Dilip Hari Amdekar, Pune V. Assistant Commissioner of Income-tax,

ITA 1709/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3204 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Assessee Lawyers: AMDEKAR
• Keywords: Earning of tax free income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1709/PUN/2016 / ASSESSMENT YEAR : 2009-10 DILIP HARI AMDEKAR, C/O. AMDEKAR & ASSOCIATES, FLAT NO.302, JAI RAVI APPT., CTS NO.1002/2/44, RAJENDRA NAGAR, BEHIND TENDULKAR JOGGING TRACK, NAVI PETH, PUNE 411 030 PAN : AAPPA3065J ....... / APPELLANT / V/S. THE ASTT. COMMISSIONER OF INCOME TAX, RANGE-3, PUNE / RESPONDENT ASSESSEE BY : SHRI S.H. AMDEKAR REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 18-06-2018 / DATE OF PRONOUNCEMENT : 14-08-2018 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-5, PUNE DATED 13-06-2016 FOR THE ASSESSMENT YEAR 2009-10 PASSED UN DER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE SOLITARY ISSUE RAISED BY THE ASSESSEE IN APPEAL IS AGAINST ADDITION OF RS.1,69,116/- U/S.14A READ WITH RULE 8D OF THE IN COME TAX RULES, 1962 SUSTAINED BY CIT(A). 2 ITA NO. 1709/PUN/2016, A.Y. 2009-10 3. SHRI S.H. AMDEKAR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF CHEMICALS AND IS ALSO ACTING AS COMMISSION AGENT. IN SCRUTINY ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.1,69 ,116/- U/S.14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS.1,63,53,895/-, FRO M INTEREST ON PPF, INTEREST ON RBI BONDS, INTEREST ON UTI BONDS AN D DIVIDEND. THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE IN EARNIN G EXEMPT INCOME NOR ANY BORROWED FUNDS WERE USED BY THE ASSESS EE FOR MAKING SUCH INVESTMENTS. THE ASSESSEE IS MAINTAINING SEPARATE B OOKS OF ACCOUNT FOR BUSINESS AND THE PERSONAL INVESTMENTS. TH E ASSESSEE HAS EARNED EXEMPT INCOME IN RESPECT OF THE INVESTMENTS IN PE RSONAL ACCOUNT. THUS, NO DISALLOWANCE U/S.14A R.W. RULE 8D IS WARR ANTED. THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT FOR INVOKING THE PROVISIONS OF RULE 8D, THE ASSESSING OFFICER HAS TO RECO RD SATISFACTION. IN THE CASE OF ASSESSEE, NO SUCH SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER BEFORE INVOKING THE PROV ISIONS OF RULE 8D. TO SUPPORT HIS SUBMISSIONS, LD. AUTHORIZED REPRESE NTATIVE PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1. GODREJ & BOYCE MANUFACTURING CO. 394 ITR 449 (SC) 2. MAXOPP INVESTMENT LTD. VS. CIT 247 CTR 162 (DELHI) 3. CIT VS. HERO CYCLE LTD. 323 ITR 518 (P&H) 4. ON THE OTHER HAND, DR. VIVEK AGGARWAL REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVE S OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS EARNED EXEMPT INCOME TO THE TUNE OF RS.1,63,53,895/-. THE ASSESSEE HAS NOT MADE 3 ITA NO. 1709/PUN/2016, A.Y. 2009-10 ANY SUO MOTO DISALLOWANCE FOR EARNING EXEMPT INCOME. THE ASSESSING OFFICER HAS MADE DISALLOWANCE UNDER RULE 8D(2)(III). THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENT EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE US TO SHOW THAT THE ASSESSEE IS MAINTAINING TWO S EPARATE PORTFOLIOS. THE ASSESSEE HAS EARNED SUBSTANTIAL AMOUNT O F INCOME EXEMPT FROM TAX. THE ASSESSING OFFICER IN A WELL REASONED O RDER HAS ONLY INVOKED CLAUSE (III) OF RULE 8D(2) TO MAKE DISALLOWANCE. NO DISALLOWANCE HAS BEEN MADE ON ACCOUNT OF INTEREST EXPEND ITURE. THE JUDGMENTS CITED BY THE LD. AUTHORISED REPRESENTATIVE OF A SSESSEE ARE DISTINGUISHABLE ON FACTS. WE DO NOT FIND ANY INFIRMITY IN THE IM PUGNED ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE APPEAL OF ASSESSEE IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 14 TH DAY OF AUGUST, 2018. SD/- SD/- (D. KARUNAKARA RAO) (VIKAS AWASTHY) ACCOUNTANT MEMBER JU DICIAL MEMBER / PUNE; / DATED : 14 TH AUGUST, 2018 SATISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)-5, PUNE 4. / THE PR.CIT-4, PUNE 5. , , $ , / DR, ITAT, B BENCH, PUNE. 6. ' / GUARD FILE. // // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY, , / ITAT, PUNE