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Polyfibre Industries P. Ltd., 82, Maker Chambers, III Nariman Point, Mumbai-400 021. Vs. DCIT Circle (32), Aayakar Bhavan, Mumbai 400 020.
August, 28th 2014

            ./I.T.A. No.7567/M/2012 (AY:2009-2010)
Polyfibre Industries P. Ltd.,   / DCIT Circle (32),
82, Maker Chambers , III            Aayakar Bhavan,
Nariman Point, Mumbai -400 021.     Mumbai ­ 400 020.
   ./ PAN : AAACP9550B
( /Appellant)                                  ..      ( / Respondent)

         / Appellant by                    :    Shri Vijay Mehta & Mr. Anuj
        / Respondent by                    :    Shri R.A. Pant, DR

        / Date of Hearing                            :5.8.2014
        /Date of Pronouncement 27 .8.2014

                                     / O R D E R


       This appeal filed by the assessee on 21.12.2012 is against the order of the
CIT (A)-4, Mumbai dated 17.10.2012 for the assessment year 2009-2010.

2.     In this appeal, assessee raised the following grounds which read as under:

       "1.   The order passed by the Ld CIT (A) is illegal, bad in law, ultra vires and
             contrary to the provisions of law and facts of the case and without
             appreciating the facts of the case in their perspective.
       2.    On the facts and circumstances of the case, the Ld CIT (A) erred in
             confirming the disallowance to the extent of Rs. 14,41,489/- out of Rs.
             37,71,061/- disallowed by the Assessing Officer u/s 14A read with Rule
       3.    It is therefore prayed that the order of the Ld CIT (A) be cancelled and
             direction be issued to allow the appeal on the grounds raised before him.
       4.    Each one of the above grounds of appeal is without prejudice to the other."

3.     During the proceedings before us, Shri Vijay Mehta & Mr. Anuj Kishnadwala,
Ld Counsels for the assessee filed a copy of the order of the Tribunal in the case of
its sister concern namely M/s. Jubliant Enterprises Pvt Ltd vide ITA No.6364/M/2012
(AY 2008-2009) dated 12.3.2014 , and demonstrated that the facts are identical with
that of the assessee.     Further, he mentioned that the assessee earned exempt
income and in both the cases Rs. 25,000/- was quantified as relatable expenditure
incurred for earning of the said exempt income. The Tribunal, on appreciation of
the facts mentioned that the disallowance should be made on ,,proportionate basis
and not the amount of Rs. 25,000/- as done by the assessee.              Considering the
commonality of the facts between the cases, Ld Counsel mentioned that the issue
needs to be decided in the same lines of the said order of the Tribunal dated
12.3.2014 (supra).

4.     On the other hand, Ld DR relied on the orders of the Revenue Authorities

5.     We have heard both the parties and perused the orders of the Revenue
Authorities as well as the cited order of the Tribunal in the case of M/s. Jubliant
Enterprises Pvt Ltd (supra).   On hearing both the parties, we find merit in the
argument of the assessees Counsel. Accordingly, we direct the AO to apply the
same ratio of the Tribunals order dated 12.3.2014 (supra) after considering the
calculations provided by the assessee on the proportionate disallowance u/s 14A of
the Act. As per the assessee, on that basis, Rs. 71,145/- is the reasonable figure in
place of Rs. 25,000/- which was quantified by the assessee in the return of income.
AO may consider the said calculations after due verification and applying the said
order of the Tribunal (supra). Accordingly, ground no.2 raised by the assessee is
decided in the above mentioned manner.

6.     Considering the general and consequential nature of the grounds, ground
no.1, 3 and 4 need no specific adjudication.      Therefore, the said grounds are
dismissed as general or consequential.

7.     In the result, appeal of the assessee is partly allowed.

       Order pronounced in the open court on 27th August, 2014.

             Sd/-                                                 Sd/-

(AMIT SHUKLA)                               (D. KARUNAKARA RAO )
  / JUDICIAL MEMBER                          / ACCOUNTANT MEMBER
 Mumbai;             27/08/2014
.../ OKK , Sr. PS
    /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.

                         //True Copy//
                                    / BY ORDER,

                              /  (Dy./Asstt. Registrar)
                            ,  / ITAT, Mumbai
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