Income Tax Appellate Tribunal - Mumbai
Dimension Data India Ltd ( Formelry ... vs Assessee on 29 April, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "D", MUMBAI
BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND
DR. S.T.M. PAVALAN, JUDICIAL MEMBER
ITA No. 225/Mum/2012
Assessment Year: 2007-08
Dimension Data India Ltd. ADDL CIT CIR2(1)
(Formerly Datacraft India Mumbai.
Ltd) 2nd Floor, Trade View
Building, Pandurang Bhudkar
Vs.
Marg, Kamala Mills
Compound, Lower Parel
Mumbai-. 400013
PAN :AAACD 2145 G
(Appellant) (Respondent)
Appellant by : Shri Manish Shah
Respondent by : Dr. Rajendra Kumar
Date of hearing : 29.04.2013
Date of Pronouncement : 17.05.2013
ORDER
PER DR. S.T.M. PAVALAN, JM:
This appeal filed by the Revenue is directed against the order of the Ld.CIT(A)-4, Mumbai dated 13.10.2011 for the Assessment Year 2007-08.
2. The Grounds of Appeal relate to the solitary issue of disallowance made by the AO under section 14A read with rule 8(D) and the same confirmed by the Ld.CIT(A).
3. Briefly stated assessee received dividend income of Rs.2,30,33,167/- and the same was claimed exempt from Income tax, whereas a disallowance equal to 2% of 2 ITA No. 225/Mum/2012 Dimension Data India Ltd.
Assessment Year 2007-08 .
the dividend income was offered under section 14A claiming that the AO in earlier year had disallowed 2% of the exempt income and therefore, the same had been offered in the year under consideration. However, in the assessment framed under section 143(3), the AO made a further disallowance of Rs.14,26,507/- and added the sum to the total income of the assessee. On appeal, the Ld.CIT(A) confirmed the impugned disallowance made by the AO. Aggrieved by the order, the assessee is in appeal before us.
4. We have heard the rival submissions and perused the relevant material on record. It is noted that 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. VS. DCIT [(2010) 328 ITR 81 (Bom)] 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 rule 8D in so far as the assessment years prior to 2008-09 are concerned. Presently we are dealing with the A.Y. 2007-08. In such year, obviously rule 8D cannot be applied, but the disallowance is required to be worked out on some reasonable basis. As the authorities below have computed the disallowable amount as per rule 8D, such computation cannot be upheld. Under such circumstances, we set aside the impugned order and restore the matter to the file of the AO for deciding the quantum of disallowance, as per the afore-noted judgment, after allowing a reasonable opportunity of being heard to the assessee.
5. In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on this 17th day of May, 2013.
Sd/- Sd/-
(P.M.JAGTAP) (Dr. S.T.M. PAVALAN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 17.05.2013.
*Srivastava
3 ITA No. 225/Mum/2012
Dimension Data India Ltd.
Assessment Year 2007-08
.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT(A) Concerned, Mumbai
The DR "D" Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.