ACIT,Circle-3, Nainital V. The Nainital Bank Ltd, Nainital

ITA 2773/DEL/2018

AI Insights

The case involves the Assistant Commissioner of Income Tax (ACIT), Circle-3, Nainital as the appellant and The Nainital Bank Ltd. as the respondent. The core issue in the appeal was the deletion of an addition made under section 14A of the Income Tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1962, which pertains to expenses relatable to income not includible in total income. The Revenue challenged the CIT (A)'s decision to delete this addition, arguing that the assessee had invested in tax-free securities/funds from its tax-bearing funds without establishing the quantum of such funds. However, the Tribunal referenced a previous decision in the assessee's own case for a similar issue, where it was determined that the assessee had sufficient own funds in the form of share capital, reserves, and surplus, which was not disputed by the revenue authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 131038 (ITAT-DEHRADUN)
• Duration Of Justice: 4 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-12-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 19-04-2018
• Other Referred Cases: ITA No. 5017/Del/2017, ITA No. 258 & 4987/Del/2007, ITA No. 260/Del/2007, ITA No. 3510/Del/2008
• Laws Referred To: Income Tax Act, 1961, IT Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH ‘DB’, DEHRADUN Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 2773/Del./2018: Asstt. Year: 2014-15 ACIT, Circle-3, Nainital-263001 Vs The Nainital Bank Ltd., Sevan Oakas, Mallital, Nainital, Uttarkhand (APPELLANT) (RESPONDENT) PAN No. AAACT5714D Assessee by : Sh. K. R. Rastogi, Adv. & Sh. Subham Rastogi, Adv. Revenue by : Smt. Mayank Prabha Tomar, Sr. DR Date of Hearing: 14.12.2022 Date of Pronouncement: 16.12.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the Revenue against the order of the ld. CIT(A), Haldwani dated 11.01.2018. 2. The revenue has raised the following grounds of appeal: “1. That Ld. CIT(A) has erred in law as well as in facts of the case, in deleting the addition made u/s 14A of the IT Act, 1961 read with Rule 8D of the IT Rules, 1962, being expenses relatable to income not includible in total income. 2. That ld CIT(A) has erred in law as well as in facts of the case in not considering that investment was made by the assessee in tax free securities/ funds, mostly out of its tax bearing fund. 3. That ld CIT(A) has erred in law as well as in facts of the case, in not considering that the assessee failed Page | 2 to establish the quantum of its tax bearing fund as well as tax free fund, which were invested in tax free securities/ funds.” 3. At the outset, it was brought to our notice by both the parties that the issue involved in the instant case is covered by the decision of the coordinate bench in assessee’s own case for Assessment Year 2010-11 in ITA No. 5017/Del/2017. For the sake of ready reference, the relevant part of the order is reproduced as under: Addition u/s 14A: “2. During the hearing, the assessee has made investment of Rs.706,65,02,000/- in various securities/ shares and Rs.82,10,60,336/- in mutual funds & other tax free bonds. The assessee has made disallowance of Rs.42,19,826/- u/s 14A of the Income Tax Act, 1961 being expenses relatable to the income not includible in the total income as per the computation of total income. The AO made further disallowance of Rs.4,14,60,879/-. 3. The ld. CIT (A) deleted the addition based on the decision of the Tribunal in the assessee’s own case for the assessment years 2003-04, 2004-05 and 2005-06 in ITA No. 258 & 4987/Del/2007 and in ITA No. 260/Del/2007. Further, in ITA No. 3510/Del/2008 for the assessment year 2005-06, the Co-ordinate Bench of the Tribunal after going through the financial position of the assessee gave a categorical finding that the assessee has got sufficient own funds in the form of share capital, Reserves & Surplus. The financial position has not been disputed by the revenue authorities during the instant year.” Page | 3 4. Hence, in the absence of any change in the facts of the case and legal proposition, we affirm the decision of the ld. CIT (A) which was based on the considered decision of the ITAT. 5. In the result, the appeal of the revenue is dismissed. Order Pronounced in the Open Court on 16/12/2022. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 16/12/2022 *Ajay Kumar Keot, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR