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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM
आदेश / ORDER PER S. S. GODARA, JM :
This assessee’s appeal for A.Y. 2013-14 is directed against the CIT(A), Pune’s order dated 31/08/2017 passed in case No.ITBA/APL/S/250/2017- 18/1006031785(1) involving proceeding u/s. 143(3) of the Income Tax Act, 1961 ; in short "the Act.
Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive grievance raised in the instant appeal that both the learned lower authorities have erred in law and on facts in making Section 14A r.w. rule 8D disallowance, we note that the Assessing Officer had computed proportionate interest and administration expenditure sums of Rs.64,19,226/- and Rs.9,64,083/-; respectively totaling to Rs.73,83,309/-. The CIT(A) has enhanced the same to the extent of Rs.1,40,88,702/- thereby holding that it is not the average value of net investment involving credit and debit balances but average value of the investments itself that has to be taken into consideration.
This leaves the assessee aggrieved.
3. Learned counsel first of all has filed the assessee’s financial’s position as well as corresponding shareholder funds and unsecured loans totaling to Rs.55,45,13,814/- as against the average balance of investment amount of Rs.36,79,29,350/- taken in the CIT(A)’s order. He quotes CIT Vs Reliance Utilities & Power Ltd 313 ITR 340 (Bom) that necessary presumption is such an instance is of investment of interest free funds only. Learned lower authorities do not seem to have considered all these clinching aspects in their respective orders. We thus restore this proportionate interest expenditure disallowance issue back to the Assessing Officer for his afresh adjudication as per law.
Coming to the administrative expenditure disallowance component, we quote REI Agro Ltd. V/s. DCIT (2013) 144 ITR 141 (Kolkata) that only dividend yielding than the entire investments have to be taken into consideration Hon’ble Calcutta high court has also confirmed the same in GA No.358/2013 in Revenue’s appeal. The assessing authority shall accordingly compute this latter head of administrative expenditure disallowance afresh as per law.
This assessee’s appeal is allowed for stastical purposes in above terms. Order pronounced in the Open Court on this 13th day of May, 2022.
Sd/- Sd/- S (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 13th May, 2022. Ashwini आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : अपऩलधथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The CIT(A), Pune. 4. The Pr.CIT-2, Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. गधर्ा फ़धइल / Guard File. 6. आदेशधनपसधर / BY ORDER,