IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES `E' MUMBAI
BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND
SHRI R.C.SHARMA, ACCOUNTANT MEMBER
. / ITA Nos.5414 & 5415/MUM/2013
[ [ /Assessment Year: 2005-06
M/s Express Global Logistics Asst. Commissioner of
Pvt. Ltd. Income Tax-(2) I,
Formerly M/s Express Mumbai
Vs.
Transport Pvt. Ltd.
17, Western India House,
2nd Floor, Sir P.M. Road,
Mumbai-400001
([ /Assessee) ( /Revenue)
P.A. NUMBER : AAACE2632F
[ / Assessee by: Shri Vijay Mehta
/Revenue by Shri Sachidanand Dube
/ 17/12/2014
Date of Hearing :
/ 01/01/2015
Date of Pronouncement :
ORDER
PER JOGINDER SINGH, JM:
The assessee is aggrieved by the impugned order dated
27/05/2013 of the ld. First Appellate Authority, Mumbai.
A. The assessee has raised the following grounds in ITA
No.5414/Mum/2013.
2 M/s Express Global Logistics Pvt. Ltd.
1. Being aggrieved by the order u/ s 154 of the IT Act, 1961
passed by CIT (A) 4, Mumbai dated 27th May, 2013 received
by us on 11th June, 2013, this appeal petition is submitted on
the following amongst other grounds of appeal, which, it is
prayed be considered without prejudice to each other:
Ground 1: Unjust, Unfair and Unlawful affirmation of addition
of Rs. 5,88,669/- under section14A
a. The learned Commissioner of Income Tax (Appeals) has
grossly failed in not comprehending the mistake loud and
apparent in the order dated 27th May, 2013 wherein he gave
directions to make disallowance as per Rule 8D.
b. The learned Commissioner of Income Tax (Appeals) grossly
failed to comprehend that the Honorable Bombay High Court
in the case of Godrej & Boyce Mfg Co. Ltd vs CIT 328 ITR 81
dated 12th August, 2010 stated that Rule 8D is prospective
and cannot be applied to A.Y 2005-2006.
c. It is submitted that his direction that disallowance
computed as per Rule 8D has been found reasonable is a
summary, unjust, unfair and unlawful conclusion totally
ignoring the facts of the case.
d. We humbly seek that the 15% disallowance of Rs.
96,269/- on the exempt income of Rs.6,41,795/ - earned in
the form of Dividends from Mutual Funds and Shares as
made by the Assessing Officer should be reduced to 10% i.e
Rs. 64,180/-.
B. The Assessee has raised the following grounds in ITA
No.5415/Mu/2013 u/s 250(6) of the Income Tax Act, 1961:
1. Being aggrieved by the order u/ s 250(6) of the I T Act, 1961
passed by CIT (A) 4, Mumbai dated 27th May, 2013 received
by us on 11th June, 2013, this appeal petition is submitted on
the following amongst other grounds of appeal, which, it is
prayed be considered without prejudice to each other:
3 M/s Express Global Logistics Pvt. Ltd.
Ground 1: Unjust, Unfair and Unlawful affirmation of addition
of Rs. 5,88,669/- under section14A
a. The learned Commissioner of Income Tax (Appeals)-4 has
grossly erred in not comprehending the error committed by
the Assessing Officer while passing order dated 11th April,
2012 to give effect to the CIT(A) Appellate Order dated 26th
November, 2008 of applying Rule 8D to A.Y. 2005-06 ignoring
decision of the honorable Jurisdictional High court namely
Bombay High court in the case of Godrej & Boyce Mfg Co. Ltd.
vs CIT 328 ITR 81 dated 12th August, 2010 wherein it was
held that Rule 8D was not retrospective and is prospective
from A.Y. 2008-09 onwards.
b. The learned Commissioner of Income Tax (Appeals) has
totally ignored the facts already on record vide assessee's
letter dated 15th October, 2007 and 29th November, 2007
wherein the assessee had submitted with circumstantial
evidence and reasons that no interest or expense had been
incurred for earning the exempt income. He summarily in an
unjust, unfair and unlawful manner concluded that "in my
opinion, the disallowance computed under Rule 8D is most
reasonable in this case and, the disallowance is confirmed".
c. We humbly seek that the 15% disallowance of Rs. 96,269/-
on the exempt income of Rs.6,41,795/ - earned in the form of
Dividends from Mutual Funds and Shares as made by the
Assessing Officer should be reduced to 10% i.e Rs. 64,180/-.
