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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI PRADIP KUMAR KEDIA
आदेश/O R D E R
PER PRADIP KUMAR KEDIA, AM:
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-28, New Delhi (‘CIT(A)’ in short), dated 16.10.2017 under 143(3) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2013-14.
As per its grounds of appeal
the assessee has challenged the disallowance of Rs.96,85,003/- made by the AO u/s. 14A r.w.r. 8D of the ITAT Rules.
3. When the matter was called for hearing, the Ld. Counsel for the assessee pointed out that the assessee has moved additional ground of appeal under Rule 11 of the IT Rules (Income Tax ITAT Rules, 1963) whereby as per ground No.5 therein the assessee has sought relief from disallowance u/s. 14A on the ground that only those investment are to be considered for concluding average value of investment which yielded exempt income during the year. It was submitted that the issue involved is purely legal in nature and arises from the facts on record and consequently urged for its admission and disposal at the threshold. Considering the force in the submissions made by the assessee for admission of the additional grounds, we admit the additional grounds for adjudication.
4. We have considered the rival submissions on the issue involved and have perused the orders of the lower authorities. As per the additional ground No.5 of the assessee’s appeal, the assessee has contended having regard to the judicial interpretation for the purposes of disallowance u/s.14A r.w.r. 8D of the Act, the investments which did not yield any exempt income during the year are required to be excluded and only those investment are to be considered for average value of investment which yield exempt income during the year. We find that the aforesaid proposition is duly supported by the decision of the Special Bench in ACIT Vs. Vireet Investment Private Limited (2017) 165 ITD 27 (Del) (SB). Similar view has been expressed by coordinate Benches including Shiv Narayan Nemani Shares and Stock Brokers (P) Ltd. Vs. CIT (2021) 132 taxmann.com 244 (Mumbai). The additional ground is accordingly adjudicated in favour of the assessee.
It was submitted on behalf of the assessee that once the ground No.5 of the additional ground of appeal
is adjudicated in favour of the assessee, the grievance raised as per other grounds in the appeal memo and the additional ground memo ceases to exist. Hence, in view of the submissions made on behalf of the assessee, other grounds concerning other aspects of disallowances u/s.14A are dismissed as infructuous.
6. The order of the CIT(A) is set aside and the matter is restored back to the file of the AO for quantification of the disallowance under s.14A qua the investments which have yield tax free income alone.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
8. The above decision was pronounced on conclusion of virtual hearing in the open court on 23/12/2021.