IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI Before Shri Rajesh Kumar, Accountant Member & Shri Ram Lal Negi, Judicial Member ITA No.5068/Mum/2018 Assessment Year : 2015-16 DCIT Central Circle 6(4), M/s. J M Bakshi & Co. Mumbai Vs. 16, N G N Vaidya Marg (Bank Street), Fort, Mumbai 400 001. PAN : AAAFJ5198J (Appellant) (Respondent) Appellant By : Shri Rajeev Gubgotra Respondent By : Shri Y P Trivedi & Shri Nitant Garodia Date of Hearing :07.08.2019 Date of Pronouncement : 22.08.2019 ORDER Per Rajesh Kumar, Accountant Member captioned appeal filed by Revenue pertaining to A.Y. 2015-16 is directed against order passed by CIT(A)-54, Mumbai, dated 12.06.2018 which in turn arises out of order passed by Assessing Officer under Section 143(3) of Income Tax Act, 1961 (hereinafter "the Act"). 2. issue raised in Ground of Appeal No.1 is against deletion of addition of ` 77,73,133/- by CIT(A) as made by AO towards payments made to port employees and other miscellaneous payments not sanctioned as per law of land. facts in brief are that during course of 2 ITA No. 5068/Mum/2018 M/s. J M Bakshi & Co. assessment proceedings AO found that assessee collects service charge and fees from its clients and portion of same was spent for making payment to port employees and other miscellaneous payments, which are illegal expenses and opposed to public policy and not sanctioned as per law of land. According to AO these expenses like paying speed money for getting speedier disposal of assignments were opposed to public policy and are illegal. These amounts are neither credited nor debited to Profit and Loss Account, but routed through balance sheet. He further observed that though assessee, in return of income filed on 25.11.2015, suo motu disallowed sum of ` 25,91,044/- being 25% of ` 1,03,64,177/- on account of sundry expenses, added same to income filed u/s. 139(1) of Act. AO by holding that there is no provision under Act to partially allow any expenditure, which are incurred in connection with activities prohibited under law. Accordingly, he disallowed and added ` 77,73,133/- to income of assessee. 3. At outset, learned AR submitted that issue is covered in favour of assessee by order of co-ordinate Bench in assessee s own case for A.Y. 2007-08, which has been followed by CIT(A) for year under consideration while allowing appeal of assessee on this issue. learned AR prayed before Bench that since issue has been decided in favour of assessee ground raised by Revenue be dismissed. 3 ITA No. 5068/Mum/2018 M/s. J M Bakshi & Co. learned DR fairly agreed that issue is covered in favour of assessee by order of Tribunal for A.Y. 2007-08. 4. After hearing both parties, we observe that identical issue has been decided in favour of assessee in its own case for A.Y. 2007-08. Respectfully, following said decision of co-ordinate Bench, we do not find any reason to interfere with order of CIT(A). It is accordingly upheld and ground raised by Revenue is dismissed. 5. Ground no.2 is against deletion of disallowance of Rs 1,25,625/- u/s. 14A, ignoring provisions of section 14A read with Rule 8D of Income tax Act. learned AR submitted that during year there is no exempt income as is apparent from 5.1 of assessment order, wherein AO has given finding that investments by assessee did not fetch any income during year. learned AR submitted that in view of decision of Hon ble Bombay High Court in case of PCIT vs. Ballarpur Industries Limited, wherein no disallowance has been made u/s. 14A Rule 8D, where there is no exempt income. learned DR, on other hand, relied on assessment order and ground raised in Memorandum of appeals. 6. After hearing both parties, we observe that during year assessee has not earned any exempt income and, therefore, there is no question of disallowance u/s. 14A Rule 8D. We do not find any reason to interfere with finding of learned CIT(A), who has followed judgment 4 ITA No. 5068/Mum/2018 M/s. J M Bakshi & Co. of Hon ble Delhi High Court in case of Cheminvest Ltd. vs. Income Tax Officer 378 ITR 33. Hon ble Jurisdictional High Court in case of PCIT vs. Ballarpur Industries Ltd. (supra), has also held that no disallowance u/s. 14A Rule 8D has to be made when there is no exempt income. Accordingly, we uphold order of learned CIT(A) and dismiss ground raised by Revenue. 6. In result, Revenue s appeal is dismissed. Order pronounced in open court on this day of 22nd August, 2019. Sd/- Sd/- (Ram Lal Negi) (Rajesh Kumar) Judicial Member Accountant Member Mumbai, Dated: 22nd August, 2019 SA Copy of Order forwarded to : 1. Appellant. 2. Respondent. 3. CIT(A), Mumbai. 4. CIT 5. DR, F Bench, ITAT, Mumbai BY ORDER, True Copy (Assistant Registrar) Income Tax Appellate Tribunal, Mumbai DCIT, Central Circle 6(4), Mumbai v. J M Bakshi & Co