2. First, we shall take up the appeal in ITA
No.5414/Mum/2013. At the time of hearing, Shri Vijay Mehta, ld.
counsel for the assessee, contended that application u/s154 of the
Act was filed by the assessee and the decision in the case of
Goderez Boyce from Hon'ble Jurisdictional High Court came later.
It was pleaded by the ld. counsel that the issue may be restored to
the file of the ld. Commissioner of Income tax (Appeals). On the
4 M/s Express Global Logistics Pvt. Ltd.
other hand, the ld. counsel for the Revenue, Shri Sachidanand
Dubey, though defended the conclusion arrived at by the ld.
Commissioner of Income tax (Appeals), but had no objection if the
file is sent back to the ld. Commissioner of Income tax (Appeals).
2.1. Now, we shall deal with the order of the ld. Commissioner of
Income tax (Appeals) confirming the disallowance made by the
Assessing Officer u/s 14A r.w. Rule 8D of the Rules. On
consideration of the rival submissions and perusal of the material
available on record, the facts, in brief, are that the assessee is a
private limited company, engaged in the business of logistics
advisor and service provisions. The assessee rendered services to
its clients and was required to disburse freight, customs duty, port
charges, CFS charges, for and on behalf of its clients to various
service providers. The claim of the assessee is that on various
occasions such payments were paid to such service providers in
anticipation. Before us, it was claimed that necessary details of
investments made during assessment year 2005-06 alongwith its
source were furnished before the Assessing Officer vide letter
dated 15/10/2007. Plea was also raised that vide letter dated
29/11/2007, the details of deployment of funds for earning
dividend income were also furnished before the Assessing Officer
for which our attention was invited to various pages of assessment
order. The crux of the argument is that the assessment order was
framed u/s 143(3) of the Act working out the disallowance at 15%
of the dividend income on estimated basis and thus addition was
made. It is further seen that the ld. Commissioner of Income tax
5 M/s Express Global Logistics Pvt. Ltd.
(Appeals) passed the impugned order applying Rule 8D for the
purposes of disallowance u/s 14A of the Act considering the
decision in ITO vs Daga Capital Management Pvt. Ltd. & Ors. (ITA
No.8057/Mum/2003) order dated 20th October, 2008. The
assessee filed application for rectification u/s 154 dated
16/05/2012 before the ld. Commissioner of Income tax (Appeals)
making rectification in the order dated 26/11/2008 for
consideration of the decision dated 12/08/2010 from Hon'ble
Jurisdictional High Court in Godrej & Boyce Manufacturing Comp.
Ltd. (328 ITR 81) wherein it was held that Rule 8D is prospective
with effect from assessment year 2008-09. In view of these facts,
we are of the view that the whole issue needs afresh adjudication,
in the light of the aforesaid decision from Hon'ble jurisdictional
High Court, by the ld. First Appellate Authority. The assessee be
given opportunity of being heard with further liberty to furnish
evidence, if any, in support of its claim/contention. The ld.
Commissioner of Income tax (Appeals) is directed to examine the
claim of the assessee in accordance with law and the relevant case
laws, more specifically, from Hon'ble jurisdictional High Court.
Thus, the appeal of the assessee is allowed for statistical purposes
only. Since, on merits, we have sent back the appeal to the file of
the ld. Commissioner of Income tax (Appeals) for fresh
adjudication in terms discussed hereinabove, therefore, ITA
No.5415/Mum/2013, as agreed from both sides, will not survive.
6 M/s Express Global Logistics Pvt. Ltd.
Finally, the appeals of the assessee u/s.154 of the Act is
dismissed, whereas, the appeal on merits u/s 143(3) of the Act is
allowed for statistical purposes.
This order was pronounced in the open court in the
presence of ld. Representatives from both sides at the
conclusion of the hearing on 17/12/2014.
Sd/- Sd/-
(R.C.SHARMA) (JOGINDER SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED - 01/01/2015
f{x~{tÜ? P.S/...
/Copy of the Order forwarded to :
1. / The Appellant
2. × / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , , / DR, ITAT, Mumbai
6. [ / Guard file.
/ BY ORDER,
× //True Copy//
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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