Dy.Commissioner of Income Tax Circle-2(1)(2), Ahmedabad V. M/s. Mas Financial Services Ltd., Ahmedabad

ITA 936/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6082 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANT ZAVERI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 936/AHD/2016 (ASSESSMENT YEAR: 2012-13) DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(2), AHMEDABAD V/S M/S. MAS FINANCIAL SERVICES LTD. 6, GROUND FLOOR, NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD- 380009 (APPELLANT) (RESPONDENT) PAN: AABCM0640A APPELLANT BY : SHRI JAYANT ZAVERI, SR. D .R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 15 -02-201 8 DATE OF PRONOUNCEMENT : 20-02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, AHMEDABAD DATED 27.01.2016 PERTAINING TO A.Y. 2012- 13. ITA NO. 936/ AHD/2016 . A.Y. 2012-1 3 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE L D. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE A.O. U/S. 14A OF THE ACT A MOUNTING TO RS. 69,14,695/-. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E A.O. NOTICED THAT THE ASSESSEE HAS EARNED DIVIDEND INCOME WHICH IS CLAIME D AS EXEMPT U/S. 10(35) OF THE ACT. THE A.O. ALSO FOUND THAT THE ASSESSEE HAS INCURRED INTEREST EXPENDITURE TO THE TUNE OF RS. 43.18 LACS. THE ASSE SSEE HAD SUO MOTO DISALLOWED AMOUNT OF RS. 12.66 LACS U/S. 14A OF THE ACT. THE A.O. WAS OF THE FIRM BELIEF THAT SINCE THE ASSESSEE HAS NOT OFFERED DISALLOWANCE AS PER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF THE ACT. THE A.O. COMPUTED THE DISALLOWANCE AT RS.81,81,545/- AND AFTER DEDUCT ING THE SUO MOTO DISALLOWANCE OF RS. 12,66,850/-. THE A.O. MADE ADDI TION OF RS. 69, 14,695/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND VEHEMENTLY CONTENDED THAT IT HAS INTEREST INCOME WHICH WAS IN EXCESS OF THE INTEREST EXPENDITURE. SINCE THE INTEREST INCOME WAS MORE THAN THE INTERES T EXPENDITURE, THE LD. CIT(A) WAS CONVINCED THAT THE SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE SHOULD MEET THE ENDS OF JUSTICE AND DIRECTED THE A. O. TO DELETE THE ADDITION OF RS. 69,14,695/-. 5. BEFORE US, THE LD. D.R. SUPPORTED THE FINDINGS OF T HE A.O. 6. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT THE TOTAL INTEREST INCOME OF THE ASSESSEE WAS RS. 9 2.87 CRORES WHEREAS THE INTEREST EXPENDITURE WAS RS. 41.20 CRORES. THUS, TH E INTEREST INCOME WAS FAR MORE IN EXCESS OF THE INTEREST EXPENDITURE. THEREFO RE, IN OUR CONSIDERED ITA NO. 936/ AHD/2016 . A.Y. 2012-1 3 3 OPINION, THERE IS NO OCCASION OF ANY DISALLOWANCE O N ACCOUNT OF INTEREST EXPENDITURE U/S. 14A OF THE ACT. THE SUO MOTO DISAL LOWANCE OF RS. 12.66 LACS IS REASONABLE AND THEREFORE NO INTERFERENCE IS CALL ED FOR IN THE FINDINGS OF THE LD. CIT(A). 7. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 20 - 02- 20 18 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 20/02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD