Shri Alin Ajaybhai Shah, Ahmedabad V. ITO, Ward-1(3)(1), Ahmedabad

ITA 1090/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7074 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-04-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Keywords: Rule 8D
• Section: 143(3); 14A

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1090/AHD/2018 ( ASSESSMENT YEAR : 2014-15) SHRI ALIN AJAYBHAI SHAH 502, PANCHKUVA DARWAJA, PANCHKUVA, AHMEDABAD 380001 / VS. INCOME TAX OFFICER WARD 1(3)(1), PRATYAKSH KAR BHAVAN, AMBAWADI, AHMEDABAD ./ ./ PAN/GIR NO. : ANYPS1085J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARDIK VORA, A.R. / RESPONDENT BY : SHRI S. S. SHUKLA, SR.DR DATE OF HEARING 31/03/2021 !'# / DATE OF PRONOUNCEMENT 07/04/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-10, AHMEDABAD (CIT(A) IN SHORT), DATED 26.02.2018 ARISING IN THE ASSESSMENT ORDER DATED 22.12.2016 PA SSED BY THE ITA NO. 1090/AHD/18 (SHRI ALIN AJAYBHAI SHAH VS. ITO) A.Y. 2014-15 - 2 - ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2014-15. 2. AS PER THE GROUNDS OF APPEAL, THE SOLITARY GRIEV ANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF RS.2,55,657/- T OWARDS ADMINISTRATIVE EXPENSES BY ADOPTING FORMULA PROVIDE D UNDER RULE 8D(2)(III) R.W.S. 14A OF THE ACT. THE AO APPLIED F ORMULA BEING ONE AND HALF PERCENT OF THE AVERAGE VALUE OF INVESTMENT , INCOME FROM WHICH DOES NOT FORM PART OF TOTAL INCOME AND WORKED OUT DISALLOWANCE OF RS.2,55,657/-. 3. IN THE COURSE OF HEARING BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT THE TOTAL EXPENDITURE INCURRED BY TH E ASSESSEE STANDS AT RS.91,535/- ONLY AND THEREFORE THE DISALLOWANCE CANNOT EXCEED THE TOTAL EXPENDITURE ACTUALLY INCURRED. WE STRAIG HTWAY FIND PRIMA FACIE MERIT IN THE PLEA OF THE ASSESSEE FOR RESTRICTING THE DISALLOWANCE TO RS.91,535/- IN SUBSTITUTION OF DISA LLOWANCE OF RS.2,55,657/- CARRIED OUT BY THE AO. IT IS TRITE T HAT ESTIMATED DISALLOWANCE UNDER S.14A READ WITH RULE 8D CANNOT E XCEED THE EXPENDITURE ACTUALLY CLAIMED FOR DEDUCTION. THE DI SALLOWANCE CAN NATURALLY BE MADE ONLY WHERE EXPENSES HAVE BEEN CLA IMED AS DEDUCTION AND NO DISALLOWANCE CAN BE MADE WHERE NO EXPENDITURE HAS BEEN CLAIMED. ACCORDINGLY, THE DISALLOWANCE IS RESTRICTED TO THE ITA NO. 1090/AHD/18 (SHRI ALIN AJAYBHAI SHAH VS. ITO) A.Y. 2014-15 - 3 - EXTENT OF ACTUAL EXPENDITURE INCURRED OF RS.91,535/ - AND ASSESSEE GETS RELIEF FOR THE REMAINING AMOUNT. 4. IN THE RESULT, THE CAPTIONED APPEAL OF THE ASSES SEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 07/04/2021 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED ON 07/04/2021