HARIANI & CO.,MUMBAI vs. ACIT -16(2), MUMBAI

O R D E R

PER RAM LAL NEGI, JM

and confirmed the addition. The assessee is in appeal before the Tribunal against the said findings of the Ld. CIT (A).

4. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective ground:- “On the facts and in the circumstances of the case, Ld. CIT (Appeals) erred in confirming the order of A.O. making a disallowance of Rs. 83,100/- under section 14A of the Act.”

4. At the outset, the Ld. counsel for the assessee pointed out that this issues is covered in favour of the assessee by the order of the Tribunal rendered in the assessee’s own case for the Assessment Year (AY) 2011-12 and 2012-13. The Ld. counsel further submitted that since there is no change of facts in the present case, the Ld. CIT (A) ought to have followed the decision of the Tribunal for the AY 2011-12 and 2012-13. Since, the Ld. CIT(A) has passed the impugned order contrary to the decision of the Tribunal in assessee’s own cases aforesaid, the same is liable to be dismissed.

5. On the other hand, the Ld. Departmental Representative (DR) relying on the findings of the Ld. CIT (A) submitted that since the AO had made addition in accordance with the provisions of law, the Ld. CIT(A) has rightly confirmed the addition made by the AO. Hence, there is no infirmity in the order passed by the Ld. CIT (A) to interfere with.

6. We have heard the rival submissions and carefully perused the material on record including the orders passed by the coordinate Bench in assessee’s own case for the AY 2011-12 and 2012-13. We notice that the coordinate Bench has decided the identical issue in favour of the assessee in assessee’s own case for the AY 2012-13. The observations of the coordinate Bench read as under:- “2.1 We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm declared taxable income of Rs. 3,66,75,300/- on 21/09/2011. The assessee made investment in a single script in mutual fund out of own funds by claiming Assessment Year: 2013-14 that no interest expenditure was attributable for such investment. It was also claimed that the assessee firm is of solicitor and advocates as such no person looks after investment portfolio either, meaning thereby, no expenses were claimed to be incurred on such investment. However, the ld. Assessing Officer made disallowance u/s 14A r.w.r. 8D, thus, he made disallowance of 0.5% of the average investment amounting to Rs. 22,235/- and added to the total income. On appeal, the Ld. Commissioner of Income Tax (Appeal) confirmed the addition. The assessee is in further appeal before this Tribunal. We find that the impugned issue is covered by the decision from Hon’ble Delhi High Court in CIT vs. Om Prakash Khetan (2015) 376 ITR 390 (Del), wherein it was held that in order to disallow the expenditure, there must be nexus between the expenditure incurred and the income not forming part of the total income. The disallowance made u/s 14A was deleted the Ld. Commissioner of Income Tax (Appeal). On appeal, the Tribunal confirmed the order of the Tribunal and the Hon’bole High Court affirmed the decision of the Tribunal. In view of this matter, since no expenditure was incurred by the assessee for earning exempt income, no disallowance u/s 14A is warranted. The ld. Assessing Officer is directed to delete the addition.”