SWEET SOLUTIONS LTD, MUMBAI v. ADDL CIT RG 2(3), MUMBAI

ITA 5904/MUM/2009 | 2006-2007
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 590419914 RSA 2009
Assessee PAN AADCS0992F
Bench Mumbai
Appeal Number ITA 5904/MUM/2009
Duration Of Justice 1 year(s) 2 month(s) 23 day(s)
Appellant SWEET SOLUTIONS LTD, MUMBAI
Respondent ADDL CIT RG 2(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 28-01-2011
Date Of Final Hearing 13-01-2011
Next Hearing Date 13-01-2011
Assessment Year 2006-2007
Appeal Filed On 05-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI S.V. MEHROTRA (AM) AND SMT ASHA VIJAYAR AGHAVAN (JM) ITA NO. 5904/MUM/2009) (ASSESSMENT YEAR-2006-07) M/S. SWEET SOLUTIONS LTD. (NOW KNOWN AS SUBHKAM VENTURES INDIA LTD. ) 15 ONLOOKER BLDG. 2 ND FLOOR SIR. P.M. ROAD FORT MUMBAI-400 001 PAN-AADCS 0992F VS. THE ACIT RANGE 2(3) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.C. JAIN RESPONDENT BY: SHRI D. SONGATE O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-XXX MUMBAI DATED 28.8.2009 FOR THE A.Y.2 006-07. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS ELECTRONICALLY FILED ITS RETURN OF INCOME ON 27.11.2006 DECLARING TOTAL INCOME OF RS. 12 78 98 311/-. THE ASSESSEE IS ENGAGED IN THE BUS INESS OF SHARE TRADING AS WELL AS INVESTMENT IN SHARES. 3. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. THE LEARNED CIT(A) ERRED IN LAW AND IN FACTS CO NFIRMATION THE ACTION OF THE AO AS TO PROVISIONS OF SEC. 14A A RE APPLICABLE TO THE APPELLANT WITHOUT APPRECIATING TH E FACTS THAT CONDITIONS PRECEDENT TO SEC. 14A ARE NOT SATIS FIED. ITA NO. 5904/M/09 2 2. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT( A) ERRED IN COMPUTING THE DISALLOWANCE U/S. 14A AT RS. 30 40 46 9/- WHICH IS SUBSTANTIALLY ON THE HIGHER SIDE AND CANNO T BE JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE APPELLANT PRAYS THAT DISALLOWANCE CONFIRMED U/S. 14A TO THE EXTENT OF RS. 30 40 469/- MAY BE DELETED. 3. THE ASSESSEE COMPANY HAS RECEIVED DIVIDEND OF RS . 29 93 054/- WHICH IS CLAIMED EXEMPT U/S. 10(34) OF THE I.T. ACT 1961 . SIMILARLY IT HAS RECEIVED LTCG INCOME OF RS. 27 80 39 738/- WHICH IS CLAIMED AS EXEMPT U.S. 10(38) OF THE I.T. ACT 1961. THE ASSESSEE HAS NOT ALLOCA TED ANY EXPENDITURE AGAINST EARNING THE EXEMPT INCOME. THE AO FOLLOWIN G THE RULING GIVEN BY THE HONBLE ITAT SPECIAL BENCH IN THE CASE OF DAGA CAPITAL MANAGEMENT PVT. LTD. HELD THAT PROVISION OF SEC. 14A IS RETROS PECTIVE IN NATURE AND DISALLOWANCE NEEDS TO BE MADE AS PER FORMULA SPECIF IED UNDER RULE 8D. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LEARNED CIT(A). THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE AO HAS CORRECTLY INVOKED THE PROVISIONS OF SEC. 14A AN D THEREFORE GROUND NO. 3 OF GROUNDS OF APPEAL FAILS. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE U S. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE RECENT JUDGEMENT DT. 12.8.2010 BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE LTD. VS ACIT HOLDING THAT THE PROVISIONS OF SEC. 14A ARE APPLICABLE IN SUCH CIRCUMSTANCES AND THE DI SALLOWANCE HAS TO BE WORKED OUT BY THE AO ON SOME REASONABLE BASIS. UND ER SUCH CIRCUMSTANCES WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE QUANTUM OF DISA LLOWANCE AS PER THE AFORENOTED JUDGEMENT AFTER ALLOWING A REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 5904/M/09 3 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 28 TH DAY OF JANUARY 2011 SD/- SD/- (S.V. MEHROTRA ) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 28 TH JANUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO. 5904/M/09 4 DATE INITIALS 1 DRAFT DICTATED ON: 13. 01. 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 14. 01 .201 1 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/ PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10 . DATE OF DISPATCH OF OR DER: ______