Gujarat Gas Company Limited (Amalgamated with Gujarat Gas Limited), Ahmedabad V. DCIT, Gandhinagar Circle, Gandhinagar

ITA 2356/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3926 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 27-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, HONBLE JUDICIAL MEMBER AND SHRI WASEEM AHMED HONBLE ACCOUNTANT MEMBER ITA.NO.2356/AHD/2017 / ASSTT.YEAR : 2002-03 GUJARAT GAS COMPANY LTD. (AMALGAMATED WITH GUJARAT GAS LIMITED), 2, SHANTI SADAN SOCIETY OPP: PARIMAL GARDEN ELLISBRIDGE, AHMEDABAD 380 006. PAN : AAECG 8093 Q VS DCIT, GANDHINAGAR CIR. GANDHINAGAR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI BANDISH SOPARKAR, AR REVENUE BY : DILEEP KUMAR, SR.DR / DATE OF HEARING : 27/11/2019 / DATE OF PRONOUNCEMENT: 28/11/2019 !'/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A), GANDHINAGAR, DATED 30.8.2017 PASSED FOR THE ASSTT.Y EAR 2002-03. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.20,18,871/- UNDER SECTION 14A OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS FURTHER PLEADED THAT THE LD .CIT(A) HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B/C/D OF THE ACT. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD. THE LD.COUNSEL FOR THE ASSESSEE AT THE VER Y OUTSET POINTED OUT THAT ITA NO.2356/AHD/2017 2 ASSESSMENT YEAR INVOLVED IS A.Y.2002-03 I.E. A YEAR MUCH PRIOR TO APPLICABILITY OF RULE 8D FOR QUANTIFYING THE EXPENS ES REQUIRED TO BE DISALLOWED UNDER SECTION 14A OF THE ACT. HE FURTH ER POINTED OUT THAT ON THE BASIS OF EARLIER YEARS FINDING THE LD.CIT(A) HAS HE LD THAT EXPENSES ATTRIBUTABLE TO EARNING OF EXEMPT INCOME ARE TO BE QUANTIFIED AT 2% OF THE EXEMPT INCOME. IN THIS YEAR, THE TOTAL EXEMPT INCOME EARNED BY THE ASSESSEE IS RS.10.09 CRORES, AND ACCORDINGLY THE DISALLOWANCE HAS BEEN R ESTRICTED TO RS.20,18,871/- . IT HAS BEEN ALSO BROUGHT TO OUR NOTICE THAT THE LD.CIT(A) HAS FOLLOWED THE ORDER OF THE ITAT PASSED IN THE ASSTT.YEAR 2005-06, WHEREIN 2% OF EXEMPT INCOME WAS UPHELD FOR DISALLOWANCE. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT ORDER OF THE ITAT PASSED IN ITA NO.1950/AH D/2011 HAS BEEN UPHELD BY THE HONBLE GUJARAT HIGH COURT BY WHICH 2% OF TH E EXEMPT INCOME HAS BEEN UPHELD AS REASONABLE AMOUNT FOR ESTIMATED DISA LLOWANCE REQUIRED TO BE MADE UNDER SECTION 14A OF THE ACT. 4. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT SINCE THE LD.CIT(A) HAS FOLLOWED ORDE R OF THE ITAT, WHICH HAS BEEN UPHELD BY THE HONBLE HIGH COURT, AND THEREFOR E, THE ESTIMATED QUANTIFICATION OF 2% DISALLOWANCE WORKED OUT BY THE LD.CIT(A) ON THE STRENGTH OF ITATS ORDER DOES NOT CALL FOR ANY INT ERFERENCE. ACCORDINGLY, THIS GROUND OF APPEAL IS REJECTED. SO FAR AS CHARGING O F INTEREST IS CONCERNED, IT IS CONSEQUENTIAL IN NATURE. ACCORDINGLY, BOTH THE GRO UNDS ARE REJECTED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS REJECTE D. ORDER PRONOUNCED IN THE COURT ON 28 TH NOVEMBER, 2019 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 28/11/2019