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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI S.S. GODARA, JM &DR. A.L.SAINI, AM
आदेश / O R D E R
Per Dr. A. L. Saini, AM:
The captioned appeal filed by the assessee, pertaining to assessment year 2014-15 is directed against the order passed by the Commissioner of Income Tax (Appeal)-2, Kolkata, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the Act) dated 12.05.2016.
The solitary grievance of the assessee in this appeal is that the assessee claimed by filing letter dated 29.04.2016, that for the purpose of disallowance under Rule
Shekhavati Investments and Traders Ltd. Assessment Year:2014-15 8D(2)(iii) vide sec. 14A, only dividend bearing shares and securities should be considered.
Brief facts qua the issue are that the assessee in its letter dated 29.04.2016 has claimed that no disallowance u/s 14A read with Rule 8D should be made in relation to: i) Investment on which no dividend income was received during the year. ii) Strategic Investment made in group companies not for purpose of earning dividend income.
The assessee has claimed that though in the return filed by it, an amount of Rs. 62,49,109/- was not claimed u/s 14A read with Rule 8D, actual disallowance should be assessed as Rs. 26,00,022/-. Since the assessee did not file a revise return for its claim, the claim is rejected following the Supreme court decision in Goetze (India) Ltd. 284 ITR 323.
Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the Ld. CIT(A) who has dismissed the appeal of the assessee observing the following: “I have considered the grounds of appeal, statement of facts and submission of the authorized representative of the appellate company as well as the assessment order framed in the light of the materials available on record before the Assessing Officer during the assessment proceedings. I agree with the A.O. that since no revised return was filed by the appellant company so the claim cannot be allowed. In view of the above, the order of the A.O. is upheld. This grounds of appeal is dismissed.”
5. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before us.
6. At the time of hearing none appeared on behalf of assessee in spite of issuance of notice for hearing more than one occasion and Ld. Departmental Representative(DR), was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed of ex parte qua the Shekhavati Investments and Traders Ltd. Assessment Year:2014-15 assessee, after hearing Ld. DR for the Revenue on merits in terms of Rule 24 of the Income Tax Appellate, Tribunal, Rules, 1963.
7. After hearing the ld. DR for the revenue, we note that the assessee did not file revised return to claim that no disallowance u/s 14A read with Rule 8D should be made. However, the assessee has claimed by submitting the letter to the Assessing Officer and the Assessing Officer could not entertain the claim as it was not emanating from the return of income filed by the assessee. We note that the assessee may raise new grounds (for the issue which was not entertained by the Assessing Officer) during the appellate proceedings or before the Tribunal. We note as per the judgment of the Hon’ble Supreme Court in Goetz (India) Ltd. 284 ITR 323 the Assessing Officer may admit a new claim provided the assessee’s claim it by filing revised return of income and as per the judgement of Hon’ble Supreme court in Goetz (India) Ltd. supra, ld. CIT(A) and Tribunal may admit the additional claim/ground.
8. We want to make it clear that the decision of Co-ordinate Bench of ITAT, Kolkata in REI Agro Ltd. vs. DCIT 144 ITD 141 (Kol-Trib) wherein it was held that it is only investment which yields dividend during the previous year that has to be considered while adjudicating the average value of investment for the purpose of rule 8D(2)(ii) and 8D(2)(iii) of IT Rules. The aforesaid view of Tribunal has been affirmed as correct by the Hon’ble Calcutta High court in GA No. 3581 of 2013 in the appeal against the order of the Tribunal in the case of REI Agro Ltd. supra. In addition to this, we note that if the assessee has its own funds and reserve which is more than investments made by the assessee then no disallowance is attracted u/s 14A read with Rule 8D(2)(ii) of the IT Rules, for that we rely on the judgment of Hon’ble Bombay High Court in the case of HDFC Bank Ltd. vs DCIT 383 ITR 529 (Bom). Therefore we direct the Assessing Officer to compute the disallowance after taking into account the aforesaid judicial precedents narrated above. Therefore, statistical purposes the appeal of the assessee is treated to be allowed.
Shekhavati Investments and Traders Ltd. Assessment Year:2014-15
In the result, the appeal of the assessee is allowed for statistical purposes in above terms.
Order pronounced in the Court on 15.05.2019