Sequoia Energy & Environment Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 6, Pune

ITA 156/PUN/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5639 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 15-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D
• Section: 14A

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ प ु णे म ें । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपीऱ सं. / ITA No.156/PUN/2018 नििाारण वषा / Assessment Year : 2013-14 Sequoia Energy & Environment Pvt. Ltd., 781/5, Laxmi, Shivajinagar, Pune – 411004 PAN : AAJCS9441B .......अऩीऱाथी / Appellant बिाम / V/s. Dy. Commissioner of Income Tax, Circle – 6, Pune ......प्रत्यथी / Respondent Assessee by : N O N E Revenue by : Shri S.P. Walimbe स ु नवाई की तारीख / Date of Hearing : 14-12-2021 घोषणा की तारीख / Date of Pronouncement : 23-12-2021 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 04-07-2017 passed by the Commissioner of Income Tax (Appeals)-4, Pune [„CIT(A)‟] for assessment year 2013-14. 2. We find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent 2 ITA No.156/PUN/2018, A.Y. 2013-14 and set ex-parte. Therefore, we proceed to dispose of the appeal by hearing the ld. DR and perusing the material available on record. 3. The only issue is to be decided is as to whether the CIT(A) is justified in confirming the disallowance made by the AO u/s. 14A r.w. Rule 8D(2)(iii) of the Rules. 4. Heard ld. DR and perused the material available on record. We note that the assessee earned exempt income of Rs.7,34,172/- as dividend on mutual fund. The assessee was asked to furnish details of investments. On an examination of such details, the AO made disallowance under Rule 8D(2)(iii) to an extent of Rs.2,09,283/- being 0.5% of average of value of investment. We note that the assessee contended before the CIT(A) to restrict the disallowance under Rule 8D to those investments which yielded exempt income and worked out the disallowance as per Rule 8D(iii) at Rs.38,137/- being average value of investment at Rs.76,27,459/-. The CIT(A) discussed the issue in detail in the impugned order and confirmed the disallowance made by the AO on the ground that when the assessee had not made any disallowance u/s. 14A in respect of the expenses relatable to the exempt income earned the AO is correct in making disallowance under Rule 8D(2)(iii) of the Rules. We note that it is a settled principle being followed in restricting the disallowance by invoking the method provide under Rule 8D for the purpose of 14A to those investments which yielded exempt income. The ld. DR did not dispute that the assessee earned exempt income of Rs.7,34,172/- as recorded by the AO vide Para No. 5 of its order and the disallowance made by the AO by taking average value of investments which clearly shows that the disallowance made by the AO relates to those investments which did not yield any 3 ITA No.156/PUN/2018, A.Y. 2013-14 exempt income. Therefore, in our opinion, the disallowance made by the AO as confirmed by the CIT(A) is not justified. In view of the same, we deem it proper to remand the matter to the file of AO for its fresh verification and to restrict the disallowance to those investments which yielded exempted. The assessee is liberty to file evidences, if any, in support of its claim. The AO shall examine the same and pass the order in accordance with the discussion made here-in-above. Thus, the sole ground raised by the assessee is allowed for statistical purpose. 5. In the result, the appeal of assessee is allowed for statistical purpose. Order pronounced in the open court on 23 rd December, 2021. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 23 rd December, 2021. RK आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-4, Pune 4. The Pr. CIT-3, Pune 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, ऩ ु णे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइऱ / Guard File. //सत्यावऩत प्रतत// True Copy// आदेशान ु सार / BY ORDER, तनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune