M/s. Mysore Holdings Private Limited, Bangalore V. Assistant Commissioner Of Income Tax, Circle- 4(1)(2), Bangalore

ITA 2479/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5221 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 03-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: Earning of tax free income; Rule 8D
• Section: 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 2479/BANG/2019 (ASSESSMENT YEAR: 2016 17) M/S. MYSORE HOLDINGS PRIVATE LIMITED, #26/1, 29 TH FLOOR, WORLD TRADE CENTRE, BRIGADE GATEWAY TOWERS, DR. RAJKUMAR ROAD, MALLESWARAM, - RAJAJINAGAR, BANGALORE - 560055 PAN : AAFCM1793C .. APPELLANT. VS. ACIT, CIRCLE 4 (1) (2), BANGALORE .. RESPONDENT. ASSESSEE BY : SHRI SUDHEENDRA B. R., C. A. REVENUE BY : SHRI MANJEET SINGH, ADDL. CIT DR DATE OF HEARING : 12.02.2020. DATE OF PRONOUNCEMENT : 20.02.2020. O R D E R PER A. K. GARODIA, A.M. : THIS APPEAL IS FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) 4, BANGALORE DT. 03.09.2019. 2. ALTHOUGH THE ASSESSEE HAS RAISED AS SEVERAL GROUNDS BUT THE GRIEVANCE IS ONLY ONE ABOUT DISALLOWANCE OF RS. 14.22 LACS U/S 14A. 3. IN COURSE OF HEARING, LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE AS PER PAGE 4 OF THE ASSESSMENT ORDER, THE TOTAL INVESTMENT BY THE ASSESSEE IS OF RS. 493.10 LACS AND AS PER THE BALANCE SHEET OF THE ASSESSEE AVAILABLE ON PAGE 44 OF THE PAPER BOOK, THE ASSESSEE WAS HAVING SHARE CAPITAL OF RS. 2288.43 LACS AT THE BEGINNING OF THE PRESENT YEAR AND RS. 4443.43 LACS AT THE END OF THE PRESENT YEAR IN ADDITION TO RESERVES AND SURPLUS OF RS. 2019.43 LACS AS ON 31.03.2016. HE PLACED RELIANCE ON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT 2 ITA NO. 2479 /BANG/2019 VS. MICROLABS LTD., 383 ITR 490 AND SUBMITTED THAT AS PER THIS JUDGMENT, IN THE FACTS OF THE PRESENT CASE, NO DISALLOWANCE IS CALLED FOR OUT OF INTEREST EXPENDITURE UNDER RULE 8D (2) (II). REGARDING DISALLOWANCE UNDER RULE 8D (2) (III) OUT OF ADMINISTRATIVE EXPENSES TO THE EXTENT OF 0.5% OF AVERAGE INVESTMENTS, HE PLACED RELIANCE ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF ACIT VS. VIREET INVESTMENT PVT. LTD., 165 ITD 27 AND SUBMITTED THAT AS PER THIS, THE DISALLOWANCE UNDER RULE 8D (2) (III), ONLY THOSE INVESTMENTS SHOULD BE CONSIDERED FOR CONSIDERING AVERAGE VALUE OF INVESTMENT WHICH YIELDED EXEMPT INCOME DURING THE YEAR. HE SUBMITTED THAT TO COMPUTE THE AMOUNT OF DISALLOWANCE UNDER RULE 8D (2) (III), THE MATTER MAY BE RESTORED TO AO FOR FRESH DECISION IN THE LIGHT OF THIS TRIBUNAL ORDER. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE AND ACCORDINGLY, WE DELETE THE DISALLOWANCE MADE BY THE AO UNDER RULE 8D (2) (II) AND FOR DISALLOWANCE UNDER RULE 8D (2) (III), WE RESTORE THE MATTER TO THE AO FOR FRESH DECISION IN THE LIGHT OF THIS TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. VIREET INVESTMENT PVT. LTD. (SUPRA). 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (ARUN KUMAR GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH FEBRUARY, 2020. /MS/ 3 ITA NO. 2479 /BANG/2019 COPY TO: 1. APPELLANT 4. CIT (A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNA L, BANGALORE.