT THE LEGISLATURE IN ITS WISDOM DID NOT THINK IT PROPER TO PROVIDE THE EMPLOYERS ANY BENEFIT IN RESPECT OF DEPOSIT OF THE EMPLOYEES CONTRIBUTION SUBSEQUENT TO CUT OFF DATE. 6. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY REL IED UPON THE ORDER OF LEARNED CIT(A) WHICH IN TURN WAS BASED U PON THE DECISIONS OF ITAT MUMBAI BENCHES. HOWEVER IT MAY BE NOTICED THA T SUBSEQUENT TO THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. GODAVARI (MANNAR) SAHAKARI SAKHAR KARKHANA LTD. 29 8 ITR 149 ITAT MUMBAI BENCHES HAVE CONSISTENTLY BEEN HOLDING THAT SO LONG AS PAYMENT IS MADE BEFORE THE END OF THE ACCOUNTING YEAR DISAL LOWANCE IS NOT CALLED FOR U/S. 43B OF THE ACT; SUBSEQUENT DECISION OF APE X COURT WAS FOLLOWED BY ITAT. IN THE CASE OF SONAL GARMENTS VS. ACIT IT AT J BENCH MUMBAI (ITA NO. 2853/MUM/2010 DATED 9-9-2011 WHEREI N ONE OF US I.E. VP IS A PARTY) HAD TAKEN AN IDENTICAL VIEW I N THE LIGHT OF THE LATER DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT V S. ALOM EXTRUSIONS LTD. 319 ITR 306. WE ARE THEREFORE OF THE VIEW THA T THE ASSESSEE IS ENTITLED TO DEDUCTION OF ` 23 196/-. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. M/S. LEE & MUIRHEAD PVT. LTD. 3 7. WITH THESE OBSERVATIONS AS PRONOUNCED IN THE OP EN COURT APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STA TISTICAL PURPOSES. SD/- (RAJENDRA SINGH) ACCOUNTANT MEMBER SD/- (D. MANMOHAN) VICE-PRESIDENT DATED : 14 TH SEPTEMBER 2011. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT CONCERNED. 5. THE DR CONCERNED MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI PS