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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘B’
Before: SHRI PRAMOD KUMAR & SHRI RAJPAL YADAV
आदेश/O R D E R PER PRAMOD KUMAR, ACCOUNTANT MEMBER
Present appeal is directed at the instance of assessee against order of ld.CIT(A)-9, Ahmedabad dated 29.5.2015 passed for Asstt.Year 2011-12.
Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming disallowance to the extent of Rs.16,59,173/- under section 14A of the Income Tax Act, 1961.
ITA No.2164/Ahd/2015 2 3. Brief facts of the case are that the assessee has filed its return of income on 29.9.2011 declaring total income at Rs.9,97,75,154/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Income Tax Act was issued on 23.8.2012 and thereafter a notice under section 142(1) was also issued on 1.7.2013, which was duly served upon the assessee. On scrutiny of the accounts, it revealed to the AO that assessee has earned dividend income of Rs.50,31,646/- which is exempt income. To the show cause notice issued by the AO as to why disallowance u/s.14A should not be made in view of huge investment, the assessee submitted that investment in shares and securities were not regular activities of the assessee and did not require much administrative activities. The said investments were made out of cash surplus and there was no borrowing to that effect. However, the assessee has suo moto disallowed administrative expenses to take care of requirement of section 14A read with Rule 8D. The ld.AO, however, did not accept these submissions of the assessee and proceeded to compute the disallowance u/s.14A r.w. Rule 8D and disallowed a further sum of Rs.16,59,173/-. In further appeal before the ld.CIT(A), the assessee could not succeed. Now assessee is before us.
At the threshold, the ld.counsel for the assessee submitted that when similar issue has risen in the Asstt.Years 2009-10 and 2010-11 the assessee went in appeal before the Tribunal, and the Tribunal in ITA No.s.1861/Ahd/2012 and 3101/Ahd/2013 vide order dated 31.8.2017 has deleted disallowance made by the Revenue and allowed the claim of the assessee, and therefore, the claim of the assessee in present assessment year may also be
ITA No.2164/Ahd/2015 3 allowed. The ld.counsel for the assessee has placed on record copy of the above order. The ld.DR though supported the orders of the Revenue authorities did not dispute above order of the Tribunal allowing similar claim of the assessee in the assessment year 2009-10- and 2010-12.
We have gone through the record and considered submissions of both the parties. We find that similar claim of assessee for the assessment years 2009-10 and 2010-11 was allowed by the Tribunal vide order cited supra. Relevant findings read as under:
“7. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee had suo motu disallowed proportionate interest expenses and administrative expenses. It is also true that the assessee has engaged the services of a Portfolio Manager and has disallowed the Portfolio Management Fees paid by it. It is also true that the assessee was having sufficient own funds to meet the investments in spite of this, the assessee has disallowed proportionate interest expenses which was not necessary. Be that as it may, it is now well settled that unless some error is pointed out in the disallowance made by the assessee, the A.O. cannot mechanically invoke the provisions of Section 14A read with Rule 8D of the Act and Rules. The A.O. has not pointed out any defect/error in the method of accounting employed by the assessee. Nor he has pointed out any error in the suo motu disallowance made by the assessee. Devoid of such findings, in our considered opinion, no further disallowance need to be made u/s. 14A read with Rule 8D of the Act.”
Since facts and circumstances being similar and no difference being pointed out by the Revenue in this behalf, we are not inclined to deviate ourselves from the view taken by the Co- ordinate Bench of the Tribunal in the order passed in the assessment year 2009-10 and 2010-11. Respectfully following
ITA No.2164/Ahd/2015 4 the same, we delete the impugned disallowance and allow the appeal of the assessee.
In the result, appeal of the assessee is allowed. Order pronounced in the Court on 27th October, 2017.
Sd/- Sd/- (RAJPAL YADAV) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 27/10/2017 आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण / DR, ITAT, 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad