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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
आदेश/O R D E R
PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-10, Ahmedabad (‘CIT(A)’ in short), dated 26.02.2018 arising in the assessment order dated 22.12.2016 passed by the (Shri Alin Ajaybhai Shah vs. ITO) A.Y. 2014-15 - 2 - Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2014-15.
As per the grounds of appeal, the solitary grievance of the assessee relates to disallowance of Rs.2,55,657/- towards administrative expenses by adopting formula provided under Rule 8D(2)(iii) r.w.s. 14A of the Act. The AO applied formula being one and half percent of the average value of investment, income from which does not form part of total income and worked out disallowance of Rs.2,55,657/-.
3. In the course of hearing before us, the learned counsel submitted that the total expenditure incurred by the assessee stands at Rs.91,535/- only and therefore the disallowance cannot exceed the total expenditure actually incurred. We straightway find prima facie merit in the plea of the assessee for restricting the disallowance to Rs.91,535/- in substitution of disallowance of Rs.2,55,657/- carried out by the AO. It is trite that estimated disallowance under s.14A read with Rule 8D cannot exceed the expenditure actually claimed for deduction. The disallowance can naturally be made only where expenses have been claimed as deduction and no disallowance can be made where no expenditure has been claimed. Accordingly, the disallowance is restricted to the (Shri Alin Ajaybhai Shah vs. ITO) A.Y. 2014-15 - 3 - extent of actual expenditure incurred of Rs.91,535/- and assessee gets relief for the remaining amount.
In the result, the captioned appeal of the assessee is partly allowed.
This Order pronounced on 07/04/2021
Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 07/04/2021 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।