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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER R.S. SYAL, VP :
These two appeals by the Revenue relate to the assessment
years 2012-13 and 2013-14. Since a common issue is raised in
these appeals, we are, therefore, proceeding to dispose them off by
this consolidated order for the sake of convenience.
The appeals are time barred by 3 days. The appellant had
submitted the reasons for the delay in presenting the appeals before
the Tribunal. We are satisfied with the reason so stated. We,
2 ITA Nos.332 & 333/PAN/2016 M/s. Manipal Finance Corporation Limited
therefore, condone the delay and admit the appeals for disposal on
merits.
A.Y. 2012-13 :
The first ground is against the deletion of addition made by the
Assessing Officer (AO) under section 14A of the Act.
Briefly stated, the facts of this ground are that the assessee earned exempt dividend income of Rs.2,82,640/- and offered suo motu disallowance u/s.14A at Rs.7,075/-. On a specific query, the
assessee failed to furnish the working of such disallowance. The
AO computed the disallowance under Rule 8D(2)(iii) at 0.5% of the
average value of investments towards such expenses at Rs.30,390/- (after allowing deduction for the amount suo motu offered by the
assessee). The ld. CIT(A) deleted the addition on the ground that
the AO failed to record any satisfaction.
Having heard the rival submissions and gone through the relevant material on record, it is seen that the assessee suo motu
offered disallowance at Rs.7,075/-. On a specific query, the
assessee failed to furnish any basis for working out the said
disallowance. The question of recording satisfaction as to the
inadequacy of the amount offered by the assessee towards
disallowance can arise only when the assessee furnishes the basis of
such disallowance. In the absence of any basis, the satisfaction as to
3 ITA Nos.332 & 333/PAN/2016 M/s. Manipal Finance Corporation Limited
the inadequacy of the amount has to be inferred and the AO has to
apply the mandate of Rule 8D, which he actually did in the instant
case. Since the disallowance has been made under Rule 8D(2)(iii)
at 0.5% of the average value of investments, which is in accordance
with the mandate of the Rule, we hold that no exception can be
taken to the view of the AO. The impugned order is, therefore, set-
aside and the ground is allowed.
The other grounds are against the deletion of addition of the
principal amount written back arising out of settlement of deposits,
debentures and debts as capital expenditure. The facts apropos this
issue are that the AO made disallowance of Rs.1,67,11,134/-
towards principal portion of deposits surrendered. The ld. CIT(A),
relying on the view taken in earlier years, allowed the assessee’s
claim.
Having heard both the sides and gone through the relevant
material on record, it is seen as an admitted position that the
Hon’ble Karnataka High Court has decided this issue in favour of
the assessee in its own case. The ld. DR submitted that the SLP
filed by the Department is still pending. In view of this, the law laid
down by the Hon’ble jurisdictional High Court in the case of the
assessee has to be applied and the pendency of SLP before the
4 ITA Nos.332 & 333/PAN/2016 M/s. Manipal Finance Corporation Limited
Hon’ble Supreme Court cannot change the situation. We, therefore,
affirm the view taken by the ld. CIT(A) on this issue.
In the result, the appeal is partly allowed.
A.Y. 2013-14 :
At the outset, the ld. AR submitted that the tax effect in this
appeal is less than Rs.50.00 lakh, which could not be controverted
by the Revenue.
The CBDT has issued circular No.17/2019 dated
08-08-2019 revising upward the monetary limits for filing of
appeals by the Department in Income-tax Cases before various
appellate forums. The earlier circular No.03/2018 dated 11-07-2018
fixed monetary limit for filing of appeals by the Revenue before the
Tribunal at Rs.20.00 lakh. Such limit has now been enhanced in the
recent Circular dated 08-08-2019 to Rs.50.00 lakh. Since tax effect
in the appeal under consideration is stated to be Rs.19.06 lakh,
which is less than the revised monetary limit of Rs.50.00 lakh, we
are not inclined to entertain this appeal. However, later on, if it is
found that the tax effect is more than the monetary limit of Rs.50.00
lakh, the Department is at liberty to move application for restoration
of the appeal.
5 ITA Nos.332 & 333/PAN/2016 M/s. Manipal Finance Corporation Limited
In the result, the appeal is dismissed.
Order pronounced in the Open Court on 04th July, 2023.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 04th July, 2023 सतीश
आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The respondent 2. 3. The Pr.CIT concerned 4. DR, ITAT, Panaji Bench, Panaji गाड� फाईल / Guard file. 5.
आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
6 ITA Nos.332 & 333/PAN/2016 M/s. Manipal Finance Corporation Limited
Date 1. Draft dictated on 03-07-2023 Sr.PS 2. Draft placed before author 04-07-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *