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Income Tax Appellate Tribunal, “J”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI, 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)10, Mumbai dated 20/09/2016 for A.Y.2013-14 in the matter of order passed u/s.143(3) of the IT Act.
The only grievance of Revenue relates to CIT(A)’s direction for excluding investment in sister concern from average investment, while computing disallowance u/s.14A r.w. Rule 8D of the IT Act.
We have considered rival contentions and carefully gone through the orders of the authorities below. While completing scrutiny assessment, AO computed disallowance u/s.14A at Rs.86,37,817/- as per Rule 8D.
M/s. India Nivesh Ltd., 4. By the impugned order, CIT(A) directed the AO to exclude the investment in sister concern from the total investment while computing disallowance u/s.14A after having the following observation:- “4.2. I have carefully considered the facts of the case and the submissions of the ld. AR. I have also gone through the decisions relied on by the AO and the ld. AR. As seen from the facts of the case, there is no dispute with regard to applicability of sec.14A as the appellant itself has made an ad-hoc disallowance of expenses of Rs.4,07,876/- us/s 14A r.w.r.8D even though in the process he disallowed 20% of dividends received, on ad-hoc basis. The only dispute is with regard to working of quantum in the light of the Rule 8D. The Id. AR has brought to my notice the decision of the ITAT, in appellant's own case, which has set aside the order of A.Y.2009-10 for redoing after reducing the investments made in the sister concerns as the investment made in the sister concerns need not form part of the average investment. For A.Y.2011-12 also my Id. predecessor has allowed the claim of the appellant. Respectfully following the decision of the ITAT and my Id. predecessor, I hereby direct the AO to rework the disallowance after reducing the investments made in the sister concerns while arriving at the "average investment" as per the formula envisaged in Rule 8D(2). All other factors, however, will remain intact as per the original working of the AO, The ground is allowed for statistical purposes.”
We have considered rival contentions and found that issue under consideration is squarely covered by various judicial pronouncements as well as by the order of Tribunal in assessee’s own case and the CIT(A) has directed the AO to reduce the amount of investment in sister concern after following the order of the Tribunal in assessee’s own case. We do not find any infirmity in the order of CIT(A).