ESSAR PROPERTIES LTD,MUMBAI vs. DCIT 5(1), MUMBAI

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ITA 423/MUM/2015Status: DisposedITAT Mumbai19 July 2016AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance under Section 14A read with Rule 8D cannot exceed the exempt income earned by the assessee. The Assessing Officer was directed to restrict the disallowance accordingly.

What were the facts?

The assessee earned exempt income of Rs. 1,32,433/-. The Assessing Officer disallowed Rs. 12,28,308/- under Section 14A read with Rule 8D, which was confirmed by the CIT(A).

What were the issues?

Whether the disallowance of expenditure under Section 14A read with Rule 8D can exceed the amount of exempt income earned.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI SANJAY GARG

For Appellant: Shri Vijay Mehta / Anuj
For Respondent: Shri K. Ravikiran, Sr. AR
Hearing: 19.07.2016Pronounced: 19.07.2016

सुनवाई की तायीख / Date of Hearing : 19.07.2016 घोषणा की तायीख /Date of Pronouncement : 19.07.2016 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 16.01.2015 is against the order of the CIT (A)-9, Mumbai dated 28.10.2014 for the assessment year 2009-2010. In this appeal, assessee raised the following ground which reads as under:- “The CIT (A) erred in confirming the disallowance u/s 14A read with Rule 8D made by the AO of Rs. 12,28,308/-.”

2. The only issue raised by the assessee in this appeal relates to the disallowance of expenditure u/s 14A r.w. Rule 8D2(iii) of the IT Rules, 1962. Narrating the facts of the case, Ld Counsel for the assessee mentioned that the assessee earned exempt income amounting to Rs. 1,32,433/-. He submitted that the Assessing Officer quantified the disallowance under the said provisions of Rule 8D at Rs. 12,28,308/-, which is equivalent of all the debits in P & L Account. Bringing our attention to various binding decisions on the subject, Ld Counsel for the assessee demonstrated that the disallowance u/s 14A of the Act under the above factual matrix should not exceed the foresaid exempt income of Rs. 1,32,433/-. In support

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