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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI AMARJIT SINGHShri Sanjay R. Parikh Shri M.C. Omi Ningshen, DR
PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 06.4.2016 is against the order of the CIT (A)-3, Mumbai dated 29.1.2016 for the assessment year 2012-2013. In this appeal, assessee raised the following grounds which read as under:- “Disallowance u/s 14A r.w.r 8D(2)(ii) of Rs. 7,90,685/-
On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in not adjudicating the main ground of the appellant that no disallowance was called for under section 14A r.w.r 8D(2)(ii) on account of indirect interest expenses and hence the disallowance made by the AO to the extent of Rs. 7,90,685/-.
The Ld CIT (A) erred in facts in law that the appellant did not borrow any money for the purpose of making investments yielding tax free income and also failed to appreciate that the appellant is cash rich company and has huge free reserves and surplus and paid up capital totalling to Rs. 70,46,86,451/- as against investment in current and non-current investments of Rs. 48,04,11,669/- hence no disallowance was called for u/s 14A r.w.r 8D(2)(ii) to the extent of Rs. 7,90,685/-.”
Briefly stated relevant facts of the case are that the assessee is engaged in the business of „manufacturing of ferrous and non-ferrous investment castings and generation of wind energy‟. Assessee filed the return of income declaring the total income of Rs. 10,24,88,251/-. Assessment was completed u/s 143(3) of the Act and the assessed income was determined at Rs. 10,45,58,263/-. In the assessment, AO made certain additions / disallowances which include disallowance u/s 14A r.w. Rule 8D(2)(ii) of the IT Rules, 1962. Aggrieved, assessee raised an appeal before the first appellate authority.
During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) partly allowed the appeal. Again aggrieved with the said decision of the CIT (A), assessee is in appeal before the Tribunal.
During the proceedings before us, at the outset, Ld Counsel for the assessee submitted that the disallowance made u/s 14A r.w. Rule 8D (2)(ii) of the Act is the subject matter of disallowance. Bringing our attention to the assessment order, Ld Counsel for the assessee submitted that the AO made disallowance under clause (ii) of the IT Rules, 1962 an amount of Rs. 14,49,846/-, which is the solitary issue to be adjudicated before the Tribunal in this appeal. On this issue, Ld Counsel for the assessee raised the argument that the AO and the CIT (A) failed to give finding of the fact that the assessee had sufficient interest free funds and also failed to comply with the judgment of the Hon‟ble juri ictional High Court in the case of CIT vs. भुंफई Mumbai; ददनांक 20.01.2017 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant 2. प्रत्मथी / The Respondent. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,
ITAT, Mumbai गार्ड पाईर / Guard file. 6. सत्मावऩत प्रनत ////
आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt.