BHARAT FORGE LTD. vs. DEPUTY COMMISSIONER OF INCOME-TAX,

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.

ITA No.1001/PUN/2016 (A.Y. 2009-10)

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.”

permission to withdraw the appeal. Accordingly, the appeal is

dismissed as ‘withdrawn’.

ITA No.1002/PUN/2016 (A.Y. 2010-11)

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.”

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.

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.

purposes.

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