M/s Balaji Mines and Minerals Private Limited, Panaji V. Assistant Commissioner of Income Tax, Circle - 1, Margao, Margao

ITA 325/PAN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7716 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 29-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: P J PARDIWALLA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI SHAMIM YAHYA , A M AND SHRI RAM LAL NEGI , J M ITA NO. 32 5 / PAN . / 2017 (ASSESSMENT YEAR: 20 13 - 14 ) M/S. BALAJI MINES AND MINERALS PRIVATE LIMITED SALGAOCAR BHAVAN, ALTINHO, PANAJI, GOA - 403 001 VS. ASST. CIT - 1, MARGAO RANGE, GOA PAN/GIR NO. AAACB 7003 P ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI P. J. PARDIWALLA RESPONDENT BY : SHRI Y. V. RAVIRAJ DATE OF HEARING : 15.11.2018 DATE OF PRONOUNCEMENT : 14.01 .2019 O R D E R PER SHAMIM YAHYA, A. M.: TH IS IS AN APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PAN A JI , PERTAINING TO ASSESSMENT YEAR 20 13 - 14 . 2. THE GROUND S OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. I. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF RS.17,79,295/ - U/S. 14A OF THE ITA MADE BY THE ASSESSING OFFICER BY HOLDING THAT SUCH DISALLOWANCE WAS MANDATORY UNDER RULE 8(D)(2)(III) OF THE INCOME TAX RULES, 1962 WITHOUT ES TABLISHING NEXUST BETWEEN EXEMPT INCOME EARNED AND EXPENDITURE INCURRED. WITHOUT PREJUDICE TO THE ABOVE II. THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT AS PER RULE 8(D)(2)(III), ONLY THOSE INVESTEMTNS WHICH YIELDED EXEMPT INCOME DURING THE YEAR WERE TO BE CONSIDERED FOR COMPUTING AVERAGE VALUE OF INVESTMENTS. 3. AT THE OUTSET, IN THIS CASE, THE LD. COUNSEL OF THE ASSESSEE STATED THAT HE IS ONLY PRESSING FOR THE WITHOUT PREJUDICE GROUND. HE SUBMITTED THAT THE SAID ISSUE IS COVERED BY THE ITAT SPECIAL BE NCH DECISION IN THE CASE OF VIREET INVESTMENT PVT. LTD. AND ANR. (2017) 165 ITD 0027 (DELHI) ((SB)). 2 ITA NO .324 /PAN./2017 4. UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECORDS, WE FIND THAT THE ITAT SPECIAL BENCH IN THE CASE OF VIREET INVESTMENT PVT. LTD. (SUPRA) HAS EXPO UNDED THAT FOR THE PURPOSE OF COMPUTATION UNDER RULE 8D(2)(III) ONLY THOSE INVESTMENTS WHICH Y I ELDED EXEMPT INCOME DURING THE YEAR WERE TO BE CONSIDERED FOR COMPUTING THE AVERAGE VALUE OF THE INVESTMENT. WE DIRECT ACCORDINGLY. 5. IN THE RESULT , TH IS APPE AL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. O RDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES, 1963. SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER DATED : 14.01.2019 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, PANJI CITY CONCERNED; (5) THE DR, ITAT, PANJI ; (6) GUARD FILE . BY ORDER ROSHANI , SR. PS ( SR. P.S. / P.S. ) ITAT