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अिधकरण, ‘जे’ खंडपीठ आयकर अपीलीय अपीलीय अिधकरण खंडपीठ मुंबई मुंबई आयकर आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण खंडपीठ खंडपीठ मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “J” BENCH सव"ी राजे"", लेखा सद"य एवं राम लाल नेगी, "याियक सद"य Before S/Sh. Rajendra,Accountant Member & Ram Lal Negi,Judicial Member आयकर आयकर अपील अपील संसंसंसं/./././.ITA No.1977/Mum/2011,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2005-06 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Archway Investment Company Ltd. Income tax Officer-2(1)(1) Neville House, J.N. Heredia Marg, Aayakar Bhavan Ballard Estate,Mumbai-400 001. Vs Mumbai. PAN:AAACA 5507 H (अपीलाथ" /Appellant) (""यथ" / Respondent) िनधा"रती िनधा"रती ओर ओर सेसेसेसे/Assessee by : Shri Yogesh Thar िनधा"रती िनधा"रती ओर ओर राज"व क" ओर से/ Revenue by : Ms. Lata Sunder-DR सुनवाई सुनवाई क" क" तारीख तारीख / Date of Hearing : 19.01.2016 सुनवाई सुनवाई क" क" तारीख तारीख घोषणा क" तारीख / Date of Pronouncement : 29.01.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 1961 1961 क" 1961 क" धारा धारा 254 254 254(1)केकेकेके अ"तग"त 254 अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order dt.27.10.2009 of CIT-4, Mumbai, the assessee has filed the present appeal. There was delay of 430 days in filing the appeal.The director of the company, S. Raja had filed an application along with an affidavit in that regard.It was stated that the order of the First Appellate authority (FAA) was received by one of the employees, that he did hand over the relevant papers to the tax consultant looking after tax litigation, that later on the tax advisor learnt about the disposal of the appeal by the FAA,that immediately an appeal was preferred before the Tribunal.We find that Assessing Officer (AO) was directed to file a report in this regard.Vide his letter dated 3.12.15,the AO has informed that he had recorded the statement of Ramesh Jain, the tax consultant and Shri Praful Wadiwala-the person who had received the order of the FAA, that he has stated that the reasons mentioned by the assessee for filing related appeal were genuine.We have gone through the statements of the above mentioned persons and the affidavit filed by the director of the company. In our opinion, there was reasonable cause for not filing the appeal on time. Therefore, delay,in preferring the appeal,is condoned.
The assessee company,engaged in the business of investment,filed its return of income on 28. 10.05,declaring total income of Rs.15.87lakhs. Later on, a revised return was filed on 27.12.2005 for loss of Rs.2.12 lakhs. The AO completed the assessment u/s. 143(3) of the Act on 28. 12. 2007,determining the income of the assessee at Rs.27,75,130/-. 2.Effective Ground of appeal is about disallowance made by the AO and enhanced by the FAA for the year under consideration. During the assessment proceedings,the AO made disallowance of Rs.29,87,636/- u/s. 14A, that the assessee had earned dividend income of Rs.50.98 lakhs and had claimed exemption u/s.10(34) of the Act,that it had not disallowed any expenditure for earning the income. Accordingly, he made a disallowance of Rs. 28.87 lakhs.
ITA/1977/M/11,AY.05-06-Archway Investment
Aggrieved by the order of the AO,the assessee preferred an appeal before the FAA.After considering the submission of the assessee and the assessment order, the FAA referred to the case of Daga Capital Management delivered by the Tribunal and dismissed the appeal filed by the assessee. He also held that provisions of Rule 8D of I.T.Rules (1962) were applicable and disallowance had to be made accordingly.
Before us, the Authorised Representative(AR)stated that the decision of Daga Capital Manage -ment(supra),had been reversed by the judgment of Godrej and Boyce (328 ITR 81), that provisions of Rule 8D were not applicable for the AY 2005-06.He referred to the case of Godrej Agrovet Ltd.(Income Tax Appeal No.934 of 2011 dt.8.11.2013) .He also relied upon the cases of Smt. Bindu C. Zaveri (ITA No./7771/M/2011-AY07-08, dt.8.4.15 and Mahanager Gas Ltd. ITA No./958, 402/Mum/2011 dated 11.12.2013. Departmental Representative (DR) stated that the issue should be decided on merits.
We have heard the rival submissions and perused the material before us.We find that the AO had made disallowance of Rs.29.87 lakhs invoking the provisions of section 14A of the Act, that the FAA had enhanced the disallowance to Rs.63.63 lakhs as per the provisions of Rule 8D of the Rules.As per the Hon’ble Bombay High Court Rule 8D cannot be applied for the year under appeal.The FAA had relied upon the order of Daga Capital and Management (supra).But,the above decision stands reversed by the judgment of the Hon’ble juri ictional High Court in the matter of Godrej Boyce.We find that the Hon’ble Court has in the case of Godrej Agrovet Ltd.(supra)has laid down certain guidelines with regard to disallowance to be made u/s.14A of the Act r.w.rule 8D.In our opinion,in the interest of justice the matter should be restored back to the file of the AO for fresh adjudication.He is directed to decide the issue after affording a reasonable opportunity of hearing to the assessee and after the considering the cases relied upon by the AR before us,including the matter of Godrej Agrovet Ltd.(supra).Effective ground of appeal is decided in favour of the assessee,in part. As a result,appeal filed by the assessee stands partly allowed. फलतः िनधा"रती "ारा दािखल क" गई अपील अंशतः मंजूर क" जाती है. Order pronounced in the open court on January, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक जनवरी, 2016 को क" गई । (राम लाल नेगी /Ram Lal Negi) (राजे"" / RAJENDRA) "याियक सद"य / JUDICIAL MEMBER लेखा लेखा सद"य सद"य / ACCOUNTANT MEMBER लेखा लेखा सद"य सद"य मुंबई/Mumbai,"दनांक/Date: 29.01. 2016 व.िन.स.Jv.Sr.PS. 2
ITA/1977/M/11,AY.05-06-Archway Investment
आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत 1.Appellant /अपीलाथ"
Respondent /""यथ" 3.The concerned CIT(A)/संब" अपीलीय आयकर आयु , 4.The concerned CIT /संब" आयकर आयु 5.DR A Bench, ITAT, Mumbai /िवभागीय "ितिनिध, ए खंडपीठ,आ.अ."याया.मुंबई 6.Guard File/गाड" फाईल स"यािपत "ित //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst.