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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER PER R.S.SYAL, VP :
This appeal by the assessee is arising out of the order passed by the CIT(A)-1, Pune, on 29-06-2017 in relation to the A.Y. 2014-15.
The only issue raised in this appeal is against the confirmation of disallowance of Rs.14,72,451/- made by the AO u/s.14A of the Income Tax Act, 1961 (hereinafter also called as ‘the Act’).
2 ITA No.2105/PUN/2017 Avinash Ramchandra Phadnis
Succinctly, the facts of the case are that the assessee
earned exempt dividend income, which figure has been given
at Rs.1,82,362/- in the grounds of appeal before the Tribunal.
No disallowance was offered u/s.14A of the Act read with
Rule 8D of the Income Tax Rules, 1962. The AO invoked the
provisions of Rule 8D and made disallowance amounting to
Rs.14,72,451/-. The Ld. CIT(A) sustained such disallowance.
I have heard the ld. DR and perused the relevant material
on record. It is found that the assessee earned dividend income
of Rs.1,82,362/-, which was claimed as exempt. The Hon'ble
Delhi High Court in the case Cheminvest Ltd. vs. CIT (2015)
378 ITR 33 (Del) has held that if there is no exempt income,
there can be no question of making any disallowance u/s 14A
of the Act. Similar view has been taken by the Hon'ble Delhi
High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH
081-Del-HC. The net effect of these decisions is that the
disallowance u/s 14A gets restricted to the extent of exempt
income, even if the provisions of the section are attracted.
Similar view has been taken by the Delhi Bench of the
Tribunal in several cases including Indo Hongkong Industries
Pvt. Ltd. Vs. DCIT in ITA Nos. 2611 & 2612/Del/2015 vide its
3 ITA No.2105/PUN/2017 Avinash Ramchandra Phadnis
order dated September, 2018, to which I am a party. No contrary decision has been brought to my notice by the ld. DR. In view of the above precedents, which are squarely applicable to the facts of the instant case, I limit the disallowance to the extent of exempt income of Rs.1,82,362/-.
In the result, the appeal is partly allowed.
Order pronounced in the Open Court on 13th November, 2018. Sd/- (R.S.SYAL) उपा�य�/ VICE PRESIDENT उपा�य� उपा�य� उपा�य�
पुणे Pune; �दनांक Dated : 13th November, 2018 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. आयकर आयु�(अपील) / The CIT (Appeals)-1, Pune 4. आयकर आयु� / The Pr. CIT-1, Pune 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड� फाईल / Guard file. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार
/ True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.2105/PUN/2017 Avinash Ramchandra Phadnis
Date 1. Draft dictated on 12-11-18 2. Draft placed before author 12-11-18 3. Draft proposed & placed before the - second member 4. Draft discussed/approved by Second - Member. 5. Approved Draft comes to the Sr.PS/PS 12-11-18 6. Kept for pronouncement on 13-11-18 7. File sent to the Bench Clerk 13-11-18 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.
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