Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
Aforesaid appeal at the instance of the Department is directed against the order dated 5th November 2014, passed by the learned Commissioner (Appeals)–23, Mumbai, for assessment year 2009–10.
The only issue arising in the present appeal is in relation to partial relief granted by the learned Commissioner (Appeals) in respect of disallowance made by the Assessing Officer under section 14A r/w rule 8D(2)(ii).
2 Rare Enterprises 3. Brief facts are, the assessee a partnership firm is engaged in the business of trading in shares and securities. During the assessment proceedings, the Assessing Officer noticing that the assessee had earned dividend income of ` 1,68,931, which is claimed as exempt, called upon the assessee to explain why expenditure relating to earning of such exempt income should not be disallowed under section 14A in terms of rule 8D and not as computed by the assessee. Though, the assessee objected to disallowance proposed by the Assessing Officer, however, the Assessing Officer rejecting the objection of the assessee proceeded to reconcile the amount of ` 17,49,23,436 under section 14A r/w rule 8D. Assessee being aggrieved of such disallowance preferred an appeal before the first appellate authority.
The learned Commissioner (Appeals) after considering the submissions of the assessee restricted the disallowance of interest expenditure under rule 8D(2)(ii) to ` 5,78,84,254. As far as disallowance of administrative expenditure is concerned, the learned Commissioner (Appeals) observed since the assessee itself has made disallowance of ` 41,95,510, no further disallowance is to be made. Against the aforesaid order of the learned Commissioner (Appeals), the Department is in appeal before us.
At the outset, learned Authorised Representative submitted before us that against the order of the learned Commissioner
3 Rare Enterprises (Appeals), sustaining part disallowance of interest expenditure assessee had preferred appeal before the Tribunal and the Tribunal having found that the entire investment in shares has been held as stock–in–trade, has deleted the disallowance made sustained by the learned Commissioner (Appeals).
Learned Departmental Representative has not disputed the aforesaid contention of the assessee.
We have considered the submissions of the parties and perused the material available on record. As could be seen from the assessment order itself, the Assessing Officer has accepted that the entire investment in shares and securities is held as stock–in–trade by the assessee. Therefore, in view of the decision of the Hon'ble Jurisdictional High Court in India Advantage Securities Ltd., no disallowance can be made. Keeping in view the aforesaid proposition of law, the Tribunal, Mumbai Bench, while deciding assessee’s appeal for the very same assessment year has passed an order dated 4th August 2016, in and 56/Mum./2016, deleting the disallowance under section 14A r/w rule 8D sustained by the learned Commissioner (Appeals). In view of the aforesaid, we do not find any reason to interfere with the order of the learned Commissioner (Appeals) on this issue. Ground raised by the Department is dismissed.
4 Rare Enterprises
In the result, Department’s appeal is dismissed. Order pronounced in the open Court on 16.12.2016