GLOBE TROTTERS P.LTD, MUMBAI v. ITO 10(1)(1), MUMBAI

ITA 6229/MUM/2010 | 2006-2007
Pronouncement Date: 09-12-2011 | Result: Partly Allowed

Appeal Details

RSA Number 622919914 RSA 2010
Assessee PAN AAACG1784E
Bench Mumbai
Appeal Number ITA 6229/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 23 day(s)
Appellant GLOBE TROTTERS P.LTD, MUMBAI
Respondent ITO 10(1)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-12-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted G
Tribunal Order Date 09-12-2011
Assessment Year 2006-2007
Appeal Filed On 16-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND SHRI V. DURGA RAO JUDICIAL MEMBER I.T.A. NO. 6229/MUM/2010 ASSESSMENT YEAR : 2006-07. M/S GLOBE TROTTERS PVT. LTD. THE INCOME-TAX OFFICER 167 C.S.T. ROAD KALINA VS. 10(1)(1) MUMBAI. SANTRACURZ (WEST) MUMBAI 400 020. PAN AAACG 1784E. APPELLANT. RESPONDENT APPELLANT BY : SHRI SANJAY MUT HE. RESPONDENT BY: SHRI A.K. NAYAK.. DATE OF HEARING : 28-11-2011. DATE OF PRONOUNCEMENT : 09-12-2011. O R D E R. PER P.M. JAGTAP A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS-21 MUMBAI DATED 09-06-2010 AND THE MAI N ISSUE ARISING OUT OF THE SAME AS RAISED IN GROUND NO.1 RELATES TO THE DISALL OWANCE OF RS.3 67 297/- MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS) U/ S 14A READ WITH RULE 8D OF THE INCOME TAX RULES 1962. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF INDUSTRY DRUGS AND PHARM ACEUTICALS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 30-11-2006 DECLARING TOTAL INCOME OF RS.19 09 551/-. IN THE SAID RETURN DIVIDEND INCOME OF 2 ITA NO.6229/MUM/2010 ASSESSMENT YEAR:2006-07. RS.2 16 550/- RECEIVED ON SHARES OF MUTUAL FUND WAS CLAIMED TO BE EXEMPT BY THE ASSESSEE. NO DISALLOWANCE ON ACCOUNT OF ANY EXPENDI TURE INCURRED IN RELATION TO THE SAID EXEMPT INCOME HOWEVER WAS MADE BY THE ASSESS EE AS REQUIRED BY THE PROVISIONS OF SECTION 14A. IN THE ASSESSMENT COMPLE TED U/S 143(3) THE AO WORKED OUT SUCH EXPENSES AT RS.3 67 297/- BY APPLYING RULE 8D OF INCOME TAX RULES 1962 AND MADE A DISALLOWANCE TO THAT EXTENT. ON APP EAL THE LEARNED CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE MADE BY THE AO U/S 14A READ WITH RULE 8D RELYING ON THE DECISION OF SPECIAL BENCH OF ITAT IN THE CASE OF DAGA CAPITAL MANAGEMENT P. LTD. 117 ITS 169 (MUM.)(S.B.) WHEREIN IT WAS HELD THAT RULE 8D HAS A RETROSPECTIVE APPLICATION. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRES ENTATIVES OF BOTH THE SIDES THE ISSUE INVOLVED IN THIS APPEAL NOW STANDS SQUARELY C OVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOY CE MANUFACTURING CO. LTD. (2010) 234 CTR (BOM) 1 WHEREIN IT HAS BEEN HELD TH AT RULE 8D OF INCOME-TAX RULES 1962 IS APPLICABLE ONLY FROM ASSESSMENT YEAR 2007-08. AS FURTHER HELD BY HONBLE HIGH COURT THE DISALLOWANCE U/S 14A FOR TH E YEARS PRIOR TO ASSESSMENT YEAR 2007-08 HAS TO BE MADE BY ADOPTING SOME REASON ABLE METHOD. RESPECTFULLY FOLLOWING THE SAID DECISION OF HONBLE JURISDICTION AL HIGH COURT WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO RECOMPUTE TH E DISALLOWANCE OF EXPENSES TO BE MADE U/S 14A BY APPLYING SOME REASONABLE METHOD AFT ER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 5. GROUND NO. 1 OF THE ASSESSEES APPEAL IS ACCORDI NGLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 3 ITA NO.6229/MUM/2010 ASSESSMENT YEAR:2006-07. 6. GROUND NO.2 RAISED BY THE ASSESSEE IN THIS APPEA L RELATING TO DISALLOWANCE OF RS.5008 MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS) ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTION TOWARD S PF AND ESIC IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF DEC. 2011. SD/- SD/- (V. DURGA RAO) (P.M. J AGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED : 9 TH DEC. 2011. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR G-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI. WAKODE