RAJASTHAN MARUDHARA GRAMIN BANK ,JODHPUR vs. ACIT, CIRCLE-3, JODHPUR

ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) NFAC, Delhi, [in brevity the ‘CIT (A)’], order passed u/s 250 of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2015-16. The impugned order was emanated from the order of the ld. Asstt. Commissioner of Income Tax, Circle-3, Jodhpur,[in brevity ‘the AO’] order passed u/s 143(3)/147of the Act. 2. The assessee has taken the following ground:

“1.a. That in the facts and circumstances of the case and in view of the detailed submissions made on facts of the case as well as on legal issues involved in this case, the Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter the ld. CIT(A)] seriously erred in law and facts in maintaining disallowance of Rs. 89,18,157/- made by the ld. A.O comprising direct expenses of 81,68,157/- at Sr. No. 2 and indirect expenses at Sr. No. 3 of Rs. 7,50,000/- out of interest expenses as per table in Pg. No. 5 & 6 of the asst. order and was disputed in appeal before him. b. The Ld. CIT(A) ought not to have maintained the said disallowance of Rs.89,18,157/- c. The Hon'ble ITAT may very kindly delete the same. 2. a. That in the facts and circumstances of the case the ld. CIT(A) has erred in law and facts in maintaining the working of the ld. A.O of disallowed sum of Rs. 89,18,157/- u/s 14A of the Act r.w. Rule 8D of the Rules as against (0) Zero disallowance worked out by the appellant because factually no direct expenses of interest was attributable to the investment made in securities, yielding exempted income not includible in the total taxable income. The ld. A.O had also not found out any such invested amount nor pointed out the same in asst. order except his bald assumptions and presumptions. b. The ld. CIT(A) thus ought not to have maintained the said disallowance of Rs. Rs. 89,18,157/- c. The Hon'ble ITAT may very kindly delete the same.

stated and brought the complete facts and figures on record which established that the appellant's investment was out of the taxable income of the year. Thus the appellant had fully established that it was the taxable profit of the period itself which was sufficient to invest in securities, yielding exempted income. Hence the ld. CIT(A) in view of the availability of facts before him (which were also brought on record of the ld. A.O by the appellant) seriously erred in mentioning wrong facts in the impugned order thus acted injudicious and based the decision on non- existing facts by maintaining the disallowance on assumptions and presumptions only, which deserves to be deleted.

4. a. That when neither Sec. 14A nor Rule 8D of IT Act and It Rules respectively were attracted / applicable in view the facts that the entire investment of funds in such securities was fully attributable to and out of the taxable income earned by the appellant during this year itself, and were also out of its own capital and free reserves figures which justified and fully supported the appellant's this contention / submissions on fact and in law. Hence the Id. CIT(A) erred in law and facts. b. The Id. CIT(A) thus ought not to have maintained the said disallowance of Rs. Rs. 89,18,157/- c. The Hon'ble ITAT may very kindly delete the same.

5. That in the facts and circumstances of the case and in view of the detailed facts and figures provided by way of charts in the written submission that the Id. CIT(A) seriously erred in law facts in not at all discussing and dealing with the submissions made before him. The Id. CIT(A) further erred in passing a non-speaking order in violation of mandate of Sec. 250(6) requiring a well-reasoned and speaking order from him. But theId. CIT(A) completely failed in discharging his duty when he had simply proceeded to quote almost all the paras of the assessment order as well as also entire written submissions of the appellant in the appellate order and he did not deal with the facts and figure and submissions made by the appellant, hence the impugned asst. order and CIT(A)'s order are not at all sustainable and have to be quashed, without providing any second inning.

3. Brief fact of the case is that the assessee is a Gramin Bank. In the impugned assessment year the assessee invested 15 crore in UTI in two instalments Rs. 10 Crore on dated 21.05.2014 and Rs. 5 Crore on dated 31.03.2015. The assessment was framed u/s 143(3)/147. The ld. AO calculated the expenses related to exempted income which was yielded amount to Rs.2,91,01,555/- from the investment in UTI amounting to Rs. 15 crore. The ld. AO applied the Rule 8D r.w.s. 14A and calculated the expenses which is related to exempted income amount to Rs.89,18,157/-. The amount of Rs.89,18,157/- was added back with the total income of the assessee for contravening of section 14A of the Act. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) without considering the submission of the assessee passed the order against assessee. Being aggrieved assessee filed an appeal before us.