FORTUNE EQUITY BROKERS (I) LTD,MUMBAI vs. DCIT RG 4(1), MUMBAI

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ITA 157/MUM/2013Status: DisposedITAT Mumbai08 December 2015AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that appellate authorities are empowered to consider a valid revised computation of income, following the jurisdictional High Court's decision. The issue was restored to the AO for fresh adjudication.

What were the facts?

The assessee, engaged in share and stock broking, filed a revised computation of income during scrutiny assessment, reducing the disallowance under Section 14A. The Assessing Officer (AO) rejected this revised computation, citing a Supreme Court decision.

What were the issues?

Whether the AO and CIT(A) erred in not accepting the assessee's revised computation of income filed during scrutiny assessment, and if appellate authorities can consider such revised computations.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI N.K. BILLAIYA & SHRI PAWAN SINGH

Hearing: 08.12.2015Pronounced: 08.12.2015

O R D E R PER N.K. BILLAIYA, AM: With this appeal the assessee has challenged the correctness of the order of the Ld. CIT(A)-8, Mumbai dated 2.11.2012 pertaining to Assessment year 2009-10.

2.

The grievance of the assessee relates to the disallowance of Rs. 45,10,958/- u/s. 14A of the Act.

3.

In continuation to this grievance, the assessee has moved an application for the admission of additional ground claiming that the AO erred and the Ld. CIT(A) further erred in not accepting the revised computation of income filed by the assessee. The assessee is in the business of share and stock broking. The return was selected for scrutiny assessment.

4.

During the course of the scrutiny assessment proceedings, the assessee filed a revised computation of income determining total income at Rs. 16,21,780/-. In this revised computation of income, the assessee has revised the disallowance u/s. 14A r.w. Rule 8D to Rs. 1,70,054/- as against Rs. 45,10,958/- disallowed in the original computation of income. This claim of the assessee was denied by AO who drew support from the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd Vs CIT 284 ITR 323 (SC).

5.

The assessee carried the matter before the Ld. CIT(A) but without any success.

6.

Before us, the Ld. Counsel for the assessee vehemently submitted that the decision of the Hon’ble Supreme Court does not fetter the powers of the Appellate authority to consider a valid revised computation of income.

7.

We have given a thoughtful consideration to the contention of the Ld. Counsel qua the additional ground qua the decision of the Hon’ble Supreme Court (supra). It is indeed true that the decision of the Hon’ble Supreme Court does not fetter the powers of the Appellate authorities. Our view is also fortified by the decision of the Hon’ble Jurisdictional High Court in the case of CIT Vs Pruthvi Brokers And Shareholders Pvt. Ltd., 349 ITR 336. Respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court (supra), we restore this issue to the file of the AO. The AO is directed to decide the issue afresh in the light of the revised computation of income filed by the assessee. Needless to mention, the AO shall give reasonable opportunity of being heard to the assessee.

8.

In the result, the appeal filed by the assessee is treated as allowed for statistical purpose. Order pronounced in the open court at the time of hearing on 8th December, 2015

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