ACIT CIR 2(3), MUMBAI v. HDFC BANK LTD ( SUCCESSOR OF CENTURION BANK OF PUNJAB LTD), MUMBAI

ITA 6912/MUM/2010 | 2007-2008
Pronouncement Date: 21-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 691219914 RSA 2010
Assessee PAN AAACC2772R
Bench Mumbai
Appeal Number ITA 6912/MUM/2010
Duration Of Justice 1 year(s) 4 month(s) 17 day(s)
Appellant ACIT CIR 2(3), MUMBAI
Respondent HDFC BANK LTD ( SUCCESSOR OF CENTURION BANK OF PUNJAB LTD), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-02-2012
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 21-02-2012
Assessment Year 2007-2008
Appeal Filed On 04-10-2010
Judgment Text
M/S HDFC BANK LTD ITA NO. 6938/MUM/2010 ITA NO.6912/MUM/2010 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI H HH H BENCH BENCH BENCH BENCH MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI RAJENDRA SINGH AM RAJENDRA SINGH AM RAJENDRA SINGH AM RAJENDRA SINGH AM & & & & SHRI SHRI SHRI SHRI VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM ITA NO ITA NO ITA NO ITA NO. 6938/MUM/2010 . 6938/MUM/2010 . 6938/MUM/2010 . 6938/MUM/2010 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 200 200 200 2006 66 6- -- -07 0707 07) )) ) M/S HDFC BANK LTD (SUCCESSOR OF CENTURION BANK OF PUNJAB LTD) (SUCCESSOR OF CENTURION BANK OF PUNJAB LTD) (SUCCESSOR OF CENTURION BANK OF PUNJAB LTD) (SUCCESSOR OF CENTURION BANK OF PUNJAB LTD) HDFC BANK HOUSE SENAPATI BAPAT MARG LOWER PAREL - MUMBAI 400 018 VS THE DY COMMR OF INCOME TAX 2(3) MUMBAI (APPELLANT (APPELLANT (APPELLANT (APPELLANT/CROSS OBJECTOR /CROSS OBJECTOR /CROSS OBJECTOR /CROSS OBJECTOR) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO.6912/MUM/2010 .6912/MUM/2010 .6912/MUM/2010 .6912/MUM/2010 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2007 2007 2007 2007- -- -08) 08) 08) 08) THE DY COMMR OF INCOME TAX 2(3) MUMBAI VS M/S HDFC BANK LTD (SUCCESSOR OF CENTURION BANK OF (SUCCESSOR OF CENTURION BANK OF (SUCCESSOR OF CENTURION BANK OF (SUCCESSOR OF CENTURION BANK OF PUNJAB PUNJAB PUNJAB PUNJAB LTD) LTD) LTD) LTD) HDFC BANK HOUSE SENAPATI BAPAT MARG LOWER PAREL - MUMBAI 400 018 (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO. PAN NO. PAN NO. PAN NO. PAN NO.AAACC2772R AAACC2772R AAACC2772R AAACC2772R ASSESSEE BY SHRI YOGESH A THAR REVENUE BY SHRI GOLI SRINIWAS RAO DT.OF HEARING 21 ST FEB 2012 DT OF PRONOUNCEMENT 21 ST FEB 2012 ORDER ORDER ORDER ORDER PER PER PER PER BENCH: BENCH: BENCH: BENCH: THE ASSESSEE HAS CHALLENGED THE ORDER DATED 16 TH JULY 2010 OF THE CIT(A) FOR THE AY 2006-07 AND IN THE OTHER APPEAL THE REV ENUE HAS CHALLENGED THE ORDER DATED 16 TH JULY 20120 FOR THE ASSESSMENT YEAR 2007-08. M/S HDFC BANK LTD ITA NO. 6938/MUM/2010 ITA NO.6912/MUM/2010 2 2. IN ITA NO ITA NO ITA NO ITA NO. 6938/MUM/ . 6938/MUM/ . 6938/MUM/ . 6938/MUM/2010 2010 2010 2010 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE (CIT(A)) ERRED IN UPHOLDING THE ACTION OF THE ASSISTANT COMMISSIONER OF INCOME TAX RANGE 2(3) MUMBAI (THE AC) IN DISALLOWING A SUM OF RS. 81.28 LACS U/S. 14A OF THE INCOME TAX ACT 1961(THE ACT). 