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Income Tax Appellate Tribunal, “G”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM
आदेश / O R D E R PER R.C.SHARMA (A.M):
This is an appeal filed by the Revenue against the order of CIT(A)-8, Mumbai dated 29/02/2016 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the IT Act.
The only grievance of Revenue relates to deleting disallowance made by AO u/s.14A of the IT Act.
At the outset, learned AR placed on record the order of the Tribunal in assessee’s own case for the A.Y.2008-09 wherein exactly similar issue was decided by the Tribunal in assessee’s favour. The precise observation of the Tribunal was as under:-
M/s. Smita Conductors Ltd., 4. We have considered the rival contention of the parties and gone through the orders of authorities below. We have noticed that the assessee earned dividend income of Rs.2,03,22,503/- and profit from partnership of Rs. 14,186/-which were claimed exempted by the assessee. The AO asked the assessee to furnish the details of the expenses incurred for earning exempt income. The assessee furnished its explanation along with the details of exempt income, profit and loss account and the balance sheet. The AO has not discussed in his order about the statement of account and the details of expenses incurred by the assessee, which was furnished before him during the assessment proceedings. The AO has not rejected the accounts filed by assessee. The AO invoked the provision of rule 8D for making disallowance u/s 14A. The AO disallowed Rs. 26,82,784/- under rule 8D(ii) and Rs. 6,01,991/-under rule 8D(iii). We have seen that assessee was having sufficient interest on the free fund available. The assessee had a reserve and surplus fund of Rs. 28,42,58,814/- as on 31st March 2008. The assessee made the investment of Rs. 17,01,81,310/ - in mutual funds during the year under consideration. Thus, keeping in view the fact and circumstances of the case, we deem it appropriate that a lump sum disallowance of Rs. 25,000/-under section 14A would meet the end of Justice. Hence the AO is directed to restrict the disallowance under section 14 A to Rs. 25,000/- . In the result this ground of appeal is partly allowed.
The facts and circumstances during the year under consideration are same and the CIT(A) has restricted the disallowance to the extent of Rs.3,94,092/- whereas disallowance upheld by the Tribunal in A.Y.2008- 09 was Rs.25,000/-. We do not find any reason to interfere in the order of CIT(A).