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Income Tax Appellate Tribunal, “SMC - B” BENCH : BANGALORE
Before: SHRI A.K. GARODIA
Date of hearing : 16.02.2017 Date of Pronouncement : 23.02.2017 O R D E R
This is an assessee’s appeal directed against the order of CIT (Appeals), Bengaluru-2, Bengaluru dated 10.06.2016 for the assessment year 2009-10.
The grounds raised by the assessee are as under:-
“1. The assessment order u/s. 143(3) passed by the learned Assessing Officer (AO) and the appellate order passed by the Honorable Commissioner of Income-tax (Appeals) Bengaluru-2, Bengaluru (The CIT(A)) are bad in law and are required to be set aside.
2. The AO erred in concluding and the CIT(A) erred in confirming, in the absence of any finding that any expense was incurred by the appellant which called for disallowance u/s 14A read with rule 8D which are not applicable in case of the appellant.
3. The CIT (A) and AO ought to have realized, after verification of books and records, that appellant has not paid any interest for funds used for its investments or incurred any other expenditure attributable to earning of exempted income and that dividend received is on investments made in earlier years and is out of its own source of funds and that expenditure in respect of capital gain income in the form of demat charges and security transaction tax are already disallowed in the computation. 4. The CIT (A) did not consider the written submission made on remand report of AO and the AO did not reply on grounds of appeal
made by the appellant before CIT (A) on which remand report was sought.
5. For these and other grounds that may be adduced at the time of hearing, the appellant prays that the assessment order passed by the AO and the appellate order passed by the CIT(A) may be set aside and this appeal may be allowed.”
None appeared on behalf of the assessee in spite of notice and hence, I proceed to dispose of this appeal of assessee ex parte qua the assessee.
The ld. DR of revenue supported the orders of authorities below. I have considered the submissions of ld. DR of revenue and gone through the orders of authorities below. I find that it is noted by the AO on page 4 of the assessment order that the average value in investment of assessee is Rs.18,82,45,892 and @ 0.5% of this average investment, the AO has worked out the disallowance as per Rule 8D(3) at Rs.9,41,230. Before that, the AO has noted that the assessee has received an amount of Rs.692.64 lakhs as dividend receipts which has been claimed as exempt. Copy of Profit & Loss account of assessee is available on page 4 of PB, as per which, the assessee has claimed deduction on account of ‘Establishment & Miscellaneous’ expenses of Rs.115.16 lakhs and hence, this is not a case of assessee that disallowance made by the AO on account of administrative expenses u/s. 14A as per rule 8D is more than the actual amount of such expenses debited by the assessee in the Profit & Loss account. In my considered opinion, the disallowance made by the AO and confirmed by the ld. CIT(Appeals) is in line with the provisions of section 14A and Rule 8D and therefore, I find no infirmity in the orders of authorities below on this issue. Hence, I decline to interfere in the order of ld. CIT (Appeals).
In the result, the appeal of assessee is dismissed.
Pronounced in the open court on this 23rd day of February, 2017.