ADURJEE & BROTHERS PRIVATE LIMITED,PUNE vs. DCIT CENTRAL CIRCLE-1(1), PUNE

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ITA 1953/PUN/2019Status: DisposedITAT Pune19 July 2022AY 2012-134 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer considered the entire investments, not just those yielding exempt income. Following a Special Bench decision, the Tribunal directed a fresh computation of disallowance as per law.

What were the facts?

The assessee challenged a disallowance made under Section 14A read with Rule 8D for indirect expenditure related to exempt income. The Assessing Officer considered all investments, not just those yielding exempt income.

What were the issues?

Whether the disallowance under Section 14A read with Rule 8D was correctly computed by considering all investments instead of only those yielding exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM

For Appellant: Shri R.S. Abyankar
For Respondent: Shri S. P. Walimbe
Hearing: 09.06.2022Pronounced: 19.07.2022

आदेश / ORDER

PER S. S. GODARA, JM :

1.

This assessee’s appeal for A.Y. 2012-13 is directed against the CIT(A)- 11, Pune’s order dated 03/10/2019 passed in case No. PN/CIT(A)-11/DCIT Cen.Cir.1(1)/PN/228/2014-15 involving proceeding u/s. 143(3) of the Income Tax Act, 1961; in short "the Act”. Heard both the parties. Case file perused.

2.

Learned counsel states at the outset he is only pressing for the assessee’s second substantive ground challenging correctness of both the lower authorities action making section 14A r.w. Rule 8D disallowance of Rs. Rs. 79,22,635/-(indirect expenditure) in relation to its exempt income from dividends and share of profit from partnership firms amounting to Rs.61,63,889/- and (-) Rs15600; respectively, coming to net sum of Rs.61,48,289/-.

3.

Learned counsel invited our attention to the Assessing Officer’s detailed computation sheet Annexure – 1 that he had considered the assessee’s entire investments as against those only yielding exempt income. Faced with this situation and in light of this tribunal’s Special Bench decision in ACIT V/s Vireet Investments (P) Ltd. 82 taxmann.com 415 (Delhi- Trb.) (SB), we reject the Revenue’s vehement arguments supporting the impugned disallowance in principle and direct the assessing authority to frame afresh computation as per law in above terms. Ordered accordingly.

No other ground has been pressed before us.

4.

This assessee’s appeal is partly allowed for statistical purposes in above terms.

Order pronounced in the Open Court on this 19th day of July, 2022.

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