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD T HAT THE PROVISIONS OF RULE 8D WERE NOT APPLICABLE TO THE FACTS OF THIS CASE. 3. THE APPELLANT PRAYS THAT THE DISALLOWANCE U/S 14 A OF RS. 81.26 LACS BE DELETED. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AC IN DISALLOWING A SUM OF RS. 81.28 LACS AND NOT RS. 56 LACS AS WORKED OUT BY THE AO AS PER RULE 8D OF T HE INCOME TAX RULES 1962. 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD T HAT THE APPELLANT IN ITS RETURN OF INCOME HAS OFFERED RS. 81.28 LACS AS DISALLOWANC E U/S 14A ON CONSERVATIVE BASIS. 3. THE APPELLANT THEREFORE PRAYS THAT THE DISALLOWA NCE U/S 14A BE RESTRICTED TO THE EXTENT OF RS. 56 LACS INSTEAD OF RS. 81.28 LACS. 3 IN ITA NO ITA NO ITA NO ITA NO.6912/MUM/2010 .6912/MUM/2010 .6912/MUM/2010 .6912/MUM/2010 THE REVENUE HAS RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS. 872.63 LACS O N ACCOUNT OF DISALLOWANCE OF EXPENSE U/S 14A R.W.R 8D (2)(I) WIT HOUT APPRECIATING THE FACT THAT THE BORROWED FUNDS WERE UTILIZED FOR EARN ING THE INCOME WHICH DID NOT FORM PART OF THE TOTAL INCOME CHARGEABLE TO TAX. 4 SINCE THE ASSESSEE AND THE REVENUE HAVE RAISED SI MILAR ISSUE IN RESPECT OF RESPECTIVE APPEALS; THEREFORE FOR THE SAKE OF CONV ENIENCE WE HEARD BOTH THESE APPEALS TOGETHER AND DISPOSED OFF BY THIS COMMON OR DER. THE ISSUE IN BOTH THESE APPEALS IS REGARDING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A BY APPLYING RULE 8D. 4.1 FOR THE ASSESSMENT YEAR 2006-07 THE CIT(A) CON FIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WHEREAS FOR THE AY 20 07-08 THE CIT(A) HAS DELETED THE ADDITION MADE ON ACCOUNT OF DISALLOWANC E OF EXPENDITURE U/S 14A. M/S HDFC BANK LTD ITA NO. 6938/MUM/2010 ITA NO.6912/MUM/2010 3 4.2 BOTH THE LD AR OF THE ASSESSEE AS WELL AS THE LD DR HAVE FAIRLY SUBMITTED THAT THE ISSUE REQUIRES RECONSIDERATION IN THE LIGH T OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX REPORTED IN 328 ITR 81. 5 WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL A S THE RELEVANT MATERIAL ON RECORD. THE DISALLOWANCES IN THESE YEARS HAVE BEEN MADE BY APPLYING THE PROVISIONS OF RULE 8D WHICH IS NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG CO LTD (SUPRA). THEREFORE WE R EMIT THE ISSUE IN BOTH THESE APPEALS TO THE RECORD OF THE ASSESSING OFFICER FOR DECIDING THE SAME IN LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF GODREJ (SUPRA). 6 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE A S WELL AS THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING I.E. ON 21 ST FEB 2012 SD/ SD/ SD/ SD/ SD/ SD/ SD/ SD/- -- - ( (( ( RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 21 ST FEB 2012 RAJ* RAJ* RAJ* RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER M/S HDFC BANK LTD ITA NO. 6938/MUM/2010 ITA NO.6912/MUM/2010 4 DY /AR ITAT MUMBAI