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Fortune Capital Services 2nd Floor, K. K. Chambers, Sir P. T. Marg, Fort, Mumbai-400 001 Vs. Asst. CIT-12(1), Mumbai-400 001
November, 25th 2014

         ,                                    ,                                    

                     ./I.T.A. No.6280/Mum/2012
                    (   / Assessment Year: 2008-09)

Fortune Capital Services                          Asst. CIT-12(1),
2nd Floor, K. K. Chambers,               /        Mumbai-400 001
Sir P. T. Marg, Fort,                    Vs.
Mumbai-400 001
     . /  . /PAN/GIR No. AAAFF 6359 F
         ( /Appellant)                      :            (     / Respondent)

         / Appellant by                     :    None

           /Respondent by                   :    Shri Pavan Kumar Birla

                          /                 :    25.09.2014
                    Date of Hearing
                     Date of Order          :    24.11.2014

                                    / O R D E R
Per Sanjay Arora, A. M.:

       This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-23, Mumbai (`CIT(A)' for short) dated 30.08.2012, dismissing
the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961
(`the Act' hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated

2.     None appeared for and on behalf of the assessee-appellant when its appeal was
called out for hearing, nor any adjournment application stands received. There has been
no representation by or for and on behalf of the assessee even on the earlier occasions
                                                        ITA No.6280/Mum/2012 (A.Y. 2008-09)
                                                         Fortune Capital Services vs. Asst. CIT

when the appeal was posted for hearing. As observed vide order sheet entry dated
24.02.2014, the defect (in the appeal memo) has not been rectified. Under the
circumstances, including the issue as well as the sum under reference, it was considered
proper to proceed to decide the appeal after hearing the Revenue, the party before us.

3.    The appeal agitates a single issue, i.e., disallowance u/s.14A, effected at
Rs.31,108/-, since confirmed by the ld. CIT(A). While the Revenue's case is based on the
decisions by the larger bench of the Tribunal in the case of Cheminvest Ltd. v. ITO
[2009] 121 ITD 318 (Del-SB), so that no decision by its division bench, as in the case of
JNJ Holdings P. Ltd. vs. ACIT (in ITA No.3411/Mum/2009 dated 08.06.2012), would
hold. The assessee's objection for excluding the shares held as stock-in-trade in
reckoning the value of the investments, i.e., in computing the disallowance qua indirect
expenditure u/r.8D(2)(iii), stands negated on the basis of the decisions by the Special
Bench in the case of ITO vs. Daga Capital Management Pvt. Ltd. [2009] 312 ITR (AT) 1
(Mum.) (SB) and Jt. CIT vs. American Express Bank Ltd. [2012] 138 ITD 288 (Mum).
Aggrieved, the assessee is in second appeal.

4.    The only issue arising in this appeal, therefore, is whether the disallowance
u/s.14A would hold in respect of shares yielding dividend income, etc., i.e., income/s not
forming part of the total income, where the said shares are held as stock-in-trade of the
assessee's business. This issue has been the subject matter of contrary decisions by the
tribunal, particularly after the decision in the case of CCI Ltd. vs. Jt. CIT [2012] 20 196 (Kar)/[2012] 250 CTR 291 (Kar), being also relied upon by the
assessee. The tribunal per its larger bench decision in D. H. Securities (P.) Ltd. vs. Dy.
CIT [2014] 146 ITD 1 (Mum) (TM) has since, following the decision by the hon'ble
jurisdictional high court in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT [2010]
328 ITR 81 (Bom), confirmed that it would. The decision by it in Daga Capital
Management Pvt. Ltd. (supra), holding like-wise, would therefore continue to obtain,
while the decision in D. H. Securities (P.) Ltd. (supra) can only be considered as applying
Godrej & Boyce Mfg. Co. Ltd. (supra). Accordingly, s.14A would apply, and
                                                        ITA No.6280/Mum/2012 (A.Y. 2008-09)
                                                         Fortune Capital Services vs. Asst. CIT

disallowance there-under obtain, even where the shares are held as stock-in-trade,
notwithstanding the decision by the non-jurisdictional high court in CCI Ltd. (supra).
Reference for the purpose may also be made to the decision in the case of Dy. CIT vs.
Damani Estates & Finance (P.) Ltd. [2013] 25 ITR 683 (Mum)(Trib), which also bears
reference to the decision in Dhanuka & Sons vs. CIT [2011] 339 ITR 319 (Cal). We,
accordingly, find no infirmity in the orders of the authorities below, which stand upheld
in result. We decide accordingly.

5.      In the result, the assessee's appeal is dismissed.

     Order pronounced in the open court on September 25, 2014 at the conclusion of the

             Sd/-                                       Sd/-
       (Joginder Singh)                            (Sanjay Arora)
          / Judicial Member                          / Accountant Member
  Mumbai;  Dated : 24.11.2014

. ../Roshani, Sr. PS
         /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent
3.       () / The CIT(A)
4.        / CIT - concerned
5.                  ,     ,   / DR, ITAT, Mumbai
6.       / Guard File
                                                    / BY ORDER,

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