AMJ Land Holdings Limited, Pune V. Assistant Commissioner of Income-tax, Circle - 10, Pune

ITA 228/PUN/2019

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 1180 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 10-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D
• Section: 14A

Judgement Text

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.228/PUN/2019 निर्धारण वषा / Assessment Year : 2014-15 AMJ Land Holdings Limited (Formerly known as Pudumjee Pulp & Paper Mills Ltd.) Thergaon, Pune – 411033 PAN: AABCP0310Q .......अऩीऱाथी / Appellant बिधम / V/s. The Asst. Commissioner of Income Tax, Circle 10, Pune ......प्रत्यथी / Respondent Assessee by : Shri Nikhil S Pathak Revenue by : Shri S.P. Walimbe स ु नवाई की तारीख / Date of Hearing : 13-07-2022 घोषणा की तारीख / Date of Pronouncement : 01-08-2022 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)-8, Pune, dated 04.01.2019 for the assessment year 2014-15. 2. Briefly, the facts of the case are as under: The appellant is a company engaged in the business of manufacturing and sale of pulp & paper. The return of income for the assessment year 2014-15 was filed on 26.03.2016 declaring total income of Rs.9,54,91,520/-. Against the said return of income, assessment was 2 ITA No.228/PUN/2019 AMJ Land Holdings Limited completed by the Assessing Officer (AO) after making disallowance u/s 14A read with rule 8D(3) of Rs.6,09,200/-. Being aggrieved by the above disallowance, an appeal was preferred before the CIT(A), who vide impugned order had confirmed the disallowance made by the AO. 3. Being aggrieved by the order of CIT(A), the appellant is before us in the present appeal contesting that for the purpose of computing the average value of investments, investments which yielded exempt income alone has to be considered. Thus, it was pleaded that the matter be remanded to the file of AO for the purpose of re-computation of disallowance under limb (iii) of rule 8D(2) by considering the value of investments which yielded the exempt income alone for the purpose of computing average value of investments. 4. We have heard the rival contentions and perused the materials available on record. The only issue that arises for consideration is manner of computing the amount of disallowance under sub clause (iii) of sub-rule (2) of Rule 8D of the Rule. The issue as regards to the applicability of provision of section 14A of the Act is not under challenge before us. The Hon’ble Special Bench of Income Tax Appellate Tribunal, Delhi in the case of Asstt. CIT Vs. Vireet Investment (P) Ltd., 188 TTJ (Del)(SB) 1 has held that while computing the amount of disallowance under sub clause (iii) of sub-rule (2) of Rule 8D of the Rule, the value of investment which yielded exempt income alone has to be considered for the purpose of arriving at average value of investment. On the similar lines, the decision of the Hon’ble Delhi High Court in the case of ACB India Ltd. Vs. Assistant Commissioner of Income Tax, 374 ITR 108 and the decision of the Madras High Court in the case of Marg Ltd. Vs. CIT, 318 CTR (Mad.) 148 and followed subsequently by the Hon’ble Madras High Court in the case of CIT 3 ITA No.228/PUN/2019 AMJ Land Holdings Limited Vs. Shriram Ownership Trust 318 CTR (Mad.) 233 and also by the Karnataka High Court in the case of Pragathi Krishna Gramin Bank Vs. Jt. CIT, 95 Taxman.com 41 (Kar.). 5. In light of the above decisions, we find merit in the submissions made on behalf of the appellant that the amount of investment which yielded exempt income alone should be taken into consideration for the purpose of arriving at average value of investment as envisaged under sub clause (iii) of sub-rule (2) of Rule 8D of the Rule. Accordingly, we restore the matter back to the file of Assessing Officer for the purpose of computing the amount of disallowance in the above mentioned manner. 6. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 1 st August, 2022. Sd/- Sd/- S.S.VISWANETHRA RAVI INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 1 st August, 2022 GCVSR आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A)-8, Pune; 4. The Pr.CIT-5, Pune 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩ ु णे “A” / DR ‘A’, ITAT, Pune; 6. गार्ड पाईऱ / Guard file. आदेशान ु सार / BY ORDER, //सत्यावऩत प्रतत// True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune