M/S. ARISTON CAPITAL ASSET HOLDINGS PVT. LTD.,CHENNAI vs. ITO, CORPORATE WARD - 1 (4), CHENNAI

The assessee filed this appeal against the order of Commissioner of Income Tax (Appeals)-1, Chennai in dated 25.01.2019 for assessment year 2013-14.

The assessee filed this appeal belatedly by 93 days. An affidavit was filed stating that the impugned order was misplaced by the accountant without notice to the assessee which caused the belated filing of the appeal. It was pleaded that the delay in filing the appeal may be condoned and due decision may be rendered on the merits, in the interest of justice.

We heard the rival parties and condone the delay.

M/s. Ariston Capital Asset Holding Pvt. Ltd., the assessee is engaged in the business of energy management. While making the assessment for assessment year 2013-14, the AO, inter alia, made disallowance u/s. 14A r.w.r. 8D. Aggrieved, the assessee filed an appeal before the CIT(A). The Ld. CIT(A) dismissed the appeal. Aggrieved against that order the assessee filed this appeal. The case was heard through video conferencing.

The Ld. AR submitted that the assessee received Rs. 1,16,49,826/- as a dividend income during the year towards which it has disallowed Rs. 1,23,250/- in the memo of income filed. However, the AO invoked section 14A r.w.r. 8D and made a further disallowance at Rs. 58,61,215/-. The Ld. CIT(A) failed to appreciate that the provisions of section 14A r.w.r. 8D had no application on the facts of the case and ought to have appreciated that the AO having not recorded satisfaction, the disallowance made should have been deleted and therefore, pleaded that the assessee’s appeal be allowed. Per contra, the Ld. DR inviting our attention to the relevant portion of the order of the CIT(A) submitted that onus was on the assessee to furnish breakup of interest expenditure disallowed by the assessee and to substantiate as to how the amount disallowed u/s. 14A by the assessee is in accordance with the provision. Since, the assessee has not furnished specific details, the AO recorded due satisfaction, invoked section 14A r.w.r. 8D and made the impugned disallowance. Therefore, the Ld. CIT(A) dismissed the appeal and hence the Ld. DR submitted that the order of the CIT(A) be confirmed.

We heard the rival submissions and gone through the relevant material. The assessee earned dividend income of Rs. 1,16,49,826/-. The assessee in its memo of income deducted Rs. 1,23,250/- towards expenditure incurred for earning the exempt income. It is clear from the orders of the lower authorities that the assessee has not specified as to how it has arrived this quantum of disallowance. In the absence of specific particulars, the AO duly recorded reason and invoked section 14A r.w.r. 8D and made the impugned disallowance. Therefore, the onus is on the assessee to furnish relevant material towards earning of exempt income, breakup of the expenditure incurred by the assessee in relation to such :-4-: exempt income and substantiate that the amount of disallowance worked out by it is fair and reasonable. In the absence of such particulars, the AO invoked section 14A r.w.r. 8D and made the impugned disallowance.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.