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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: HON’BLE SHRI MAHAVIR SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2013-14 contest the order of Ld. Commissioner of Income- Tax (Appeals)-12, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-12/DCIT-6(2)(1)/206/16-17 dated 24/11/2017 qua deletion of disallowance u/s 14A for Rs.71.11 Lacs. None has appeared for assessee and no valid adjournment application is on record. Left with no option, we proceed to dispose-off the same on the basis of material available on record and after hearing Ld. Departmental Representative, who supported the stand of Ld. AO.
The assessee being resident corporate entity stated to be engaged as investment manager was assessed u/s 143(3) for impugned AY on 16/03/2016 wherein the income was determined at Rs.43.78 Lacs under normal provisions, inter-alia, after disallowance u/s 14A for Rs.71.11 Lacs as against returned loss of Rs.32.86 Lacs e-filed by the assessee on 18/09/2013. The said disallowance was made on account of administrative expenses u/r 8D(2)(iii), computed @0.5% of average investments held by the assessee.
The first appellate authority, relying upon the decision of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [82 Taxmann.com 415], held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Further the investment made in certificate of deposit [COD] was chargeable to tax and therefore, the same were to be excluded while computing average investments. Similarly, Mutual Funds -Growth option investments were to be excluded since they would not generate exempt income. After excluding the same, 0.5% of average investments worked out to be Rs.14,129/- which the assessee had already disallowed while computing the taxable income. Therefore, the Ld. AO was directed to delete the impugned disallowance of Rs.71.11 Lacs. Aggrieved, the revenue is in further appeal before us.
Upon careful consideration of factual matrix, we find the action of Ld. first appellate authority is in line with the decision of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [82 Taxmann.com 415] and therefore, no infirmity could be found in the same. The revenue is unable to controvert the factual matrix as noted by Ld. first appellate authority. Hence, by confirming the stand of Ld. CIT(A), we dismiss the appeal 5. Resultantly, the appeal stands dismissed. Order pronounced in the open court on 22nd March, 2019. Sd/- Sd/-- (Mahavir Singh) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 22/03/2019 Sr.PS:-Jaisy Varghese आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6. आदेशानुसार/ BY ORDER,