ITO 1(1)(4), v. GODAVARI CORPN P.LTD,

MA 270/MUM/2010 | 1997-1998
Pronouncement Date: 03-09-2010 | Result: Allowed

Appeal Details

RSA Number 27019924 RSA 2010
Assessee PAN AAACG1850D
Bench Mumbai
Appeal Number MA 270/MUM/2010
Duration Of Justice 4 month(s) 10 day(s)
Appellant ITO 1(1)(4),
Respondent GODAVARI CORPN P.LTD,
Appeal Type Miscellaneous Application
Pronouncement Date 03-09-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 03-09-2010
Assessment Year 1997-1998
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER MA NO. 270/MUM/2010 (ARISING OUT OF ITA NOS. 4902 & 4929/MUM/2005) (ASSESSMENT YEAR: 1997-98) INCOME TAX OFFICER - 1(1)-4 M/S. GODAVARI CORPN. P . LTD. AAYAKAR BHAVAN M.K. ROAD INDUSTRY HOUSE 159 CHURC HGATE MUMBAI 400020 VS. MUMBAI 400020 PAN - AAACG 1850 D APPLICANT RESPONDENT APPELLANT BY: SHRI S.K. SINGH RESPONDENT BY: SHRI VIJAY C. KOTHARI O R D E R PER B. RAMAKOTAIAH A.M. THE REVENUE HAS RAISED THE FOLLOWING MISTAKE APPARE NT FROM RECORD VIDE MISCELLANEOUS APPLICATION NO. 270/MUM/2010 FIL ED ON 23.04.2010: - 3. IT IS RESPECTFULLY SUBMITTED THAT THE DECISION OF THE HON'BLE ITAT IN APPEAL NO. 4929 AND 4902 FOR A.Y. 1997-98 TO SET-AS IDE THE ORDER OF THE CIT(A) AND RESTORE THE ISSUE BACK TO THE FILE OF A. O. WITH A DIRECTION TO DECIDE THE SAME AFRESH IN THE LIGHT OF DECISION OF THE SPECIAL BENCH IN THE CASE OF DAGA CAPITAL MANAGEMENT P. LTD. NEEDS TO BE RECONSIDERED AS THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE HO N'BLE TRIBUNAL SINCE SECTION 14A HAS NO APPLICATION IN THIS YEAR. THE DI VIDEND INCOME WAS TAXABLE IN THE YEAR UNDER CONSIDERATION. THE HON'BL E ITAT HAS GIVEN DIRECTIONS IN LINE WITH APPEALS OF SUBSEQUENT YEARS WHERE SIMILAR DISALLOWANCE WAS INVOLVED BUT DIVIDEND WAS NOT TAXA BLE IN THOSE YEARS. 2. REVENUES SUBMISSION IS THAT SINCE THE DIVIDEND WAS TAXABLE IN THE YEAR QUESTION OF DISALLOWANCE AND SCRUTINY DOES NO T ARISE AND THERE WAS NO NEED TO SET ASIDE TO THE A.O. IN LINE WITH OTHER YE ARS. 3. CONSEQUENT TO THIS MA WE HAVE EXAMINED THE REVENUE S GROUND WHICH IS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE OF RS. 45 42 092/- MADE U/S 14A OF THE ACT TO THE EXTENT OF DIVIDEND RECEIVED O F RS.36 45 479/-. MA NO. 270/MUM/2010 M/S. GODAVARI CORPN. P. LTD. 2 4. AS SEEN FROM THE ASSESSMENT ORDER THE A.O. HAS CON SIDERED AN AMOUNT OF ` 45 42 092/- AS INTEREST PERTAINING TO INVESTMENT IN SHARES AND THE SAME WAS DISALLOWED FROM THE CLAIM OF BUSINESS INCOME UNDER SECTION 36(1)(III) BUT THE SAME WAS HOWEVER ALLOWED UNDER INCOME FROM OTHER SOURCES WHICH HAS NO TAX EFFECT AS SUCH. THE ASSES SEE HOWEVER CONTESTED THE SAME BEFORE THE CIT(A) WITH REFERENCE TO QUANTU M OF DISALLOWANCE AND THE CIT(A) IN LINE WITH THE ORDER FOR A.Y. 1998-99 RESTRICTED THE DISALLOWANCE TO THE EXTENT OF DIVIDEND EARNED I.E. ` 36 45 479/-. HE ALSO DISALLOWED AN AMOUNT OF ` 50 000/- OUT OF ADMINISTRATIVE EXPENSES. WHILE ACCEPTING THE DISALLOWANCE OF ` 50 000/- ADMINISTRATIVE EXPENSES DELETED BY THE CIT(A) THE REVENUE HAS RAISED THE ABOVE GROUND CONTESTING THE ORDER OF THE CIT(A) INVOKING SECTION 14A IN THE GROUND OF AP PEAL ITSELF. SINCE THE ISSUE WAS CONTESTED UNDER SECTION 14A THE BENCH HA S RESTORED IT TO THE A.O. TO CONSIDER IN LINE WITH THE SPECIAL BENCH DECISION IN THE CASE OF DAGA CAPITAL MANAGEMENT P. LTD. 5. NOW IT IS BROUGHT TO OUR NOTICE THAT SECTION 14A H AS NO APPLICATION IN THIS ASSESSMENT YEAR. AS SEEN FROM THE APPEAL IN IT A NO. 4902/MUM/2005 OF THE ASSESSEE THE ASSESSEE HAS ALSO CONTESTED TH E SAME ISSUE UNDER SECTION 14A WHICH WAS CONSIDERED IN PARA 21 & 22 O F THE ORDER. SINCE THESE TWO GROUNDS ARE INTERLINKED IT IS NOT POSSIBLE TO PASS A MODIFICATION ORDER ONLY WITH REFERENCE TO THE GROUND OF THE REVENUE. I N VIEW OF THIS GROUND NO. 3 IN ASSESSEES APPEAL ITA NO. 4902/MUM/2004 AND GR OUND NO. 1 IN REVENUES APPEAL ITA NO. 4920/MUM/2005 ARE RECALLED FOR FRESH HEARING AND NECESSARY ORDERS. FOR THIS LIMITED PURPOSE ORDE RS TO THAT EXTENT ARE RECALLED. REGISTRY IS DIRECTED TO POST THE CASES IN DUE COURSE. 6. IN THE RESULT MA OF THE REVENUE IS TREATED AS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD SEPTEMBER 2010. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED: 3 RD SEPTEMBER 2010 MA NO. 270/MUM/2010 M/S. GODAVARI CORPN. P. LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) I MUMBAI 4. THE CIT I MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.