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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: SHRI MAHAVIR PRASAD & SHRI AMARJIT SINGH
PER MAHAVIR PRASAD, JUDICIAL MEMBER
This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-2, Ahmedabad dated 31.05.2018 pertaining to A.Y. 2015-16 and following grounds have been taken:
2 . A.Y. 2015-16 The Ld.ClT(A) has erred in law and on facts in deleting the disallowance u/s 14A of the IT Act 1.1 The Ld CIT(A) has failed to appreciate that the onus lies on the assessee to demonstrate that it had interest free funds available with it for making such investment and not other way around. 1.2 The Ld CIT(A) has failed to appreciate that in the case of mixed funds, theory of apportionment of interest is applicable. Reference in this regard is made to the decision of the Hon'ble Supreme Court in the case of Maxopp Investment Ltd vs CIT ( Civil Application No. 104-109 of 2018). 1.3 The Ld CIT (A) has failed to appreciate that as per Section 106 of Evidence Act, when any fact is especially within the knowledge of of any person, the burden of proving the fact is upon him.
The facts of the case are that on verification of balance sheet, it is noticed that the assessee company has received dividend income on share of Rs. 6,66,021/-. Thereafter a notice was issued to the assessee whether any expenses have been claimed in respect of exempt income in response to such notice was filed details of investment in shares and working of disallowance u/s. 14A r.w.r. 8D. But Assessing Officer did not find assessee calculation as per law and made disallowance u/s. 14A to the tune of Rs. 6,08,85,036/-.
Thereafter assessee filed an appeal before the ld. CIT(A) who granted relief to the assessee.
Now Revenue has come before us by way of second appeal.
We have gone through the relevant record and impugned order. In this case, ld. A.O. has made disallowance u/s. 14A of Rs. 6,08,85,036/- invoking the provision of Rule 8D on the exempted income of Rs. 6,66,021/-. The assessee suo moto has made disallowance of Rs. 13,43,258/- in the computation of income. It is undisputed fact that assessee has earned dividend income of Rs.
3 . A.Y. 2015-16 6,66,021/- and has held in the case of CIT vs. Corrtech Energy Pvt. Ltd. reported in (2014) 223 Taxmann.com 0130. The Hon’ble Gujarat High Court has held that there cannot be disallowance u/s. 14A more that exempted income.
In our considered opinion, ld. CIT(A) has passed detailed and reasoned order and same does not require any kind of interference at our end.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in Open Court on 22 - 10- 2019