Income Tax Appellate Tribunal - Mumbai
Hindustan Aegis Lpg Bottling Co. Ltd., ... vs Department Of Income Tax on 26 March, 2012
IN THE INCOME TAX APPELL ATE TRIBUNAL
MUMBAI BENCHES, 'H', MUMBAI
BE FORE SHRI DINESH KUMAR AGARWAL (JM) AND B.RAMAKOTAIAH(A.M)
ITA No.3177/Mum/2011
(Assessment Year: 2007-08)
Joint Com missioner of M/s Hindu stan Aegis LPG
Income Tax, Bottling Co.Ltd.,
(OSD)-1(1), 4 t h Floor, Baldo ta Bhavan,
Room No.533 & 579, V/s 117 Maharsh i Karve Ro ad,
Aayakar Bhavan, Churchgate,
M K Road, Mumb ai-400020.
Mumbai-400020 PAN: AAACH1470Q
APPELLANT RESPONDENT
Date of Hearing : 26.3.2012
Date of Pronouncement : 11.4.2012
Appellant by : Shri Sanjiv Dutt
Respondent by : Ms.Soniya Vyas
O R D E R
PER DINESH KUMAR AGARWAL (JM) This appeal preferred by the Revenue is directed against the order dated 2.11.2010 passed by the ld. CIT(A), for the assessment year 2007-08.
2. Briefly stated facts of the case are that the assessee company is engaged in the business of distribution and throughput of LPG and propane. During the course of assessment proceedings, the AO noticed that the assessee ITA N o. 31 7 7/Mu m/2 01 1 2 (AY: 2007-08) has earned tax free dividend income of Rs.37,55,000/-. On being asked as to why disallowance u/s 14A of the Income Tax Act, 1961 (the Act) should not be made, the assessee explained that no expenditure has been incurred to earn this income. However, the AO did not accept the assessee's explanation. The AO in view of the decision of the Special Bench of the Tribunal in ITO V/s Daga Capital Management Pvt. Ltd. (2009) 312 ITR (AT) 1 (Mum) (SB) made a disallowance u/s 14A of the Act read with Rule 8D of the Income Tax Rules, 1962( the Rules) Rs.17,74,296/- as per working appearing at pages 2 and 3 of the assessment order. On appeal, the ld. CIT(A) following the decision of the Hon'ble Jurisdictional High Court in the case of Godrej & Boyce Ltd. Mfg. Co. V/s DCIT (2010) 328 ITR 81 (Bom), however, set aside the issue to the file of the AO with a direction to the AO to make disallowance in accordance with the decision of the Hon'ble Jurisdictional High Court (supra).
3. Being aggrieved by the order of the ld. CIT(A) the Revenue is in appeal before us taking following grounds :
"1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in rejecting the AO's working of expenses u/s 14A as per rule 8D by observing that jurisdictional High Court in the case of Godrej Boyce Mfg.Co. Ltd. has decided this issue that rule 8D will be applicable only from AY 2008-09 onwards.
ITA N o. 31 7 7/Mu m/2 01 1 3 (AY: 2007-08) 1.1 The decision of the Hon'ble High Court in the case of Godrej & Boyce has not been accepted & SLP has been filed against the said decision"
4. At the time of hearing, the ld. DR supports the order of the AO.
5. On the other hand, the assessee's Representative supports the order of the ld. CIT(A).
6. Having carefully heard the submissions of the rival parties and perusing the material available on record we find merit in the plea of the assessee. The question of making disallowance u/s 14A is no more res integra in view of the judgment of the Hon'ble Bombay High Court in Godrej & Boyce Ltd. Mfg. Co. (supra) holding that the provisions of section 14A are applicable in circumstances as are prevailing presently and the disallowance has to be worked out by the AO on some `reasonable basis' and not under rule 8D. Under such circumstances, we do not find any infirmity in the order of the Ld. CIT(A) in directing the AO to decide the quantum of disallowance, as per the afore-noted judgment, after allowing a reasonable opportunity of being heard to the assessee. The grounds taken by the Revenue are, therefore, rejected.
ITA N o. 31 7 7/Mu m/2 01 1 4 (AY: 2007-08)
7. In the result, Revenue's appeal stands dismissed. Order pronounced in the open court on 11th April, 2012.
sd sd
( B.RAMAKOTAIAH ) ( DINESH KUMAR AGARWAL)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, 11th April, 2012
SRL:
Copy to:
1. Appellant
2. Respondent
3. CIT Co ncerned
4. CIT(A) concerned
5. DR conce rned Bench
6. Guard file.
BY ORDER
true copy
ASSTT. REGISTRAR,
ITAT, MUMBAI