DCIT CEN CIR 7(1), MUMBAI vs. REKHA JHUNJHUNWALA, MUMBAI

These are the appeals filed by Revenue against the order of CIT(A)- 49, Mumbai dated 10/03/2016 for A.Y.2006-07 in the matter of order passed u/s.143(3) r.w.s.153A of the IT Act, 1961 2. The common ground taken by the Revenue in both the assessment years is as under:- 1). Whether on the facts and in the circumstances of the case and in law, the CIT(A), was justified in directing the AO to delete the disallowance u/s 14A of Rs.72,44,504/- made, relying on the decision of Bombay High Court in the case of All Cargo Logistics Ltd(374 ITR 645). without appreciating the fact that the decision of the High Court has not been accepted by the department and SLP has been filed and the same is pending.

Facts in brief are that assessee is earning income from business house property and capital gains. During the course of assessment, AO made disallowance u/s.14A in the assessment order framed u/s.143(3) r.w.s. 153A of the Act.

By the impugned order, CIT(A) deleted the addition after observing that interest free funds was available against the investment in shares and securities. Precise observation of CIT(A) was as under:-

At the outset, learned AR placed on record the order of the Tribunal in assessee’s own case for the A.Y.2008-09 wherein similar addition has 3823/Mum/2016 Smt. Rekha Jhunjhunwala been deleted by the CIT(A) was confirmed by the Tribunal after having following observation. “6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence in the present case has been sought to adjudicate as to whether the CIT(A) was right in law in deleting the disallowance of Rs.68,07,509/- made by the A.O under Sec. 14A by relying on the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. All Cargo Global Logistics Ltd. (2015) 374 ITR 645 (Bom), or not. We find that it remains as a matter of a conceded fact that during the course of the search and seizure action conducted on the assessee on 29.08.2011, no material whatsoever was found as regards the disallowance under Sec.l4A. We find that the Hon'ble High Court of Bombay in the case of CIT Vs. All Cargo Global Logistics Ltd. (2015) 374 ITR 645 (Bom) had upheld the order of the special bench of the Tribunal, wherein it was observed that in the absence of incriminating material seized during the course of the search and seizure proceedings conducted under Sec. 132 of the Act, no addition in respect of an unabated assessment could be made. We are of the considered view that as the CIT(A) in the present case going by the rule of judicial discipline had followed the judgment of the Hon'ble High Court of Bombay in the case of All Cargo Global Logistics Ltd. (supra), therefore, no infirmity emerges from his order. We are of I the considered view that though the revenue had not accepted the aforesaid order of the Hon'ble High Court of Bombay and had filed a SLP against the same, however, as the order of the Hon'ble High Court i had not been stayed by the Hon'ble Supreme Court, therefore, the same holds the ground as on date. We thus finding ourselves to be in agreement with the view taken by the CIT(A) and finding no reason to dislodge the same, therefore, uphold his order.

The appeal filed by the revenue is dismissed. 7. As the facts and circumstances during the year under consideration are exactly same, wherein in the search assessment addition made u/s.14A was deleted by the CIT(A) and the Tribunal after relying on the decision of the Bombay High Court in case of All Cargo Global Logistics Ltd., confirmed the action of CIT(A) for such deletion. Respectfully