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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH AHMEDABAD
PER S. S. GODARA, JUDICIAL MEMBER
This assessee’s appeal for assessment year 2011-12 arises against the CIT(A)-VIII, Ahmedabad’s order dated 30.07.2014, passed in case no. CIT(A)(A)- VIII/DCIT/Cir.4/389/13-14, confirming disallowance/auditing amounts of Rs.5,31,308/- and Rs.3,27,470/- u/s.14A r.w.r 8D and that pertaining to business expenditure, respectively in proceedings u/s.143(3) of the Act.
ITA No. 2486/Ahd/14 [Indian Chronicle Ltd. vs. DCIT] - 2 - A.Y. 2011-2012
Heard both the parties. Case file perused
The assessee’s first substantive grievance seeks to plea Section 14A r.w.r. 8D disallowance pertaining to its exempt income in the nature of dividend amounting to Rs.1,45,69,186/-. There is no dispute that the Assessing Officer rejected its explanation inter alia pleading not to have borne any expenditure pertaining to above exempt income since having continued with investment already made in preceding assessment years. Its case therefore was that the impugned assessment year did not warrant such a disallowance. The Assessing Officer framed assessment in question on 29.01.2014 by invoking Section 14A r.w.r. 8D of the Income Tax Rules, 1962 to disallow the amount in question of Rs.5,66,896/-. The CIT(A) confirms the same.
Ld. Counsel Representative vehemently contend that the assessee is having sufficient interest free funds as per its share capital alongwith reserves and surplus in the relevant previous year. He therefore seeks to place reliance upon this tribunal co-ordinate bench’s order in ITA No.2647/Ahd/2012 decided on 07.02.2014 restricting an identical disallowance of Rs.1,00,000/- only in assessment year 2009- 10. We find no merit in the instant contention as the dispute here before us is qua correctness of administrative expenditure disallowance under rule 8D(2)(III) and not that of direct or indirect proportionate interest expenditure. There is no quarrel that Rule 8D is very much applicable as we are dealing with assessment year 2011- 12 i.e. well post assessment year 2008-09. We therefore, concur with both the lower authorities’ conclusion making the impugned disallowance. The assessee’s substantive grievance is accordingly rejected.
The assessee later substantive grievance challenges correctness of disallowance of administrative/managerial expenditure of Rs.5,31,308/- made in assessment order as affirmed in lower appellate proceedings. The assessee had sought to adjust the above interest against its income derived from fixed deposits on the ground that the same pertained to its overdraft head. It has come on record
ITA No. 2486/Ahd/14 [Indian Chronicle Ltd. vs. DCIT] - 3 - A.Y. 2011-2012
that the assessee has not carried out any business in the impugned assessment year as well as in preceding two assessment years. We notice that the CIT(A) has deleted an identical head on disallowance in his order dated 22.05.2013 in assessment year 2010-11. The same appears to have attained finality. So is the case in assessment year 2009-10 wherein above co-ordinate bench (supra) has accepted assessee’s identical contention on the ground that section 14A disallowance hereinabove involving identical interest expenditure took care of the instant head as well. Mr. Kabra fails to dispute all these developments in the intervening time period. We therefore accept assessee’s instant later substantive grievance to delete the impugned disallowance of Rs.3,27,470/-.
This assessee’s appeal is partly allowed.
[Pronounced in the open Court on this the 21st day of November, 2017.]
Sd/- Sd/- (N. K. BILLAIYA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 21/11/2017
Priti Yadav, Sr.PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद । True copy