Shri Satyanarayan Atmaram Agrawal, Ghandhidham V. The ACIT.,Circle-1, Ahmedabad

ITA 88/AHD/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9272 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 12-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Assessee Lawyers: T P HEMANI
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC/I BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.88/AHD/2012 (ASSESSMENT YEAR:2008-09) SHRI SATYANARAYAN ATMARAM AGARWAL, PLOT NO.356, GOKUL PARK, WARD 12-B, TAGORE ROAD, GANDHIDHAM APPELLANT VS. THE ACIT, CIRCLE-1, AHMEDABAD RESPONDEN T PAN: ABKPA8912C /BY ASSESSEE : SHRI T. P. HEMANI, A.R. /BY REVENUE : MS. RICHA RASTOGI, SR. D.R. /DATE OF HEARING : 02.02.2017 /DATE OF PRONOUNCEMENT : 08.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST CIT(A)-6, AHMEDABADS ORDER DATED 02.12.2011, IN AP PEAL NO. CIT(A)- VI/ACIT.CIR.1/154/10-11, AFFIRMING ASSESSING OFFICE RS ACTION INVOKING ITA NO. 88/AHD/2012 (SHRI SATYANARAYAN A. AGARWAL V S. ACIT) A.Y. 2008-09 - 2 - SECTION 14A READ WITH RULE 8D DISALLOWANCE OF RS.5, 10,000/-, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; I N SHORT THE ACT. 2. SHRI HEMANI SUBMITS AT THE OUTSET THAT ASSESSEE S SOLE SUBSTANTIVE GROUND SEEKS TO DELETE SECTION 14A R.W. RULE 8D DIS ALLOWANCE STATED HEREINABOVE AMOUNTING TO RS.5,10,000/-. MS. RASTOG I DRAWS STRONG SUPPORT FROM THE CIT(A)S ORDER UNDER CHALLENGE AFFIRMING T HE ABOVE STATED DISALLOWANCE. WE PUT UP A SPECIFIC QUERY AS TO HOW MUCH EXEMPT INCOME THE ASSESSEE HAS DECLARED IN THE IMPUGNED ASSESSMENT YE AR. SHRI HEMANI VERY FAIRLY INFORMS THE BENCH THAT THE TOTAL EXEMPT INCO ME INVOLVED IN THE IMPUGNED ASSESSMENT YEAR IS RS.12,378/- ONLY. HE T HEN SUBMITS THAT KEEPING IN MIND THE SMALLNESS OF ASSESSEES EXEMPT INCOME A MOUNT, HE WOULD NOT HAVE ANY OBJECTION IF THE IMPUGNED DISALLOWANCE IS CONFINED TO THE SAID EXTENT ONLY. 3. WE HAVE HEARD BOTH THE PARTIES REITERATING THEIR RESPECTIVE STANDS. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT IN AS SESSEES CASE ON 30.11.2010. HE NOTICED THE ASSESSEE TO HAVE MADE I NVESTMENTS OF RS.70,44,563/- RESULTING IN EXEMPT INCOME BY WAY OF DIVIDENDS AND PROFIT FROM HIS PARTNERSHIP FIRMS. HE INVOKED RULE 8D (2) (II & III) TO DISALLOW INDIRECT PROPORTIONATE EXPENSES OF RS.4,73,009/- AL ONG WITH ADMINISTRATIVE EXPENSES OF RS.36,990/-; AGGREGATING TO RS.5,10,000 /- IN QUESTION. THE CIT(A) CONFIRMS THE SAME. THERE DOES NOT APPEAR TO BE ANY DISPUTE ABOUT SHRI HEMANIS STATEMENT THAT ASSESSEES EXEMPT INCO ME OF RS.12,378/- ONLY. WE FIND IN THIS BACKDROP THAT HONBLE DELHI HIGH CO URT IN A RECENT JUDGMENT JOINT INVESTMENTS PVT. LTD. VS. CIT (2015) 372 ITR 694 (DELHI) CONCLUDES THAT SECTION 14A OR RULE 8D COULD NOT BE INTERPRETE D SO AS TO MEAN THAT ENTIRE EXEMPT INCOME IS DISALLOWED. WE DRAW SUPPORT THERE FROM IN THE INSTANT CASE AS WELL AND DIRECT THE ASSESSING OFFICER TO RESTRIC T THE IMPUGNED DISALLOWANCE ITA NO. 88/AHD/2012 (SHRI SATYANARAYAN A. AGARWAL V S. ACIT) A.Y. 2008-09 - 3 - TO THE EXTENT OF EXEMPT INCOME ONLY AS STATED HEREI NABOVE. THE ASSESSEES SOLE SUBSTANTIVE GROUND IS PARTLY ACCEPTED. 4. THE ASSESSE PARTLY SUCCEEDS IN THE INSTANT APPEA L. [PRONOUNCED IN THE OPEN COURT ON THIS THE 08 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 08/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0