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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER:
These appeals are filed by the assessee against the orders passed by the learned Commissioner of Income Tax (Appeals)-1, Madurai, all dated 04.04.2016 in for the assessment year 2010-11 and ITA No.176/2015-16 for the assessment year 2011-12 both passed U/s.250(6) r.w.s. 263 & 143(3) of the Act. Thereafter in the appellate proceedings before the Tribunal the appeals were disposed off vide order dated 14.07.2017. Subsequently the miscellaneous petitions No.285 & the order of the Tribunal in order to adjudicate the ground with respect to the disallowance U/s.14A r.w.r. 8D of the Rules for the assessment years 2010-11 & 2011-12 because the ground raised by the assesse was left out to be adjudicated on the earlier occasion.
At the outset the Ld.AR submitted before us that in both the above mentioned assessment years the Ld.AO had invoked the provisions of Section 14A of the Act and computed the disallowance by applying Rule 8D of the Rules which the Ld.CIT(A) has confirmed. He further submitted that predominantly the investments were made in sister companies of the assessee company from the assessee’s own non-interest bearing funds and therefore provisions of Section 14A will not be applicable in the case of the assessee. Hence it was pleaded that the matter may be remitted back to the file of Ld.AO for fresh consideration.
The Ld.DR could not controvert to the submission made by the Ld.AR though she vehemently argued in support of the Orders of the Ld.Revenue Authorities.
3 & 1877/CHNY/2016 4. We have heard the rival submissions and carefully perused the materials on record. On several earlier occasions we have held that if the assessee has made investment in shares of its sister companies for earning exempt income out of its own non- interest bearing funds then provisions of Section 14A will not be applicable because there would be no cost attributable for making investment in one’s own concern. Further we find that the Ld.AO has not made a finding as to whether any cost is attributable for earning exempt income in the case of the assessee in order to invoke the provisions of Section 14A and Rule 8D of the Rules. Therefore in the interest of justice, we hereby remit back the matter to the file of Ld.AO for fresh consideration for both the assessment years.
In the result, the appeals of the assessee for both the assessment years are allowed for statistical purposes.
Order pronounced on the 14th February, 2018 at Chennai.