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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
आदेश / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by Revenue is against the order of CIT(A), Pune-11, Pune, dated 27.10.2016 relating to assessment year 2004-05 against order passed under section 143(3) r.w.s. 263 of the Income-tax Act, 1961 (in short ‘the Act’).
The Revenue has raised the following grounds of appeal:- 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in directing the Assessing Officer to restrict the disallowance to Rs.2 lacs on account of disallowance made u/s 14A
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without appreciating the fact that the Assessing Officer was not justified in disallowing estimated dividend @ 5% relying on the decision for A.Ys. 2006-07 & 2007-08 in the assessee’s related case, i.e. Dhariwal Industries Ltd without distinction of the facts? 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing the assessee’s appeal restricting the disallowance of depreciation @ 5% relying on the decision of the Hon’ble ITAT in AY 2006-07 eventhough the assessee itself accepted the disallowance @ 10% in AY 2011-12? 3. The order of CIT(A) may be vacated and that of the Assessing Officer be restored.
Despite service of notice, none appeared on behalf of assessee nor any application was moved for adjournment. However, because of the issue involved in the present appeal, we proceed to adjudicate the same after hearing the learned Departmental Representative for the Revenue.
Briefly, in the facts of the case, the assessee was engaged in manufacturing of Pan Masala & Gutkha. The Assessing Officer vide order passed under section 143(3) r.w.s. 263 of the Act had made certain disallowances in the hands of assessee including disallowance under section 14A of the Act and depreciation on luxury cars.
The CIT(A) in turn relying on the decision of Tribunal in assessee’s own case has restricted the disallowance under section 14A of the Act to ₹ 2 lakhs vide para 5.2, which reads as under:- “5.2 The disallowance made by the AO in asst year 2004-05 is on an ad hoc basis because Rule 8D was not applicable in this asst year. Following the ITAT order in asst year 2006-07 cited above, the disallowance u/s 14A is restricted to ₹ 2 lakhs only. The ground of appeal is allowed partly.”
Further, in respect of disallowance of depreciation claimed on vehicles, the CIT(A) in turn, relying on the decision of Tribunal in assessee’s own case has restricted to 5% of the depreciation claimed by the assessee. The relevant findings of CIT(A) vide para 6.2 read as under:-
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“6.2 Following the Tribunal’s decision the AO is directed to restrict the disallowance to 5% of the depreciation claimed by the appellant. However, in asst year 2011-12 the AO has also disallowed 10% of the expenditure incurred on vehicle and fuel. It is seen that such a disallowance was accepted by the appellant in 2006-07 before the Tribunal. The disallowance is therefore confirmed in asst year 2011-12 as well. The ground of appeal is thus allowed partly.”
The Revenue is in appeal against the findings of CIT(A).
The learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A) on both the issues. Hence, upholding the order of CIT(A), we dismiss the grounds of appeal raised by Revenue.
In the result, the appeal of Revenue is dismissed.
Order pronounced on this 22nd day of April, 2019.
Sd/- Sd/- (D.KARUNAKARA RAO) (SUSHMA CHOWLA) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक Dated : 22nd April, 2019. GCVSR आदेश की प्रयिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आयुक्त(अऩीऱ) / The CIT(A), Pune-11, Pune; The Pr.CIT (Central), Pune; 4. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे “ए” / DR 5. ‘A’, ITAT, Pune; गार्ड पाईऱ / Guard file. 6. आदेशािुसार/ BY ORDER, सत्यावऩत प्रतत //True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩुणे / ITAT, Pune