NIRAJ KUMAR ASSOCIATES PVT.LTD,PASHAN vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 2, PUNE

PDF · subscribers
ITA 2565/PUN/2017Status: DisposedITAT Pune13 May 2022AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue of proportionate interest expenditure disallowance back to the Assessing Officer for fresh adjudication, considering the assessee's financial position and shareholder funds. The administrative expenditure disallowance was also to be recomputed based on dividend-yielding investments.

What were the facts?

The assessee's appeal pertains to disallowance made under Section 14A read with Rule 8D for Assessment Year 2013-14. The Assessing Officer computed disallowances for proportionate interest and administrative expenditure, which were enhanced by the CIT(A).

What were the issues?

Whether the disallowance under Section 14A read with Rule 8D was correctly computed by the lower authorities, considering the assessee's financial structure and the nature of investments.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “A” BENCH, PUNE

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

For Appellant: Shri Pramod S. Shingte
Hearing: 05.05.2022Pronounced: 13.05.2022

आदेश / ORDER PER S. S. GODARA, JM :

1.

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.

2.

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.

3.

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,

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →