ACIT,CIRCLE-3, NAINITAL vs. THE NAINITAL BANK LTD, NAINITAL

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ITA 2773/DEL/2018Status: DisposedITAT Dehradun15 December 2022AY 2014-153 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal affirmed the decision of the CIT(A) to delete the addition. It was held that the assessee had sufficient own funds, and the financial position had not been disputed by the revenue authorities.

What were the facts?

The Revenue appealed the deletion of an addition made under Section 14A. The assessee, a bank, had made significant investments in securities and tax-free bonds. The Assessing Officer made a further disallowance of expenses related to these investments.

What were the issues?

Whether the expenses relatable to income not includible in total income were correctly disallowed under Section 14A, considering the assessee's own funds.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN BENCH ‘DB’, DEHRADUN

Before: Dr. B. R. R. KumarSh. Yogesh Kumar US

For Appellant: Adv. &
For Respondent: Smt. Mayank Prabha Tomar, Sr. DR
Hearing: 14.12.2022Pronounced: 16.12.2022

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the Revenue against the order of the ld. CIT(A), Haldwani dated 11.01.2018.

2.

The revenue has raised the following grounds of appeal:

“1. That Ld. CIT(A) has erred in law as well as in facts of the case, in deleting the addition made u/s 14A of the IT Act, 1961 read with Rule 8D of the IT Rules, 1962, being expenses relatable to income not includible in total income.

2. That ld CIT(A) has erred in law as well as in facts of the case in not considering that investment was made by the assessee in tax free securities/ funds, mostly out of its tax bearing fund.

3. That ld CIT(A) has erred in law as well as in facts of the case, in not considering that the assessee failed

to establish the quantum of its tax bearing fund as well as tax free fund, which were invested in tax free securities/ funds.”

3.

At the outset, it was brought to our notice by both the parties that the issue involved in the instant case is covered by the decision of the coordinate bench in assessee’s own case for Assessment Year 2010-11 in ITA No. 5017/Del/2017. For the sake of ready reference, the relevant part of the order is reproduced as under:

Addition u/s 14A:

“2. During the hearing, the assessee has made investment of Rs.706,65,02,000/- in various securities/ shares and Rs.82,10,60,336/- in mutual funds & other tax free bonds. The assessee has made disallowance of Rs.42,19,826/- u/s 14A of the Income Tax Act, 1961 being expenses relatable to the income not includible in the total income as per the computation of total income. The AO made further disallowance of Rs.4,14,60,879/-.

3. The ld. CIT (A) deleted the addition based on the decision of the Tribunal in the assessee’s own case for the assessment years 2003-04, 2004-05 and 2005-06 in & 4987/Del/2007 and in ITA No. 260/Del/2007. Further, in ITA No. 3510/Del/2008 for the assessment year 2005-06, the Co-ordinate Bench of the Tribunal after going through the financial position of the assessee gave a categorical finding that the assessee has got sufficient own funds in the form of share capital, Reserves & Surplus. The financial position has not been disputed by the revenue authorities during the instant year.”

4.

Hence, in the absence of any change in the facts of the case and legal proposition, we affirm the decision of the ld. CIT (A) which was based on the considered decision of the ITAT.

5.

In the result, the appeal of the revenue is dismissed. Order Pronounced in the Open Court on 16/12/2022.

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