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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
AadoSa / O R D E R महावीर स िंह, न्याययक दस्य/ PER MAHAVIR SINGH, JM:
This appeal filed by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-50, Mumbai [in short CIT(A)], ITAs No. 6056/Mum/2017 Appeal No. CIT(A)-50/IT-591/2013-14 vide order dated 07.07.2017. The Assessment was framed by the Asst. Commissioner of Income Tax, Central Circle-45, Mumbai (in short ‘ACIT/ITO/ AO’) for the A.Y. 2010-11 vide order dated 28.03.2013 under section 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with Rule 8D(2)(iii) of the Income Tax Rules, 1962, (hereinafter the Rules). For this assessee has raised the following ground No. 1: - “1. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals)-50, Earnest House, Mumbai [CIT(A)’] has, in his order dated
07. July 2017 passed under section 250 of the Income-tax Act, 1961 (Act), erred in confirming the addition amounting to ₹ 6,13,809/- made by the then Learned Assessing Officer, Asst. Commissioner of Income-tax, Central Circle-45 (erstwhile AO (now known as Deputy Commissioner of Income Tax, Central Circle 8(2)] under section 14A read with rule 8D in Assessment order dates
28. March 2013 passed under section 143(3) of the Act."
3. Briefly stated facts are that the assessee has earned dividend income on long term investment amounting to ₹ 1,65,07,660/- and on ITAs No. 6056/Mum/2017 short term investment amounting to ₹ 14,76,156/-. The assessee claimed the entire dividend income as exempt under section 10(34) of the Act. The AO disallowed administrative expenses by invoking rule 8D(2)(iii) at ₹ 16,13,809/-. According to AO, the assessee has not provided any details that the expenses are not relatable to exempt income and the accounts for taxable income and exempt income were not separately maintained. Accordingly, the AO disallowed the administrative expenses under Rule 8D(2)(iii) of ₹ 6,13,809/-. Aggrieved, assessee preferred the appeal before CIT(A). Before CIT(A), also assessee has not made any submissions in respect of this disallowance hence, he confirmed the same. Aggrieved, now assessee is in second appeal before Tribunal.
Before us also, the learned Counsel for the assessee stated that Bench can take a decision but has not pointed out how the assessee’s expense are not relatable to exempt income. In view of the above factual situation, we are of the view that the assessee has nothing to say in the matter and hence, this disallowance made by AO and confirmed by CIT(A) is affirmed.
The next issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the expenses incurred on account of interest paid to Barclays Bank Buyers Credit amounting to ₹ 16,90,725/- as no TDS was deducted under section 195 of the Act and thereby invoking the provisions of section 40a(i)(A) of the Act. For this assessee has raised the following ground No. 2 and 3: -
2. On the facts and circumstances of the case, the learned CIT(A) erred in confirming the additions amounting to ₹ 16,90,725/- made by ITAs No. 6056/Mum/2017 erstwhile AO under section 40(a)(i)(A) of the Act.
Without prejudice to the Ground No.2, the learned CIT(A) erred in not admitting the additional evidences produced by appellant during the course of haring.”
The learned Counsel for the assessee before us contended that under dispute is only disallowance of interest paid to Barclays Bank Buyers Credit amounting to ₹ 16,90,725/-. According to the assessee these payments were made to foreign bank being foreign companies operating through its branch in India and the amount paid towards interest is liable for TDS under section 195 of the Act and admittedly assessee has not deducted TDS on the above amount. The learned Counsel for the assessee stated that the assessee did not deduct tax from the said interest paid to Barclays Bank PLC as per the no deduction certificate issued by Assistant Director of Income Tax (International Taxation) (in short ADIT) Circle 3(2), dated 25.03.2009 under section 195(3)(i) of the Act. The learned Counsel for the assessee stated that before CIT(A), the assessee filed this certificate and the relevant certificate is now enclosed at page 171 of assessee’s paper book. The learned Counsel for the assessee stated that the CIT(A) has not admitted this evidence and affirmed the addition by stating that this evidence constitutes new additional evidence within the meaning of Rule 46A of Income Tax Rules, 1962 (hereinafter the ‘Rules’). When this fact was confronted to the learned Sr. Departmental Representative, he objected for admission of additional evidence.
5 ITAs No. 6056/Mum/2017