itxa-344-2013 IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 344 OF 2013 Commissioner of Income Tax 2 .. Appellant. V/s. Meditab Specialities Pvt. Ltd. .. Respondent. Mr. P. C. Chhotrary, for Appellant. Mr. Nitesh Joshi with Mr. Darshan Ashar i/b. Sanjay Udeshi & Co., for Respondent. CORAM: M.S.SANKLECHA, & G.S.KULKARNI, JJ. DATE : 10th FEBRUARY, 2015. P.C: This Appeal under Section 260 of Income Tax Act, 1961 (the Act), challenges order dated 20 th July, 2012 passed by Income Tax Appellate Tribunal (the Tribunal) for Assessment Year 2008 09. 2 Revenue has raised following questions of law for our consideration: (a) Whether on facts and in circumstances of case and in law, ITAT was correct in setting aside disallowance made u/s 14A r.w.r. 8D and directing A. O. for making reasonable disallowance u/s 14A of Act only on account of administrative cost in respect of dividend income of Rs.6,04,337/ thereby ignoring decision of Hon'ble High Court in t he case of Godrej & Boyce Mfg. Co. Ltd. v/s. DCIT (2010) 328 ITR 081 (Bom.), wherein it is held that Rule 8D is reasonable method for making disallowance u/s 14A and it is applicable for A. Y. 2008 09? S.R.JOSHI 1 of 3 ::: Uploaded on - 13/02/2015 ::: Downloaded on - 30/06/2020 15:19:52 ::: itxa-344-2013 (b) Whether on facts and in circumstances of case and in law, ITAT was correct in holding that disallowance u/s 14A cannot be made in respect of income of SEZ, stating that income of assessee from SEZ is eligible for deduction u/s 80IA/IB or u/s 10AA and both are deduction provisions, ignoring that assessee is not eligible for deduction 80IA/IB as assessee is not developer of SEZ and assessee is eligible for exemption u/s 10AA, which falls in Chapter III appearing in Act under head Incomes which do not form part of total income and therefore income of assesee from SEZ is exempt income? 3 Counsel for parties are agreed that impugned order of Tribunal on above two issues be set aside and matter be restored to Tribunal for fresh adjudication on both issues. 4 So far as Question (a) is concerned, Tribunal by impugned order restored issue of disallowance under Section 14 of Act on account of administrative costs incurred to earn exempt divided income to Assessing Officer. contention of Revenue is that in view of decision of this Court in Godrej & Boyce Manufacturing Co. Ltd. v/s. DCIT 328 ITR 81, Rule 8 D of Income Tax Rules (Rules) is to be applied and directions to adopt reasonable method of disallowance, is not correct. 5 Mr. Joshi, learned Counsel appearing for Respondent Assesee states that even if Rule 8 D of Rules is applied, tax effect would be very negligible. Therefore, he is instructed not to contest same. However, this concession on part of Respondent Assessee should not be held against him in any other proceedings. offer made by Mr. Joshi is reasonable. However, as we are remanding issue to Tribunal, it would be for Tribunal to consider same. S.R.JOSHI 2 of 3 ::: Uploaded on - 13/02/2015 ::: Downloaded on - 30/06/2020 15:19:52 ::: itxa-344-2013 6 So far as Question (b) is concerned, we find that impugned order of Tribunal on above issue has followed its order dated 8th June, 2012 in Respondent Assessee's own case for Assessment Year 2007 08. There has been no independent application of mind to this issue in impugned order. order of Tribunal for Assessment Year 2007 08 was subject matter of appeal by Revenue being Income Tax Appeal No.241 of 2013. In that appeal, this Court by its order dated 5th March, 2013 specifically clarified that observations made with regard to above issue be ignored as observations made with regard thereto were beyond scope of appeal before Tribunal. 7 In view of above, we set aside impugned order on both aforesaid questions and restore same to Tribunal to decide it afresh on merits, after considering rival submissions. All contentions left open. 8 Accordingly appeal disposed of with above observations. (G.S.KULKARNI,J.) (M.S.SANKLECHA,J.) S.R.JOSHI 3 of 3 ::: Uploaded on - 13/02/2015 ::: Downloaded on - 30/06/2020 15:19:52 ::: Commissioner of Income-tax 2 v. Meditab Specialities Pvt. Ltd