ACIT 3(3)(2), MUMBAI vs. WHITE PEARLS HOTSL & INVESTMENT P.LTD, MUMBAI

The present Appeal filed by the revenue is against the order of Commissioner of Income Tax (Appeals)-8, Mumbai dated 29.04.16 for AY 2013-14.

As per the facts of the present case, the assessee is in the business of hospitality and renting out the properties on sublet basis. The return of income declaring total income of Rs. 2,31,40,440/- was filed on 24.09.13 and book profit u/s 115JB of the Act at Rs. 2,29,40,887/-. The case was selected for scrutiny and assessment u/s 143(3) of the Act was completed on 16.09.15 determining total income of Rs. 3,49,96,600/-. The AO worked out the disallowance as per the formula in rule 8D and made disallowance of Rs. 1,17,92,900/- u/s 14A r.w.r. 8D. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties allowed the appeal of the assessee and deleted the disallowance made u/s 14A r.w.r. 8D. Now before us, the revenue has preferred the appeal by raising the above grounds.

The sole ground raised by the revenue is against challenging the order of Ld. CIT(A) in deleting the disallowance u/s 14A r.w.r. 8D.

We have heard the counsels for both the parties and we have also perused the material placed on record as well as the orders passed by revenue authorities. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the revenue in para no. 5 of its order. The operative portion of the order of Ld. CIT(A) is contained in para no. 5.1.1 & 5.1.2 of its order and the same is reproduced below:- 5.1.1 This ground pertains to disallowance of Rs. 1,17,92,900/- made under section 14A r.w.r. 8D . I find the same issue had been decided by Hon'ble ITAT in appellant's favour for assessment years 2009-10 & 2010-11. This issue had also come up before me in the appellant's appeal for A.Y. 2012-13. I have decided this issue in favour of the appellant. 5.1.2 Since the facts and circumstances are same for this assessment year, except for the amount involved, following my decision for AY 2012-13 and also respectfully following the decision of Hon'ble ITAT Mumbai in the appellant's own case, disallowance made under section 14A read with Rule 8D in the White Pearls Hotsl & Investment Pvt. Ltd. instant year is deleted. This ground of appeal is allowed.