DCIT CEN CIR 1 (1)(4), MUMBAI vs. D.B. REALTY P.LTD, MUMBAI
What did the Tribunal hold?
The Tribunal confirmed the order of the CIT(A) which reduced the disallowance under Section 14A to 5% of fixed/semi-variable expenditure, following a previous decision for AY 2009-10.
What were the facts?
The Revenue appealed against disallowance under Section 14A. The assessee's appeal for one assessment year was withdrawn. The CIT(A) reduced the disallowance based on the nature of investments.
What were the issues?
The primary issue was the quantum of disallowance under Section 14A, specifically how to compute it when investments were strategic.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)& Sandeep Gosain (JM)
Heard together (3 matters)
Read from the judgment's own cause title. This page is filed under one of them.
O R D E R Per B.R. Baskaran (AM) :-
The appeal filed by the Revenue for A.Y. 2010-11 and cross appeals filed by the parties for A.Y. 2011-12 are directed against the orders passed by the learned CIT(A)-36, Mumbai.
2 M/s. D.B. Realty Pvt. Ltd. (Now DB Realty Ltd.) 2. At the time of hearing learned counsel appearing for the assessee submitted that the assessee is not interested in pursuing the appeal filed by the assessee for A.Y. 2011-12. Accordingly, the said appeal is dismissed as withdrawn.
Solitary issue urged in the appeal filed by the Revenue relates to disallowance made under section 14A of the Act. The Assessing Officer computed the disallowance in both the years u/r. 8D(2)(iii) of the I.T. Rules at 0.5% of average value of investment. The learned CIT(A) noticed that the assessee has made major portion of investments only in subsidiary companies, associates concerns and partnership firms, in which the assessee is a partner. Accordingly, the learned CIT(A) took the view that investments made by the assessee are in the form of strategic investments and accordingly directed the Assessing Officer to compute the disallowance at 5% of the fixed/semi variable expenditure incurred by the assessee.
At the time of hearing learned counsel submitted that the Assessing Officer had made identical disallowance in A.Y. 2009-10 also, which was reduced to 5% of the fixed/semi variable expenses by the order passed by the learned CIT(A). He submitted that the Revenue took the matter to the Tribunal and the Tribunal, vide its order dated 19.11.2014 passed in relating to A.Y. 2009-10, has confirmed the order passed by the learned CIT(A) and accordingly dismissed the appeal filed by the Revenue. Learned AR submitted that the learned CIT(A) has followed its own order passed in A.Y. 2009-10 in the years under consideration also.
Learned Departmental Representative did not controvert the factual aspects presented by learned AR.
In view of the above, consistent with the view taken by the coordinate Bench of the Tribunal in A.Y. 2009-10, we confirm the order passed by the learned CIT(A) in the years under consideration also.
3 M/s. D.B. Realty Pvt. Ltd. (Now DB Realty Ltd.) 7. In the result, appeal filed by the assessee and appeals filed by the Revenue are dismissed.
Order has been pronounced in the Court on 20.2.2017.
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- M/S American Express Bank Ltd., Mumbai vs The Jt DIT (It)1(1), MumbaiITA 9414/MUM/2004[2000-2001]Status: Disposed8 Oct 2026AY 2000-2001
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