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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Sri S.S. Godara& Sri M. Balaganesh]
order : July 11th,2018 ORDER Per S.S. Godara, JM :- This Revenue’s appeal for the assessment year 2009-10 challenges the correctness of the Commissioner of Income Tax (Appeals) – 17, Kolkata’s order (hereinafter the ‘CIT(A)’) order dated 12/12/2016 passed in case no. 199/CIT(A)- 17/Kol/14-15 reversing the Assessing Officer’s action invoking Section 14A of the Income Tax Act, 1961 (in short ‘Act’) r.w.r 8D(2)(ii) of the Income Tax Rules, 1962 (in short ‘Rules’) proportionate expenditure disallowance of Rs.34,23,594/- involving proceedings u/s 143(3) of the Act.
Learned departmental representative contends during the course of hearing that the CIT(A) has erred in law as well as on facts in deleting the impugned disallowance of Rs.34,23,594/- as made in the course of assessment regarding assessee’s exempt income from dividends amounting to Rs.8,52,575/-. We find no merit in Revenue’s instant sole grievance. It emerges that the assessee had made exempt investments in question of Rs.14,68,62,075/- as against its share capital of Rs.6,25,50,000/- on 31/03/2008 & 31/03/2009 as well as reserves of surplus of Rs.782,899,111/- and Rs.765,272,054/-; respectively. These interest free funds exceed assessee’s above stated exempt investments. We therefore quote hon’ble jurisdictional high court decision in the case of Principal Commissioner Of Income Tax vs Rasoi Limited being GA No. 633/2016, ITAT No. 109/2016, dt.
Assessment Year: 2009-10 M/s. Nagreeka Exports Limited 15/02/2017 holding that the impugned disallowance provision does not apply in case the concerned tax payer’s interest free funds are more than the exempt investment in question. The Revenue’s sole substantive grievance is declined accordingly.
This Revenue’s appeal is dismissed.