Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI B.R. BASKARAN & SHRI VIKAS AWASTHY
आदेश /O R D E R
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The appeal filed by the assessee is directed against the order dated 27.09.2013, passed by Ld. Commissioner of Income Tax (Appeals)-I, Chennai and it relates to assessment year 2007-
The only issue raised in the appeal relates to disallowance confirmed by the Ld. CIT(Appeals) under Section 14A of the Income-tax Act, 1961 (in short 'the Act').
The Ld.counsel appearing for the assessee submitted that the assessee had earned dividend income of `1,15,774/-. The Assessing Officer computed the disallowance in terms of Rule 8D of Income-tax Rules, 1962 though the same shall not be applicable for the year under consideration. However, the Ld. CIT(Appeals) has sustained the disallowance without appreciating the fact that the provisions of Rule 8D are not applicable for assessment year 2007-
8. The Ld. counsel placed reliance on the decision rendered by the co-ordinate Bench of this Tribunal in the case of ACIT v. The Nungambakkam Saswatha Dhana Rakshaka Nidhi Ltd. in by order dated 05.08.2013 and submitted that the co-ordinate Bench has held that the disallowance under Section 14A should be made at 2% of the dividend income. Accordingly, he prayed that the disallowance under Section 14A should be restricted to that extent only.
We heard the submissions of Ld. D.R. We also notice that the Hon'ble Madras High Court has also held in the case of M/s Simpson & Co. Ltd. v. DCIT in Tax Case (Appeal) No.2621 of 2006 dated 15.10.2012 that the disallowance made to the extent of 2% of the dividend income under Section 14A is reasonable in the year in which Rule 8D is not applicable. In view of this, we set aside the
In the result, the appeal filed by the assessee is allowed.
Order pronounced in open court after conclusion of hearing on the 22nd day of January, 2015 at Chennai.