THE ESTATE INVESTMENT CO. P. LTD, MUMBAI v. ACIT 2(1), MUMBAI

ITA 6658/MUM/2009 | 2006-2007
Pronouncement Date: 15-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 665819914 RSA 2009
Assessee PAN AAACE2566J
Bench Mumbai
Appeal Number ITA 6658/MUM/2009
Duration Of Justice 1 year(s) 6 month(s) 15 day(s)
Appellant THE ESTATE INVESTMENT CO. P. LTD, MUMBAI
Respondent ACIT 2(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 15-07-2011
Date Of Final Hearing 07-07-2011
Next Hearing Date 07-07-2011
Assessment Year 2006-2007
Appeal Filed On 31-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER & SHRI R.S. PADVEKAR JUDICIAL MEMBER. I.T.A. NO. 6658/MUM/2009. ASSESS MENT YEAR : 2006-07. THE ESTATE INVESTMENT CO. PVT. LTD. ASSTT. COMMISSIONER OF INCOME-TAX SEKSARIA CHAMBERS 4 TH FLOOR VS. 2(1) MUMBAI. NAGINDAS MASTER ROAD FORT MUMBAI 400 001. PAN AAACE 2566J APPELLANT. RESPONDENT. APPELLANT BY : SHRI PANKAJ JAIN. RESPO NDENT BY : SHRI GOLI SRINIWAS RAO. 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)-4 MUMBAI DATED 26-11-2009 AND THE SOL ITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE OF RS.2 30 456/- M ADE BY THE AO U/S 14A AND CONFIRMED BY THE LEARNED CIT(APPEALS). 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF MAKING INVESTMENT IN SHARES AND SECURIT IES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 20- 10-2006 DECLARING A TOTAL INCOME OF RS.3 35 56 340/-. IN THE SAID YEAR THE ASSESSEE HAD EARNED DIVIDEND INCOME OF RS.16 24 513/- AND LONG TERM CAPITAL GAIN OF RS.5.2 2 CRORES WHICH WAS CLAIMED TO BE EXEMPT FROM TAX. ACCORDING TO THE AO THE EXPENS ES INCURRED BY THE ASSESSEE IN 2 ITA NO. 6658/MUM/2009 ASSESSMENT YEAR : 2006-07. RELATION TO EARNING OF THE SAID EXEMPT INCOME WERE LIABLE TO BE DISALLOWED U/S 14A. ACCORDINGLY HE WORKED OUT SUCH EXPENSES AS PER RULE 8D OF INCOME TAX RULES 1962 AT RS.2 30 456/- AND A DISALLOWANCE TO THAT EXTENT WAS MADE BY HIM U/S 14A. ON APPEAL THE LEARNED CIT(APPEALS) CONFIR MED THE SAID DISALLOWANCE MADE BY THE AO. AGGRIEVED BY THE ORDER OF THE LEARN ED CIT(APPEALS) THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS HELD BY THE HONBLE BOMBAY H IGH COURT IN THE CASE OF GODREJ BOYCE MANUFACTURING CO. LTD. (2010) 234 CTR (BOM) 1 RULE 8D OF INCOME TAX RULES 1962 IS APPLICABLE ONLY PROSPECTI VELY FROM ASSESSMENT YEAR 2008-09. AS FURTHER HELD BY HONBLE BOMBAY HIGH COU RT THE DISALLOWANCE OF EXPENSES TO BE MADE U/S 14A PRIOR TO ASSESSMENT YEA R 2008-09 HAS TO BE MADE BY ADOPTING SOME REASONABLE METHOD. THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) CONFIRMING THE DISALLOWANCE MADE BY TH E AO U/S 14A BY APPLYING RULE 8D IS THEREFORE SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO DETERMINE THE QUANTUM OF EXPENSES TO BE DISALLOWED U/S 14A BY ADOPTING SOME REASONABLE METHOD AS HELD BY THE HON BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOYCE MANUFACTURING CO. LTD. (SU PRA) 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED AS INDICATED ABOVE. . ORDER PRONOUNCED ON THIS 15 TH DAY OF JULY 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI DATED: 15 TH JULY 2011. 3 ITA NO. 6658/MUM/2009 ASSESSMENT YEAR : 2006-07. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR H-BENCH. (TRUE COPY ) BY ORD ER ASSTT. R EGISTRAR ITAT MUMBAI BEN CHES MUMBA I. WAKODE