LAXMI METAL PRESSING WORKS PVT. LTD.,,AURANGABAD vs. DEPUTY COMMISSIONER OF INCOME-TAX,,

आयकर अपीलीय अिधकरण “ए” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE �ी डी. क�णाकरा राव, लेखा सद�य एवं �ी िवकास अव�थी, �याियक सद�य के सम� BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM आयकर अपील सं. / ITA No.2214/PUN/2016 िनधा�रण वष� / Assessment Year : 2012-13 Laxmi Metal Pressing Works Pvt. Ltd., Plot No.M-170, MIDC, Waluj, Aurangabad. PAN : AAACL5640G .......अपीलाथ� / Appellant बनाम / V/s. DCIT, Circle- 1, ……��यथ� / Respondent Aurangabad. Assessee by : Shri S. N. Puranik Revenue by : Shri Sanjeev Ghei सुनवाई क� तारीख / Date of Hearing : 03.01.2019 घोषणा क� तारीख / Date of Pronouncement : 09.01.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by the assessee against the order of CIT(A)-1, Aurangabad dated 01.07.2016 for the Assessment Year 2012-13. 2. The grounds raised by the assessee are as under :- “1] The learned CIT(A) erred in confirming the disallowance of Rs.13,92,090/- u/s. 14A r.w.r. 8D. 2] The learned CIT(A) erred in confirming the disallowance of interest of Rs.13,92,090/- u/s. 14A r.w.r. 8D(2)(ii) without appreciating that the assessee company had sufficient interest free funds available for making investments in group companies and accordingly, the disallowance made of interest was not justified at all. 3] The learned CIT(A) failed to appreciate that the investments in shares of various group companies were made on account of business expediency and not with an intention to earn exempt income and hence, there was no reason to make any disallowance u/s 14A r.w.r. 8D in relation to such investments.

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4] The learned CIT(A) further erred in not appreciating that the assessee company had not earned any divided on the investments made in group companies during the current year and therefore, no disallowance u/s. 14A r.w.r. 8D of interest expenditure and indirect expenditure could be made. 5] Without prejudice to the above grounds, the assessee submits that the disallowance made is very high and may be reduced substantially. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 3. The issue raised in all above grounds relates to the disallowance of Rs.13,92,090/- made by the Assessing Officer u/s 14A of the Act read with Rule 8D of the Rules. 4. Deviating from the above grounds, ld. Counsel for the assessee submitted that the assessee made investments in the shares and however, never he earned any exempt income, which formed the part of the total income of the assessee. On these facts, ld. Counsel filed a note stating that the provisions of section 14A of the Act r.w. Rule 8D of the Rules has no role to play in such cases where the dividend income is not earned by the assessee. Referring to the judgement of the Hon’ble Supreme Court in the case of CIT vs. Chettinad Logistics (P) Ltd. 95 taxmann.com 250 (SC), ld. Counsel submitted that the grounds should be allowed in favour of the assessee. 5. Ld. DR for the Revenue relied heavily on the orders of the authorities below.