ACIT, ROHTAK vs. M/S. HARYANA GRAMIN BANK, ROHTAK

Assessee by :Sh.Robin Rawal, Sr. DR Respondent by:Sh Naveen Kumar Goyal, CA Date of Hearing 08/01/2016 Date of pronouncement 07/03/2016 O R D E R PER PRASHANT MAHARISHI, A. M. This appeal filed by the Department against the order dated 22.11.2013 of 1. learned Commissioner of Income-tax (Appeals), Rohtak for the Assessment Year 2010-11. The only ground of appeal is the disallowance u/s 14A of the Income Tax Act 2. of Rs.9146980/- deleted by the learned Commissioner of Income-tax (Appeals). The brief facts are that the assessee filed return of income declared total 3. income of Rs.583929411/- on 20.09.2010. The assessee has earned exempt income of Rs.9201123.53 during the year and the assessee submitted a revised computation of income showing that the exempt income is Rs.11838675/- for the reason that loss on sale of mutual fund of Rs. 2637551/- has been deducted from the dividend income. On 21.11.2012 AO asked the assessee to furnish details of expenditure relating to exempt income as disallowance was show by assessee to be NIL. Therefore the AO applied Page 2 of 3 proportionate method and disallowed Rs. 9146980/- u/s 14A of the Act. Against this assessee carried the matter before the learned Commissioner of Income-tax (Appeals), who deleted the addition. At the time of allowing the appeal of the assessee revised computation of income where assessee has changed the total income from Rs. 583879411/- to Rs. 5138860/-. The computation of calculation of expenses disallowable u/s 14A was also submitted which shows NIL expenditure and therefore disallowance u/s 14A was deleted by CIT (A). Therefore revenue is in appeal. Before us the ld AR submitted that there is no satisfaction recorded by the 4. AO and the manner of disallowance is ad hoc basis by the AO and therefore learned Commissioner of Income-tax (Appeals) on consideration of this fact has deleted the addition.

5. The ld DR submitted that the computation made by the assessee is incorrect as it does not have average value of investments and therefore it needs verification. We have carefully considered the rival contention we find that the AO has 6. not recorded any finding about the expenses incurred by the assessee for exempt income shown at NIL. Further the calculation of expenses submitted by the assessee prima facie 7. does not show that how average value of investment can be NIL. These facts require verification from the side of revenue. If the average value of investment is NIL then the computation of disallowance made by the assessee may be correct. Before us neither the ld DR nor the ld AR of the assessee submitted any details about the working of Rule 14A and relevant documents as the balance sheet etc of the assessee. The learned