NANAVATI ELECTRONICS P. LTD, MUMBAI v. ITO 2(2)(3), MUMBAI

ITA 6032/MUM/2010 | 2007-2008
Pronouncement Date: 28-12-2011 | Result: Allowed

Appeal Details

RSA Number 603219914 RSA 2010
Assessee PAN AAACN1870E
Bench Mumbai
Appeal Number ITA 6032/MUM/2010
Duration Of Justice 1 year(s) 4 month(s) 23 day(s)
Appellant NANAVATI ELECTRONICS P. LTD, MUMBAI
Respondent ITO 2(2)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-12-2011
Assessment Year 2007-2008
Appeal Filed On 04-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI. BEFORE SHRI N.V.VASUDEVAN JUDICIAL MEMBER AND PRAMOD KUMAR ACCOUNTANT MEMBER I.T.A NO. 6032 / MUM/2010 ASSESSMENT YEAR: 2007-08 NANAVATI ELECTRONICS P. LTD. .. APPELLANT 6T FLOOR NANAVATI MAHALAYA 18 HOMI MODY STREET FORT MUMBI-23. PA NO.AAACN 1870 E VS INCOME TAX OFFICER 2(2)(3) .. RESPONDENT AAYAKAR BHAVAN M.K. ROAD MUMBAI. APPEARANCES: RITESH THAKKAR FOR THE APPELLANT P.C.MAURYA FOR THE RESPONDENT DATE OF HEARING : 21.12.2011 DATE OF PRONOUNCEMENT : 28 -12-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL THE ASSESSEE-APPELLANT HAS CHAL LENGED CORRECTNESS OF CIT(A)S ORDER DATED 24.5.2010 2010 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUND: THE CIT(A) ERRED IN HOLDING THAT THE ITO WAS RIG HT IN MAKING A DISALLOWANCE OF RS.1 54 574 U/S.14A R.W.S 8D RELYING ON THE DECISION OF DAGA CAPITAL INVESTMENT LTD (26 SOT 603) (MUM)(SB). THE APPELLANTS PRAYS THAT THE DISALLOWANCE OF RS.1 54 574 MADE BY THE ITO BE CANCELLED. 2. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS EARNED EXEM PTED INCOME OF RS.77 378 BEING SHARE PROFIT FROM PARTNERSHIP FIRM. T HE AO ALSO NOTED THAT THE NO I.T.A NO. 6032 / MUM/2010 ASSESSMENT YEAR: 2007-08 2 EXPENDITURE ATTRIBUTABLE TO THE EARNING OF EXEMPTED INCOME HAS BEEN DISALLOWED BY THE ASSESSEE AS REQUIRED UNDER SECTION 14A OF THE ACT. T HE AO ACCORDINGLY WORKED OUT THE DISALLOWANCE AT RS.1 51 574 IN TERMS OF RULE 8 D. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) RELYING ON THE DECISION OF ITAT MUMBAI IN THE CASE OF DAGA CAPITAL MANAGEMENT P. LTD . 26 SOT 609 UPHELD THE STAND TAKEN BY THE AO. 3. LEARNED REPRESENTATIVES AGREE THAT SO FAR AS THE QUE STION OF RULE 8D IS CONCERNED THE ISSUE IS NOW COVERED IN FAVOUR OF THE A SSESEE BY THE HONBLE JURISDICTIONAL HIGH COURTS JUDGEMENT IN THE CASE OF G ODREJ & BOYCE MFG CO LTD VS DCIT (328 ITR 81) WHEREIN IT HAS BEEN HELD THAT R ULE 8D OF THE INCOME TAX RULES 1962 IS APPLICABLE ONLY PROSPECTIVELY I.E. FROM A.Y. 2008-09. THE ASSESSMENT YEAR INVOLVED IN THE PRESENT CASE IS 2007-08 AND THEREFO RE RULE 8D IS NOT APPLICABLE IN THE PRESENT CASE. THE HONBLE HIGH COURT HAS HELD TH AT A REASONABLE DISALLOWANCE FOR EXPENSES INCURRED IN EARNING DIVIDEND INCOME IS NEVER THELESS TO BE COMPUTED BY THE AO. IN VIEW OF THE DECISION OF THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MFG CO. LTD (SUPRA) WE REMIT THE ISSUE TO THE FILE OF THE AO TO RE- COMPUTE THE DISALLOWANCE U/S.14A IN THE LIGHT OF THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ BOYCE MFG CO. LTD (SUPRA). 4. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. PRONOUNCED IN THE OPEN COURT ON 28 TH DECEMBER 2011 SD/- (N.V.VASUDEVAN) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI DATED 28 TH DECEMBER 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-5 4. COMMISSIONER OF INCOME TAX 2 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI I.T.A NO. 6032 / MUM/2010 ASSESSMENT YEAR: 2007-08 3