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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश आदेश / ORDER आदेश आदेश
PER VIKAS AWASTHY, JM :
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-5, Pune dated 13-06-2016 for the assessment year 2009-10 passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The solitary issue raised by the assessee in appeal is against addition of Rs.1,69,116/- u/s.14A read with Rule 8D of the Income Tax Rules, 1962 sustained by CIT(A).
2 ITA No. 1709/PUN/2016, A.Y. 2009-10
Shri S.H. Amdekar appearing on behalf of the assessee
submitted that the assessee is engaged in manufacturing of chemicals
and is also acting as commission agent. In scrutiny assessment
proceedings, the Assessing Officer made disallowance of Rs.1,69,116/-
u/s.14A read with Rule 8D of the Income Tax Rules, 1962. The
assessee has earned exempt income of Rs.1,63,53,895/-, from interest
on PPF, interest on RBI Bonds, interest on UTI bonds and dividend.
The assessee has not incurred any expenditure in earning exempt
income nor any borrowed funds were used by the assessee for making
such investments. The assessee is maintaining separate books of
account for business and the personal investments. The assessee has
earned exempt income in respect of the investments in personal
account. Thus, no disallowance u/s.14A r.w. Rule 8D is warranted.
The ld. Authorized Representative further submitted that for invoking
the provisions of Rule 8D, the Assessing Officer has to record
satisfaction. In the case of assessee, no such satisfaction has been
recorded by the Assessing Officer before invoking the provisions of
Rule 8D. To support his submissions, ld. Authorized Representative
placed reliance on the following decisions :
Godrej & Boyce Manufacturing Co. 394 ITR 449 (SC) 2. Maxopp Investment Ltd. Vs. CIT 247 CTR 162 (Delhi) 3. CIT Vs. Hero Cycle Ltd. 323 ITR 518 (P&H)
On the other hand, Dr. Vivek Aggarwal representing the
Department vehemently defended the impugned order and prayed for
dismissing the appeal of assessee.
We have heard the submissions made by representatives of rival
sides and have perused the orders of the authorities below. A perusal
of the assessment order shows that the assessee has earned exempt
income to the tune of Rs.1,63,53,895/-. The assessee has not made
3 ITA No. 1709/PUN/2016, A.Y. 2009-10
any suo moto disallowance for earning exempt income. The Assessing
Officer has made disallowance under Rule 8D(2)(iii). The assessee has not furnished any document either before the authorities below or
before us to show that the assessee is maintaining two separate
portfolios. The assessee has earned substantial amount of income
exempt from tax. The Assessing Officer in a well reasoned order has only invoked clause (iii) of Rule 8D(2) to make disallowance. No
disallowance has been made on account of interest expenditure. The
judgments cited by the ld. Authorised Representative of assessee are
distinguishable on facts. We do not find any infirmity in the impugned order. Accordingly, the same is upheld and the appeal of assessee is
dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced on Tuesday, the 14th day of August, 2018.
Sd/- Sd/- (D. KARUNAKARA RAO) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 14th August, 2018 Satish
आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. आयकर आयु� (अपील) / The CIT(A)-5, Pune 3. आयकर आयु� / The Pr.CIT-4, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
//स�यािपत �ित // आदेशानुसार / BY ORDER,
// True Copy // Senior Private Secretary, आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune