DCIT 2(1)(1), MUMBAI vs. DSP INVESTMENT P.LTD, MUMBAI

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ITA 2566/MUM/2017Status: DisposedITAT Mumbai13 August 2018AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the facts and circumstances were similar to previous assessment years where the Tribunal had restricted the proportionate disallowance under Rule 8D(2)(iii), there was no reason to interfere with the CIT(A)'s order.

What were the facts?

The Revenue appealed against the CIT(A)'s order which restricted a disallowance made under Section 14A read with Rule 8D. The Assessing Officer had disallowed Rs. 1,59,19,891, while the CIT(A) restricted it to Rs. 73,95,520 under Rule 8D(2)(iii) and Rs. 143,046 under Rule 8D(2)(i).

What were the issues?

The key issue was whether the CIT(A) was justified in restricting the disallowance made under Section 14A read with Rule 8D, following the precedent set by the Tribunal in the assessee's own case for earlier years.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM

For Appellant: Shri Madhur Agarwal
For Respondent: Shri H N Singh, Shri Madhur Agarwal
Hearing: 08/08/2018Pronounced: 13/08/2018

आदेश / O R D E R PER R.C.SHARMA (A.M):

1.

This is an appeal filed by the Revenue against the order of CIT(A)- 3, Mumbai dated 18/01/2017 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the IT Act.

2.

In this appeal, Revenue is aggrieved for deleting the part of the disallowance made u/s.14A r.w.r. 8D of the IT Act.

3.

Rival contentions have been heard and record perused.

4.

The brief facts of the case are that the assessee e-filed its return of income on 28/09/2012 declaring a total income of Rs.4,65,77,29O/- under M/s. DSP Investment Pvt. Ltd., normal provisions and Rs.13,22,33,298/- u/s.115JB. The case was selected for scrutiny. Notice u/s 143(2) dated 14/08/2013 was issued and served on the assessee. Subsequently, notice u/s 142(1) was issued and served upon the assessee by the Assessing Officer. The assessee company is engaged in the business of investment. The assessee company is non-banking finance company registered with the Reserve Bank of India. The Assessing Officer while passing the assessment order, an amount of Rs.1,59,19,891/- in respect of disallowance u/s 14A was added to the total income of the appellant. The total income of the appellant was calculated at Rs.6,24,97,180/- 5. By the impugned order CIT(A) restricted the disallowance to the extent of Rs.73,95,520/- under Rule 8D2(iii) and Rs.143,046/- under Rule 8D2(i) after following the order of the Tribunal in assessee’s own case for the A.Y.2008-09, 2009-10 and 2010-11. Precise observation of CIT(A) was as under:-

6.2 The similar issue reached up to the ITAT Mumbai for AY 2008-09 ™ 2009-10 in ITA No. 6776/Mum/2012, 2010-11 in ITA No. 7i37/Mum/20i3 and 2011-12 in ITA No. 5468/Mum/2oi4, wherein the Hon'ble ITAT has held that – "g. The facts of the assessee case being materially same to decision of the tribunal in the case of sister concern, we respectfully following the order of Co-ordinate Bench of the Tribunal set aside the order of the CIT(A) by restricting the disallowance u/s 14A read with rule 8D to Rs. 9,00,9077- as voluntarily made by the assessee and according the appeal of the assessee is disallowed.

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