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Income Tax Appellate Tribunal, MUMBAI BENCH “ H ”, MUMBAI
आयकर अपील�य अ�धकरण मुंबई पीठ “एच ”,मुंबई �ी �वकास अव�थी, �या�यक सद�य एवं �ी अमरजीत �संह, लेखाकार सद�य के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI AMARJIT SINGH , ACCOUNTANT MEMBER आअसं.359/मुं/2023 (�न.व. 2013-14) ITA NO.359/MUM/2023(A.Y.2013-14) Kawaljit Singh Choudhary, B/112, Mittal Park Society, 44, J.R.Mhatre Marg, JVPD Scheme, Ruia Park, Mumbai – 400 049. PAN: AEXPC-4542-E ...... अपीलाथ�/Appellant बनाम Vs. ACIT CIRCLE -25(2), Kautilya Bhavan, BKC, Bandra(E), Mumbai 400 051 .....��तवाद�/Respondent अपीलाथ� �वारा/ Appellant by : Ms. Neelam C. Jadhav ��तवाद� �वारा/Respondent by : Shri Manoj Mishra & Shri Mudit Srivastava सुनवाई क� �त�थ/ Date of hearing : 11/04/2023 घोषणा क� �त�थ/ Date of pronouncement : 11/04/2023 आदेश/ORDER PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ in short ‘the CIT(A)’] dated 16/12/2022, for the Assessment Year 2013-14.
The solitary issue raised in the appeal by the assessee is against disallowance of Rs.4,17,577/- u/s. 14A of the Income Tax Act, 1961 [in short ‘the Act’].
Ms. Neelam C. Jadhav appearing on behalf of the assessee submits that the assessee has earned dividend income of Rs.1,09,353/-. The Assessing Officer invoked Rule 8D and recomputed the disallowance u/s. 14A of the Act to Rs.4,17,577/-. The assessee is engaged in trading of shares. The dividend earned by the assessee is in respect of shares held as stock-in-trade. The Assessing Officer while making disallowance u/s. 14A of the Act has erred in taking interest earned by the assessee as interest expenditure for investment purpose. The assessee has not incurred any expenditure for earning exempt income. The ld. Authorized Representative for the assessee prayed for deleting the disallowance made u/s. 14A of the Act.
The ld. Authorized Representative for the assessee made an alternate prayer that disallowance u/s. 14A r.w. Rule 8D cannot be more than exempt income earned, hence, disallowance may be restricted to exempt income earned during the relevant period.
Per contra, Shri Manoj Mishra representing the Department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.
Both sides heard, orders of authorities below examined. It is an undisputed fact that the assessee has earned dividend income of Rs.1,09,353/- during the period relevant to the assessment year under appeal. No suo-motu disallowance was made by the assessee for earning exempt income. Taking into consideration entire facts, we accept the alternate prayer of the assessee and restrict the disallowance u/s. 14A of the Act to the extent of exempt income earned during the relevant period. The appeal by assessee is partly allowed, in the terms aforesaid.
In the result, appeal by assessee is partly allowed.