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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश आदेश / ORDER आदेश आदेश
PER D. KARUNAKARA RAO, AM :
There are 2 appeals filed by the assessee under consideration involving assessment years 2009-10 and 2010-11. They are filed against two separate orders of CIT(A)-1, Pune, dated 04-02-2016 and 02-02-2016 for the said assessment years respectively.
We shall take up the appeal-wise adjudication as follows :
ITA No.1001/PUN/2016 (A.Y. 2009-10)
Before us, in connection with this appeal, Ld. Counsel for the
assessee filed a letter dated 21-02-2018 with the following request. The
same is extracted as under :
“........In this respect, we hereby submit that our company does not intend to press the above Appeal and hereby withdraws the above Appeal filed against order u/s.143(3) of the Income Tax Act, 1961 for Assessment Year 2009-10.”
On hearing both the parties, we find no reason to deny the
permission to withdraw the appeal. Accordingly, the appeal is
dismissed as ‘withdrawn’.
In the result, appeal of the assessee is dismissed.
ITA No.1002/PUN/2016 (A.Y. 2010-11)
Before us, Ld. Counsel for the assessee brought our attention to
the grounds and submitted that all the grounds relate to the
disallowance u/s.14A of the I.T. Act, 1961 on merits of the
disallowance/addition by the AO.
6.1 Giving brief facts, Ld. Counsel submitted that the assessee
earned exempt income from the mutual funds and worked out an
amount of Rs.26,36,226/- as expenditure attributable to the earning of
the same on pro-rata basis. The said amount was disallowed by the
assessee while filing the return of income. However, in the assessment,
the AO disallowed the additional sum of Rs.11,24,445/- taking total
disallowance to Rs.37,60,671/-. Otherwise, as per the assessee, the
disallowable sum as per the formula laid down in Rule 8D(2)(iii) of the
I.T. Rules, 1962 quantifies the disallowance at Rs.11,24,445/- only.
Despite the grievance of the assessee, there is omission on part of the
assessee to not raise this issue before the First Appellate Authority.
Therefore, there is no adjudication by the CIT(A) on this issue. Hence,
for the first time before us, assessee filed the following additional
ground and the same is extracted as under :
“The assessee submits that the actual disallowance as per rule 8D(iii) works out to Rs.11,24,445/- which is much lesser than the amount of Rs.26,36,226/- offered by the assessee in its return of income and hence, the AO, was not justified in making disallowance u/s.14A over and above, the amount offered by the assessee in its return.”
In this regard, Ld. Counsel for the assessee submitted that since
the matter was not adjudicated by the CIT(A), the issue raised in the
aforesaid additional aground may be admitted and remitted to the file of
AO for fresh adjudication for quantifying the disallowance in accordance
with the provisions of Rule 8D(iii) of the I.T. Rules, 1962. As per the
assessee, the disallowance as per the rules works out to Rs.11,24,445/-
and not Rs.37,60,671/- (Page 28 of the paper book) effectively added by
the AO at the end of the assessment.
On hearing both the parties, considering the prima-facie facts, we
find the additional ground raised by the assessee is required to be
admitted. From the facts, we find that the disallowance at
Rs.37,60,671/- is not in accordance with Rule 8D(2)(iii) of the I.T.
Rules, 1962. Therefore, AO is directed to apply the rule in correct
perspective and decide the issue afresh. AO shall take into cognizance
the fact of suo motu disallowance of Rs.26,36,226/- during the set-
aside proceedings. AO is directed to consider the disallowance already
made by the assessee in the return of income and apply the said
formula. Nevertheless, if assessee quantified the disallowance at a
higher figure, obviously, the said figure becomes disallowable.
Accordingly, the additional ground and the regular grounds raised by
the assessee in the appeal are set-aside to the file of the AO for fresh
adjudication. It goes without saying that AO shall grant reasonable
opportunity of being heard to the assessee in accordance with the set
principles of natural justice. Accordingly, the grounds and the
additional ground raised by the assessee are allowed for statistical
purposes.
In the result, appeal of the assessee is allowed for statistical
purposes.
To sum up, appeal of the assessee for A.Y. 2009-10 is dismissed
and the appeal of the assessee for A.Y. 2010-11 is allowed for statistical
purposes.
Order pronounced in the open court on this 21st day of February,
2018.
Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) �याियक सद�य �याियक सद�य /JUDICIAL MEMBER लेखा लेखा सद�य सद�य / ACCOUNTANT MEMBER �याियक �याियक सद�य सद�य लेखा लेखा सद�य सद�य
पुणे Pune; �दनांक Dated : 21st February, 2018 सतीश आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत
अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. 3. The CIT(A)-I, Pune 4. CIT-I, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B Bench” 5. Pune; गाड� फाईल / Guard file. 6. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune