ACIT 3(2)(1), MUMBAI vs. MUKUND GLOBAL FINANCE LTD, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य, राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार /PER RAJENDRA, AM- अनुसार Challenging the order,dated 26/07/2016,of CIT(A)-8,Mumbai the assessee has filed the present appeal.Assessee-company,engaged in the business of providing loans and making investments,corporate finance and corporate advisory services,filed its return of income on 28/09/2011,declaring total Loss at Rs.74,34,897/-. The Assessing Officer (AO)completed the assessment u/s.143(3) of the Ac,determining the total income of the assessee at (-)Rs.28.08 lakhs. 2.First Ground of appeal

is about deleting the disallowance made,by the AO,u/s.14A r.w.r. 8D of Income tax Rules,196 (Rules).We find that identical issue was decided by the Tribunal on 22/8/2017,while deciding appeal for the AY.2013-14 (ITA/810/Mum/2017) and on 09/ 05/17(ITA/809/Mum/2017-AY.2012-13)in favour of the assessee and against the AO.We are reproducing the Grounds of appeal raised by the AO and the order of the Tribunal dt. 22/ 08/ 2017. “ 1…..The Revenue has raised the following grounds of appeal: "I. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) has erred in deleting the disallowance of Rs.42,15,838/- u/s.14A without appreciating the fact that the amount of disallowance u/s. I4A of the 1.T. Act, 1961 has to be computed as per Rule 8D of I.T.Rules, 1962 when the computation of the assessee was not found to be correct and as held in the order of the Hon'ble High Court in the ease of M/s, Godrej & Boycc Manufacturing Co. Ltd.

2. Whether on the facts and circumstances of the case and in law the Ld.ClT(A) has erred in deleting the disallowance u/s. 14A to the book profit u/s.l 15JB of the I. T. Act. 1961 ignoring the decisions of the Hon'hle ITAT, Mumbai in the case of M/s, Viraj Profiles Ltd. in dated 21/10/2015 - 46 1TR(T) 626 (Mumbai-Trib.) [2016] and in Ferani Hotels Pvt. Ltd. in ITA No.857/Mum/20l3 dated 17/11/2014.

6360/Mum/16-(12-13) Mukund Global Finance Ltd.

2.At the outset of the hearing, the ld. Authorized Representative (AR) of the assessee submits that the grounds of appeal raised by Revenue are covered by the decision of Tribunal in assessee's own case for AY 2012-13 in ITA No. 809/Mum/2017. The ld. Departmental Representative (DR) for the Revenue not disputed the decision of Tribunal in assessee's own case and fairly conceded that the issues covered in favour of assessee. 3.We have considered the rival submissions of the representative of the parties and have gone through the orders of authorities below. We have seen that in the assessment order for AY 2012-13, similar disallowance of Rs.42,15,838/- u/s 14A of the on appeal before the Id. CIT(A), the disallowance was restricted to Rs.73,479/-. And on the appeal of revenue before the ITAT, the order of Id. CIT(A) was upheld. The coordinate bench of the Tribunal passed the following order: "7. I have considered rival contentions and found that disallowance of interest was deleted by CIT(A) after recording a finding to the effect that assessee's funds in the form of share capital and reserves and surplus was Rs.39.32 crores which was more than the investment of Rs. 19.84 crores. With regard to the disallowance of other expenditure, the CIT(A) after relying on the decision of Hon'ble Bombay High Court and Mumbai Tribunal held that nothing was pointed out by the AO with regard to the correctness of the claim of assessee as regard to the expenditure in relation to exempt income. Accordingly, disallowance was restricted to Rs.73,479/-. Detailed finding recorded by CIT(A) are as per material on record which has not been controverted by the department. Accordingly I do not find any reason to interfere in the order of CIT(A)."

4. Considering the fact that fact of the AY under consideration is also similar. The assessee have earned the dividend income of Rs. 50J25A. The assessee has suo moto disavowed a sum of Rs.83,727/- u/s. 14A of the Act. The AO while passing the assessment order disallowed Rs. 46,96, J36A under section 14A. The ld. CIT(A) restricted the disallowance which was suo moto disallowed by the assessee. Thus, considering the fact that the identical grounds of appeal was decided by the Tribunal in .assessee's own case for AY 2012-13. Thus, we do not find any illegality or infirmity in the order passed by ld. CIT(A) in directing the AO to accept the suo moto disallowance u/s 14A of the Act for Rs. 83,272/-.

5. In the result, appeal of the Revenue is dismissed.” Respectfully,following the above order of the Tribunal ,we decide First Ground of appeal against the AO. 3.Second Ground of appeal is about deleting the disallowance made u/s.14A for MAT purposes.It was brought to our notice that the Special Bench of the Tribunal,in the case of Vireet Investment (P.) Ltd.(165ITD27),has decided that computation under cl.(f) of Explana - tion 1 to section 115JB(2)has to be made without resorting to the computation, as contemp - lated u/s.14A r.w.r.8D.Respectfully,following order of the Special Bench of the Tribunal (supra),we decide the second Ground against the AO. As a result, appeal filed by the AO stands dismissed. फलतः िनधा�रती अिधकारी �ारा दािखल क� गई अपील नामंजूर क� जाती है. Order pronounced in the open court on 3rd January, 2018. आदेश क� घोषणा खुले �यायालय म� �दनांक 03 जनवरी, 2018 को क� गई । Sd/- Sd/- (रिवश रिवश सूद सूद /Ravish Sood) (राजे�� / RAJENDRA) रिवश रिवश सूद सूद �याियक सद�य / JUDICIAL MEMBER लेखा लेखा सद�य सद�य / ACCOUNTANT MEMBER लेखा लेखा सद�य सद�य मुंबई Mumbai; �दनांक/Dated : 03 .01.2018. 2