Kashinath Revappa Dhole, Solapur V. Addl. Commissioner of Income Tax , Range -1, Solapur

ITA 1278/PUN/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0615 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 10; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE – VIRTUAL COURT BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1278/PUN/2018 िनधाᭅरण वषᭅ / Assessment Year: 2007-08 Kashinath Revappa Dhole, E-19, MIDC, Akkalkot Road, Solapur- 413006. PAN : AAACK7429C Vs. Addl. CIT, Range-1, Solapur. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-9, Pune [‘CIT(A)’ for short] dated 25.05.2018 for the assessment year 2007-08. 2. The only issue in the present appeal relates to the disallowance of Rs.3,75,865/- u/s 14A of the Income Tax Act, 1961 (‘the Act’). 3. Briefly, the facts of the case are as under :- During the previous year relevant to the assessment year under consideration, the appellant earned income from PPF, RBI tax free Assessee by : None Revenue by : Shri M. G. Jasnani Date of hearing : 05.01.2022 Date of pronouncement : 05.01.2022 ITA No.1278/PUN/2018 2 bonds etc, which are claimed as exempt income under the provisions of section 10 of the Act. It is asserted before the Assessing Officer that no expenditure was incurred to earn the exempt income. The Assessing Officer rejecting the above contention made disallowance of expenditure at the rate of 7.5% from the exempt income, which comes to Rs.3,75,865/- u/s 14A of the Act. Even on appeal before the ld. CIT(A), the same was confirmed. 4. Being aggrieved, the appellant is before us in the present appeal. 5. Before us, when the appeal was called on, none appeared on behalf of the appellant despite due service of notice, therefore, we proceed to decide the issue ex-parte after hearing the ld. CIT-DR. The only issue in the present appeal relates to the disallowance of expenditure to earn the exempt income under the provisions of section 14A of the Act prior to insertion of Rule 8D of the Income Tax Rules, 1962. Now, it is settled position of law that expenditure at the rate of 2% of the exempt income is held to be reasonable to earn the exempt income. Accordingly, we direct the Assessing Officer to disallow the expenditure at the rate of 2% of exempt ITA No.1278/PUN/2018 3 income. Thus, the issue raised in the grounds of appeal stands partly allowed. 6. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 05 th day of January, 2022. Sd/- Sd/- (RAVISH SOOD) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 05 th January, 2022. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-9, Pune. 4. The Pr. CIT-6, Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.