Niraj Kumar Associates Pvt.Ltd, Pashan V. Assistant Commissioner of Income-tax, Circle - 2, Pune

ITA 2565/PUN/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2263 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D
• Section: 143(3); 14A

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपीऱ सं. / ITA No.2565/PUN/2017 ननधधारण वषा / Assessment Year : 2013-14 Niraj Kumar Associates Pvt. Ltd., 129/2, Mont Vert Marc, Pashan-Sus Road, Pashan – 411 021 PAN : AAACN6424G .......अपऩलधथी / Appellant बनधम / V/s. ACIT, 2, Pune ......प्रत्यथी / Respondent Assessee by : Shri Pramod S. Shingte Revenue by : Shri S. P. Walimbe सपनवधई की तधरऩख / Date of Hearing : 05.05.2022 घोषणध की तधरऩख / Date of Pronouncement : 13.05.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This assessee’s appeal for A.Y. 2013-14 is directed against the CIT(A), Pune’s order dated 31/08/2017 passed in case No.ITBA/APL/S/250/2017- 18/1006031785(1) involving proceeding u/s. 143(3) of the Income Tax Act, 1961 ; in short "the Act. Heard both the parties. Case file perused. 2. Coming to the assessee’s sole substantive grievance raised in the instant appeal that both the learned lower authorities have erred in law and 2 ITA No.2465/PUN/2017 Niraj Kumar Associates Pvt. Ltd., on facts in making Section 14A r.w. rule 8D disallowance, we note that the Assessing Officer had computed proportionate interest and administration expenditure sums of Rs.64,19,226/- and Rs.9,64,083/-; respectively totaling to Rs.73,83,309/-. The CIT(A) has enhanced the same to the extent of Rs.1,40,88,702/- thereby holding that it is not the average value of net investment involving credit and debit balances but average value of the investments itself that has to be taken into consideration. This leaves the assessee aggrieved. 3. Learned counsel first of all has filed the assessee’s financial’s position as well as corresponding shareholder funds and unsecured loans totaling to Rs.55,45,13,814/- as against the average balance of investment amount of Rs.36,79,29,350/- taken in the CIT(A)’s order. He quotes CIT Vs Reliance Utilities & Power Ltd 313 ITR 340 (Bom) that necessary presumption is such an instance is of investment of interest free funds only. Learned lower authorities do not seem to have considered all these clinching aspects in their respective orders. We thus restore this proportionate interest expenditure disallowance issue back to the Assessing Officer for his afresh adjudication as per law. Coming to the administrative expenditure disallowance component, we quote REI Agro Ltd. V/s. DCIT (2013) 144 ITR 141 (Kolkata) that only dividend yielding than the entire investments have to be taken into consideration Hon’ble Calcutta high court has also confirmed the same in GA No.358/2013 in Revenue’s appeal. The assessing authority shall 3 ITA No.2465/PUN/2017 Niraj Kumar Associates Pvt. Ltd., accordingly compute this latter head of administrative expenditure disallowance afresh as per law. 3. This assessee’s appeal is allowed for stastical purposes in above terms. Order pronounced in the Open Court on this 13 th day of May, 2022. Sd/- Sd/- S (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 13 th May, 2022. Ashwini आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A), Pune. 4. The Pr.CIT-2, Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune. 4 ITA No.2465/PUN/2017 Niraj Kumar Associates Pvt. Ltd., S.No. Details Date Initials 1 Draft dictated on 06.05.2022 2 Draft placed before author 12.05.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order