DCIT, New Delhi v. Bharat Seats Ltd., New Delhi

ITA 523/DEL/2011 | 2007-2008
Pronouncement Date: 14-07-2011 | Result: Allowed

Appeal Details

RSA Number 52320114 RSA 2011
Bench Delhi
Appeal Number ITA 523/DEL/2011
Duration Of Justice 5 month(s) 13 day(s)
Appellant DCIT, New Delhi
Respondent Bharat Seats Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 14-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year 2007-2008
Appeal Filed On 31-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI B.K. HALDAR ACCOUNTANT MEMBER I.T.A. NO.523/DEL/2011 ASSESSMENT YEAR : 2007-08 DCIT BHARAT SEATS LTD. CIRCLE-2 (1) D-188 OKHLA INDL. AREA NEW DELHI. V. PHASE-I NEW DELJH (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACB AAACB AAACB AAACB- -- -0219 0219 0219 0219- -- -M MM M APPELLANT BY : MRS. MONA MOHANTY SR. DR. RESPONDENT BY : SHRI R.K.KAPOOR C.A. ORDER PER B.K. HALDAR AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD CIT(A) V NEW DELHI DATED 26.11.2010 FOR ASSESSMENT YE AR 2007-08. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. THE LD CIT(A) HAD ERRED ON FACTS AND IN LAW IN DELET ING ADDITION UP TO `.27 36 131/- MADE ON ACCOUNT OF DISALLOWANCE OF EXPENSES ATTRIBUTABLE TO EXEMPT INCOME U/S 14A OF THE INCOME TAX ACT 1961. LD CIT(A) HAS FAILED TO TAKE COGNIZAN CE OF SUB SECTION (3) OF SECTION 14A WHICH SPECIFIES THAT EVEN I F THE ASSESSEE MAKES A CLAIM THAT NO EXPENDITURE HAS BEEN INCUR RED IN EARNING THE EXEMPTED INCOME. SUB SECTION (2) OF SE CTION 14A PAGE 2 OF 4 ITA NO523./DEL/11 SHALL APPLY MEANING THEREBY DISALLOWANCE U/S 14A(1) I S CALLED FOR. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT( A) HAS ERRED IN LAW AND ON FACTS IN DELETING DISALLOWANCE OF `.77 56 391/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXPENDITURE ON TECHNICAL KNOW HOW HOLDING THAT SAME IS ALLOWABLE U/S 37(1) OF THE INCOME TAX ACT 1961 BEIN G OF REVENUE NATURE IGNORING CONTENTION OF ASSESSING OFFICER WHO TRE ATED THE EXPENDITURE AS OF CAPITAL NATURE AS INCURRED EXPENDIT URE ENTAILS BENEFITS OF ENDURING NATURE TO ASSESSEE. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT T O AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND9S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. AS REGARDS THE GROUND NO.2 TAKEN BY THE REVENUE WI TH REFERENCE TO DELETION OF DISALLOWANCE OF `.77 56 391/- ON ACCO UNT OF EXPENDITURE ON TECHNICAL KNOW HOW IT IS THE COMMON SUBMISSION OF BOTH THE PARTIES THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURTS DECISION DATED 8 TH OCTOBER 2010 IN I.T.A. NO.2011/2007 I.T.A. NO.107/2009 I.T.A. NO. 293 OF 2010 I.T.A. NO.840 OF 2010 AND I.T.A. NO. 839/DEL/.2010 IN ASSESSEES OWN C ASE. IN VIEW OF THE ABOVE WE DISMISS THE GROUND NO.2 TAKEN BY THE REV ENUE. 3. AS REGARDS GROUND NO.1 TAKEN BY THE REVENUE WITH R EFERENCE TO DISALLOWANCE OF EXPENSES ATTRIBUTABLE TO EXEMPT INCOME U/S 14A OF THE INCOME TAX ACT 1961 WE HAVE HEARD BOTH THE PARTIE S. WE FIND THAT THE LD CIT(A) HAS NOT GIVEN ANY REASON AS TO WHY DISALL OWANCE OF `. 2 LAKHS ON THIS ACCOUNT COULD BE FAIR AND REASONABLE. WE ARE IN AGREEMENT WITH HIS FINDING THAT IN VIEW OF THE HON' BLE BOMBAY HIGH COURTS DECISION IN THE CASE OF GODREJ & BOYCE MFG. C O. LTD. REPORTED PAGE 3 OF 4 ITA NO523./DEL/11 IN 328 ITR 81 RULE 8D IS NOT APPLICABLE IN THE ASSESSME NT YEAR UNDER CONSIDERATION. HOWEVER THE DISALLOWANCE HAS TO BE MAD E ON A REASONABLE BASIS TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OBTAINED IN THE PRESENT CASE. IN VIEW OF THE ABOVE WE SET ASIDE THE IMPUGNED ORDERS OF THE AUT HORITIES BELOW ON THIS ISSUE AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT A FRESH ORDER BE PASSE D ON THIS ISSUE AS PER LAW KEEPING IN VIEW OUR FINDING THAT RULE 8D IS NOT APPLICABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THUS THIS GROUND OF APPEAL TAKEN BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE S. 4. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED IN PART. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 14 TH JULY 2011. SD/- SD/- (R.P. TOLANI) (B.K. HAL DAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 14.7.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DEL HI. TRUE COPY. BY ORDER (ITAT NEW DELHI). PAGE 4 OF 4 ITA NO523./DEL/11 DATE OF HEARING 14.7.2011 DATE OF DICTATION 18.7.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 18.7.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 18.7.2011