RANADEY MICRONUTRIENTS PVT.LTD,,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX,, PUNE

Mrs. Anita Singh appearing on behalf of the assessee submitted that the solitary issue raised in appeal by the assessee is with respect to disallowance made u/s. 14A r.w. Rule 8D(2)(ii) of the Act. The ld. AR submitted that the assessee is a private limited company engaged in the business of manufacture and sale of Inorganic and Micronutrient Mixture Fertilizers. The assessee had filed return of income for the impugned assessment year on 29-09-2012 declaring total income of Rs.91,36,633/-. In scrutiny assessment proceedings, the Assessing Officer inter alia made disallowance of Rs.13,52,528/- u/s. 14A r.w. Rule 8D. During the period relevant to the assessment year under appeal, the assessee had earned dividend income of Rs.14,92,000/- exempt u/s. 10(34) of the Act. The ld. AR submitted that the assessee is having own interest free funds to the tune of Rs.7,54,94,324/-, whereas, the investments during the relevant period are only Rs.4,25,91,226/-. The assessee has not utilized borrowed funds for making the investments. Thus, there is no question of making disallowance u/s. 14A with respect to interest expenditure. The ld. AR submitted that similar disallowance on account of interest expenditure u/s. 14A was made in assessment years 2008-09 and 2010-11. The issue travelled to the Tribunal. The Tribunal in ITA No. 638/PUN/2017 for assessment year 2008-09 decided on 28-09-2018 and ITA No. 137/PUN/2015 for assessment year 2010-11 decided on 18-10-2017 deleted the disallowance in respect of interest expenditure under Rule 8D(2)(ii). The ld. AR further in support of her contentions referred to the Balance sheet of assessee as on 31-03-2012 at page 7 of the paper book. The ld. AR submitted that the authorities below have totally disregarded the law laid down by the Hon’ble Jurisdictional High Court in the case of