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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH
आदेश / O R D E R
PER SHRI RAJPAL YADAV, JUDICIAL MEMBER : The Revenue is in appeal before us against the order of Ld.Commissioner of Income Tax(Appeals)-1, Ahmedabad [‘CIT(A)’ in short] dated 24/07/2017 passed for Assessment Year (AY) 2013-14.
The Revenue has pleaded that the Ld.CIT(A) has erred in law and on facts in restricting the disallowance made u/s.14Aof the Income Tax
ITA No.2029/Ahd/2017 DCIT vs. DB Corp.Ltd. Asst.Year – 2013-14 - 2 - Act, 1961 (hereinafter referred to as "the Act") read with Rule 8D of the Income Tax Rules, 1962 to Rs.3,25,000/- as against Rs.1,06,77,237/- made by the Assessing Officer.
The brief facts of the case are that assessee is engaged in the business of publication of Newspaper & Periodicals. It has filed its return of income electronically on 27/09/2013 declaring total income at Rs.3,30,00,78,860/-. On scrutiny of accounts, it revealed to the Assessing Officer that assessee has made investment in shares of Rs.1,56,13,19,437/- and earned dividend income amounting to Rs.3,25,000/-. He made an analysis and worked out the disallowance with the help of Rule 8 D of Income Tax Rules, 1962 of Rs.1,06,77,237/-.
On appeal, Ld.CIT(A) restricted this disallowance to the extent of dividend income earned by the assessee which is exempt from tax.
The issue before us is whether disallowance u/s.14A of the Act could be restricted to the extent of dividend income which is claimed to be exempt from tax by the assessee.
The ld.counsel for the assessee placed reliance upon the order of the ITAT in assessee’s own case for AY 2009-10 in ITA
ITA No.2029/Ahd/2017 DCIT vs. DB Corp.Ltd. Asst.Year – 2013-14 - 3 - No.1850/Ahd/2012. He further placed reliance on the judgement of Hon’ble Supreme Court in the case of Principal Commissioner of Income Tax, Patiala vs. State Bank of Patiala (2018) 99 taxmann.com 286 (SC).
On the other hand, Ld.DR relied upon the order of Assessing Officer.
We have duly considered the rival contentions and gone through the records carefully. For AY 2009-10, under identical situation, the Tribunal has recorded the following finding:
“9. We have carefully considered the arguments of both the sides and perused the material placed before us. The Hon’ble Jurisdictional High Court has held where the assessee did not make any claim for exemption of any income from payment of tax, disallowance u/s.14A could not be made. It is the contention of the learned Counsel that it did not claim any income to be exempt from the payment of income-tax. In support of this contention, he referred to the computation of income filed by the assessee. However, we deem it proper to set aside this issue back to the file of the Assessing Officer and we direct him to verify whether the assessee has claimed for exemption of any income from payment of tax. If the assessee did not claim any income to be exempt from the payment of tax, then no disallowance u/s.14A could be made. However, if any income is claimed to be exempt, then the disallowance should be restricted to such income. With this direction, we restore this matter back to the file of the Assessing Officer. 10. In the result, assessee’s appeal is deemed to be allowed for statistical purposes.”
ITA No.2029/Ahd/2017 DCIT vs. DB Corp.Ltd. Asst.Year – 2013-14 - 4 - 8.1. This finding is based upon the decision of Hon’ble Gujarat High Court in the case of CIT vs. Corrtech Energy (P.) Ltd. reported in (2014) 45 taxmann.com 116 (Guj.), wherein the Hon’ble High Court has held that if there is no exempt income claimed by the assessee, then no expenses could be disallowed.
8.2 Taking guidance from the decision, the Tribunal has upheld in restricting the disallowance to the extent of exempt income at the most. Respectfully following the decision of Coordinate Bench(supra), we find no reason to interfere with the order of the Ld.CIT(A). Hence, this ground of appeal of the Revenue is dismissed.
In the result, Revenue’s appeal stands dismissed. Order pronounced in the Court on 15th February-2019 at Ahmedabad.
Sd/- Sd/- ( AMARJIT SINGH ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 15/ 02 /2019 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS
ITA No.2029/Ahd/2017 DCIT vs. DB Corp.Ltd. Asst.Year – 2013-14 - 5 -
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-1, Ahmedabad �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation .. 14.2.19(dictation-pad 6- pages attached at the end of this File) 2. Date on which the typed draft is placed before the Dictating Member ..14.2.19 3. Other Member... 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S…….15.2.19 7. Date on which the file goes to the Bench Clerk…………………15.2.19 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………