Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “B” MUMBAI
Before: SHRI JOGINDER SINGH & SHRI N.K. PRADHAN
ORDER PER N.K.PRADHAN, AM:
This is an appeal filed by the assessee. The relevant assessment year is 2010-11. It is directed against the order of Commissioner of Income Tax (Appeals)-8, Mumbai and arises out of the order u/s. 143(3) of the Income Tax Act, 1961 (‘the Act’).
The sole ground in this appeal is that the ld. CIT(A) erred in confirming the action of the AO in disallowing a further sum of Rs. 5,52,896/- u/s 14 A of the Act by invoking rule 8 D, without giving any findings that why the expenses voluntarily disallowed by the appellant u/s 14A amounting to Rs 3, 98,966/- is not accepted. Also it is stated that ld. CIT(A) erred in confirming the action of the AO in not appreciating the fact that the shares held as stock-in-trade is not to be considered while computing disallowance under rule 8D.
The Assessing Officer (AO) noticed that the assessee has earned dividend income of Rs. 1,01,01,957/- and claimed the same as exempt. The AO applied rule 8D and arrived at a gross disallowance of Rs. 9,51,862/-. The assessee had voluntarily disallowed Rs.3,98,966/- u/s 14A of the Act. The AO thus made a net disallowance of Rs. 5,52,896/-
The ld CIT(A) followed the order of his predecessor-in-office for A.Y. 2008-09 and upheld the addition made by the AO.
The ld. Counsel of the assessee relied on the order in the case of DCIT vs. M/s India Advantage Securities Ltd for the A.Y. 2008-09 by the ITAT, Mumbai (ITA No : 6711/Mum/2011) and the subsequent judgement of the Hon’ble Bombay High Court (ITA No. 1131 of 2013) wherein the deletion by the CIT (A) of disallowance u/s 14A computed by the AO in relation to stock-in-trade has been upheld.
The ld. DR supported the order passed by the ld CIT(A).
We have considered the rival submission and perused the relevant material on record. We find that the decision in the case of M/s India Advantage Securities Ltd (supra) is squarely applicable to the instant case. The ld. Counsel of the assessee has not filed the details in respect of stock-in-trade before us. Therefore, we set aside the order of the ld. CIT(A) and restore it to the file of the AO to decide the case afresh as per the decision in the case of M/s India Advantage Securities Ltd (supra). The AO is directed to give a reasonable opportunity of being heard to the assessee.
In the result, the appeal is allowed for statistical purpose.