FICHEM,AHMEDABAD V. THE DY.CIT, CIRCLE-2(1)(1) (PREVIUOSLY CIRCLE-6(1)), AHMEDABAD

ITA 1176/AHD/2024

AI Insights

The case involves M/s. Fichem appealing against the order of the Commissioner of Income Tax (Appeals), which confirmed a disallowance of Rs. 11,72,273 under Section 14A read with Rule 8D of the Income Tax Act. The disallowance was initially made by the Assessing Officer, who considered the entire expenditure debited in the Profit & Loss Account as non-allowable in the context of earning exempt income. The Tribunal, after reviewing the submissions and the financial details provided by the assessee, concluded that only a nominal disallowance of Rs. 2,000 was justified.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473826 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 16-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: WAGHE PRASAD RAO; S.R.
• Assessee Lawyers: PARIN SHAH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.1176/Ahd/2024 (Assessment Year: 2017-18) M/s. Fichem, ‘Sagar House’, Nr. Sahjanand Collage, Ambawadi, Ahmedabad-380015 Vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad [PAN No.AAAFF2065Q] (Appellant) .. (Respondent) Appellant by : Shri Parin Shah, A.R. Respondent by: Shri Waghe Prasad Rao, S.R.-DR Date of Hearing 16.10.2024 Date of Pronouncement 16.10.2024 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT (A), Thiruvanantpuram, vide order dated 29.04.2024 passed for A.Y. 2017-18. 2. The Assessee has taken the following grounds of appeal:- “1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeal) [‘the CIT(A)’] erred in confirming the disallowance amounting to Rs. 11,72,273/- made under section 14A of the Act by the Ld. Assessing Officer without considering the submission filed. 2. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing.” 3. Heard the arguments of both the parties and perused material on record. ITA No. 1176/Ahd/2024 M/s. Fichem vs. DCIT Asst.Year –2017-18 - 2– 4. The Assessing Officer disallowed Rs. 11,72,273/- under Section 14A r.w.r. 8D of the Act. It is an undisputed fact that the assessee has received dividend income of Rs. 8,266/- and Long Term Capital Gain (in short “LTCG”) of Rs. 23,45,857/-. The LTCG includes capital gain of Rs. 11,82,580/- from private equity fund which is liable to tax as per the provisions of Section 115U of the Act. 5. We find that the Assessing Officer disallowed the entire expenditure debited and claimed in Profit & Loss Account of Rs. 11,72,273/- in addition to the amount disallowed by the assessee to the tune of Rs. 3,68,675/-. The above facts reveal that the assessee had net dividend income of Rs. 8,266/- and net LTCG of Rs. 11,82,580/-. The LTCG of Rs. 11,63,267/- was earned on redemption of four Mutual Funds and keeping in view the exempt income added in the taxable income under Section 115U of the Act and the expenditure incurred by the assesseee. We held that disallowance of Rs. 2,000/- would suffice from the expenditure incurred in earning the exempt income in the interest of justice. 6. In the result, the appeal of the assessee is partly allowed. This Order is pronounced in the Open Court on 16/10/2024 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 16/10/2024 TANMAY, Sr. PS TRUE COPY ITA No. 1176/Ahd/2024 M/s. Fichem vs. DCIT Asst.Year –2017-18 - 3– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 16.10.2024 2. Date on which the typed draft is placed before the Dictating Member 16.10.2024 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 16.10.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement .10.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 17.10.2024 7. Date on which the file goes to the Bench Clerk 17.10.2024 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "