SEVAK PUBLICATION PRIVATE LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX - 8(1)(2), MUMBAI

सुनवाईकीतारीख / Date of Hearing: 03.01.2019 घोषणाकीतारीख /Date of Pronouncement: 30.01.2019 आदेश / O R D E R

PER AMARJIT SINGH, JM:

ITA. No.5540/M/2017 A.Y.2012-13

1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming that Rule 8D of the Rules is applicable in the case of the appellant.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance made by the AO under Rule 8D(2)(iii) of the Act. Ground II General The appellant craves leave to add, to alter and/ or amend all or any of the foregoing grounds of appeal

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3. The brief facts of the case are that the assessee filed his return of income on 29.07.2012 for the A.Y. 2010-11 declaring total income to the tune of Rs.2,10,46,394/-. The return was processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny and necessary notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee earned the exempt income in sum of Rs.58,49,476/-. The assessee voluntarily disallowed in sum of Rs.10,000/- u/s 14A of the Act. The AO applied the provisions of Section 14A r.w. Rule 8D and assessed the expenses to earn the exempt income in sum of Rs.8,10,970/-. The total income of the assessee was assessed to the tune of Rs.2,18,57,364/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but the assessee was not satisfied on the ground raised before us, therefore, the assessee has filed the present appeal before us.

4. We have heard the argument and advanced by the Ld. Representative of the Department has gone through the record carefully. Under this issue the assessee has challenged the confirmation of disallowance of Rs.3,53,029/- u/s 14A of the I.T. Act, 1961 r.w. Rule 8D(2)(iii). The Ld. Representative of the assessee has argued that the ITA. No.5540/M/2017 A.Y.2012-13 investment which yielded the exempt income is liable to be considered for the purpose of assessing the expenditure to earn the exempt income in view of the provision u/s 14A of the I.T. Act, 1961 r.w. Rule 8D(2)(iii), therefore, in the said circumstances, the finding of the CIT(A) is not justifiable and is liable to be set aside and in support of his contention, the Ld. Representative of the assessee has placed reliance upon the law settled in ACIT circle 17(1) Vs. Vireet Investment (P.) Ltd (2017) 82 taxmann.com 415. On the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the finding of the CIT(A), we find that the issue has not been decided on the basis of the decision in case titled as ACIT circle 17(1) Vs. Vireet Investment (P.) Ltd (2017) 82 taxmann.com 415. It is not in dispute that for the purpose of disallowance of the expenses to earn the exempt income, the investment which yielded the exempt income is liable to be considered under the provision u/s 14A r.w. Rule 8D(2)(iii). In view of the said circumstances, we set aside the finding of the CIT(A) on this issue and restored the issue before the AO to decide the matter afresh in view of the decision of Hon’ble ITAT Delhi bench in the case of ACIT circle 17(1) Vs. Vireet Investment (P.) Ltd. (2017) 82 taxmann.com 415 Delhi Tribunal. Accordingly, this issue is decided in favour of the assessee against the revenue.

ITA. No.5540/M/2017 A.Y.2012-13