BADRA ESTATES AND INDUSTRIES LIMITED,BANGALORE vs. ACIT, CIRCLE-1(1)(2), BANGALORE
Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE
Before: SHRI NARENDER KUMAR CHODHRY & SHRI WASEEM AHMEDAssessment Years: 2017-18
PERSHRI NARENDER KUMAR CHODHRY, JUDICIAL MEMBER:
This appeal has been preferred by the Assessee against the order dated 19/06/2024 impugned herein passed by the National Faceless
Assessment Center (NFAC), Delhi/Ld. Commissioner of Income Tax (A) {in short ‘Ld. Commissioner’} u/s 250 of the Income-tax Act 1961 (in short ‘Act’) for the assessment year 2017-18. ITANo.2573/Bang/2024
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The ld.AR of the Assessee in the context of first issue/ disallowance amounting to Rs.1,23,233/-made u/s 14A r.w. rule 8D, has submitted that the AO has failed to appreciate the provisions of sec. 14A of the Act. Even otherwise the ld. Commissioner also upheld such disallowance by sidelining the relevant provisions of law and therefore the decision of the Ld. Commissioner on this aspect is unsustainable.
On the contrary, the ld. DR vehemently supported the orders of the authorities below on the disallowance u/s 14A of the Act.
Having heard the parties and perused the material available on record, we observe from the record that the Assessee has made the total investment of Rs.93,25,121/- in 4 companies during the AY under consideration and has received the dividend to the tune of Rs.7,18,000/- in total [6,74,920+21540+21,540] and thereby if any disallowance has to be made, then only this amount to be considered but not the entire investment, as held by the Delhi High Court in the case of ACB India Ltd vs ACIT [TS-176- HC-2015(DEL)-O] by holding as under:
“That for the purpose of Rule-8D, only those investments shall be considered which have actually yielded exempt income during the relevant previous year.
Thus, respectfully following the dictum of Hon’ble High Court in the case (supra), we direct the JAO to consider the investments, which have actually yielded income during the AY under consideration but not the entire investment. Thus, this ground raised by the Assessee is allowed.
ITANo.2573/Bang/2024
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6. Coming to the section with regard to consideration of 115JE of the Act by the AO, we observe that the CIT(A) has already directed the AO to consider the same and compute the deemed income but nothing happened so far. Thus, for substantial justice, as the parties have also prayed for the same, we direct the JAO to pass the consequential order in pursuance to the impugned order within 3 months from today, while giving an opportunity for hearing to the Assessee.
In the result, the appeal is partly allowed in the aforesaid terms.
Order pronounced in the court on 11thdayof August, 2025 (WASEEM AHMED)
Judicial Member
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Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file
By order
Asst.