Shri Manan Ajaybhai Shah, Ahmedabad V. The Income Tax Officer, Ward-1(3)(3), Ahmedabad

ITA 2901/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5995 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 08-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VILAS SHINDE
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.NO.2901/AHD/2016 / ASSTT.YEAR : 2012-13 SHRI MANNAN AJAYBHAI SHAH 502, GAUTAM TRADING CO. PANCHKUWA, AHMEDABAD. PAN : ARYPS 7492 K VS ITO, WARD-1(3)(3) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI HARDIK VORA, AR REVENUE BY : SHRI VILAS SHINDE, SR.DR / DATE OF HEARING : 22/02/2018 / DATE OF PRONOUNCEMENT: 01 /03/2018 !'/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-10, AHMEDABAD, DATED 18.8.2016 PASSED FOR THE ASSTT.YEA R 2012-13. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,22,874/- WHICH WAS ADDED BY THE AO WITH HELP OF SECTION 14A OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ELECTRONICALLY DECLARING TOTAL INCOME AT RS.5,25,34 6/-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE H AS MADE INVESTMENT IN SHARES AT RS.2.98 CRORES. HE HAS CLOSING CAPITAL O F RS.5.79 CRORES WHICH INCLUDED INVESTMENT IN SHARES OF RS.2.98 CRORES. T HE LD.AO HAS WITHOUT DELIBERATING UPON THE FACTS AND CIRCUMSTANCES, WORK ED OUT DISALLOWANCE UNDER SECTION 14A AT RS.2,22,874/-. APPEAL TO THE LD.CIT (A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. ITA NO.2901/AHD/2016 2 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE, THEN HOW THE LD.AO COULD MAKE DISALLOWANCE UNDER SECTION 14A. HE TOOK US THROUGH COMPUTATION OF INCOME, AND POINTED OUT THAT UNDER SHORT TERM CAPITAL GAIN, THE ASSESSEE HAS DEBITED EXPENDITURE OF RS.7,452/- WHICH INCLUDED DEMAT CHAR GE AMOUNTING TO RS.3,455/- AND LATE PAYMENT CHARGE OF RS.3,718/- AN D SERVICE TAX COMPONENT IS OF RS.279/-. AS FAR AS INTEREST IS CONCERNED, T HE ASSESSEE HAS PAID INTEREST OF RS.57,89,344/-. HE HAS RECEIVED INTEREST OF RS.58, 90,713/-. THUS, NET INTEREST EXPENDITURE IS NIL. ON THE STRENGTH OF THESE DETAI LS, IT WAS CONTENDED THAT NO INTEREST DISALLOWANCE COULD BE MADE IN THE HANDS OF THE ASSESSEE. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF SECTION 14A WOULD INDICAT E THAT THE EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT INCOME IS TO BE D ISALLOWED. IF THE ASSESSEE HAS NOT DEBITED ANY EXPENDITURE OR HAS NOT CLAIMED ANY EXPENDITURE FOR EARNING EXEMPT INCOME, THEN ON PRESUMPTIVE BASIS EX PENDITURE CANNOT BE CALCULATED FOR DISALLOWANCE. TAKING INTO CONSIDERA TION ALL THESE FACTS, AT THE MOST EXPENDITURE OF RS.7,452/- COULD BE DISALLOWED IN THE CASE OF THE ASSESSEE. WE ALLOW THE APPEAL OF THE ASSESSEE PART LY AND CONFIRM THE DISALLOWANCE TO THIS EXTENT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST MARCH, 2018 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/03/2018