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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI RAVISH SOOD & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2012-13. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-8, Mumbai [in short ‘CIT(A)’] and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).
The grounds of appeal
filed by the assessee read as under:
1. On the facts and in law, the Ld. CIT(A) had erred in confirming the addition of Rs.1,36,864/- to the income computed u/s 115JB being the amount arrived at by the AO as per Rule 8D r.w.s 14A of the Act.
2. On the facts and in law, the Ld. CIT(A) had failed to appreciate that investment on which exempt income was received are required to be excluded for disallowance u/s 14A r.w.s. 8D. Under the facts and circumstances of the matter, he ought to have restricted the disallowance u/s 14A r.w.r. 8D(2)(iii) at Rs.51,638/-.
3. On the facts and in law, had erred in confirming the disallowance of Rs.26,528/- under Rule 8D(2)(ii) r.w.s. 14A without appreciating the facts that own funds are much more than the investment in assets, the income of which is exempt from tax.
3. In a nutshell, the facts are that the assessee-company filed its return of income for the assessment year (AY) 2012-13 on 25.09.2012 declaring total income at Rs. Nil. In the assessment completed u/s 143(3) of the Act, the Assessing Officer (AO) made an addition of Rs.1,36,864/- u/s 14A of the Act.
4. In appeal, the assessee submitted before the Ld. CIT(A) that the AO should not have made a disallowance of Rs.1,36,864/- which is above the suo motu disallowance of Rs.95,159/- made by the appellant. The Ld. CIT(A) observed that the assessee itself had filed the revised working of disallowance of Rs.1,36,864/- instead of Rs.95,159/-. Keeping the above fact in mind, the Ld. CIT(A) confirmed the disallowance of Rs.1,36,864/- made by the AO u/s 14A of the Act.
5. Before us, the Ld. counsel of the assessee submits that no disallowance should be made u/s 14A r.w. Rule 8D to the income computed u/s 115JB in view of the decision of the Special Bench of the Tribunal in ACIT v. Vireet Investment Pvt. Ltd. in for AY 2008-09. Also it is argued that disallowance u/s 14A r.w. Rule 8D should be restricted to the investments on which exempt income is received. In this regard reliance is placed by him on the decision in Vireet Investment Pvt. Ltd. (supra).