DILIP HARI AMDEKAR,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX,

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’).

2 ITA No. 1709/PUN/2016, A.Y. 2009-10

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 :

Department vehemently defended the impugned order and prayed for

dismissing the appeal of assessee.

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.

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