Income-tax Officer, Ward - 2(2), Kolhapur V. Thakarshi Devshi Aim Associates, Kolhapur

MA 61/PUN/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5702 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S.VISWAENETHRA RAVI, JUDICIAL MEMBER M.A. NO.61/PUN/2021 (ARISING OUT OF ITA NO.2953/PUN/2017) / ASSESSMENT YEAR : 2013-14 ITO, WARD-2(1), KOLHAPUR VS. THAKARSHI DEVSHI AIM ASSOCIATES, 585, E-WARD, VYAPARI PETH, SHAHUPURI, KOLHAPUR, PAN : AAAFT8063E (APPLICANT) (RESPONDENT) / ORDER PER R.S. SYAL, VP : THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE REVENUE URGING TO RECALL THE ORDER OF TRIBUNAL IN ITA NO.2953/PUN/2017, DATED 27-10-2020. 2. THE LD. DR FOR THE REVENUE SUBMITTED THAT THE TRIBUNAL ERRED IN RESTRICTING THE DISALLOWANCE U/S.14A TO RS.9,24,023/ - AS AGAINST RS.35,86,551/- MADE BY THE ASSESSING OFFICE R. IT WAS PUT FORTH THAT THE TRIBUNAL RECORDED IN PARAS 4 AND 5 THAT THE DISALLOWANCE U/S.14A CANNOT EXCEED THE AMOUNT OF EXEMPT INCOME. HE SUBMITTED THAT THE RATIO OF THE JUDGMENT APPLICANT BY SHRI MAHADEVAN A.M. KRISHNAN RESPONDENT BY SHRI M.K. KULKARNI DATE OF HEARING 17-09-2021 DATE OF PRONOUNCEMENT 17-09-2021 MA NO. 61/PUN/20201 THAKARSHI DEVSHI AIM ASSOCIATES 2 OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT VS. HSBC INVEST DIRECT (INDIA) LTD. (2020) 421 ITR 125 (BOM.) IS LIMITED TO THE EXTENT THAT WHERE THE ASSESSEES INCOME EXEMPT FROM TAX IS NOT NIL AND IT HAS EARNED EXEMPT INCOME WHICH IS LARGER THAN THE EXPENDITURE, THEN THE DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME SO EARNED BY THE ASSESSE E DURING THE YEAR. WE DO NOT FIND ANY QUALITATIVE DIFFERENCE BETWEEN THE CONTENTION PUT FORTH BY THE LD. DR AND THE VIEW CANVASSED BY THE TRIBUNAL IN THE IMPUGNED ORDER. THE SU M AND SUBSTANCE OF COUNTLESS JUDGMENTS ON THE POINT IS THAT IN NO CASE THE DISALLOWANCE U/S.14A SHOULD CROSS THE AMOUNT OF EXEMPT INCOME. IN OTHER WORDS, IF THERE IS NO EXEMPT INCOME, THEN THE DISALLOWANCE U/S.14A CANNOT BE MADE AND IF ON THE OTHER HAND THERE IS A LIMITED AMOUNT OF EXEMPT INCOM E WHICH IS LESS THAN THE AMOUNT CALCULATED U/S.14A READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962, THEN THE DISALLOWANCE SHOULD BE RESTRICTED TO THE AMOUNT OF EXEMPT INCOME ONLY. AS SUCH, WE DO NOT FIND ANY MISTAKE MUCH LE SS A MISTAKE APPARENT FROM RECORD REQUIRING ANY RECTIFICATION. 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. MA NO. 61/PUN/20201 THAKARSHI DEVSHI AIM ASSOCIATES 3 ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2021. SD/- SD/- ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VICE PRESID ENT PUNE; DATED : 17 TH SEPTEMBER, 2021 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-2, KOLHAPUR 4. THE PR. CIT-2, KOLHAPUR 5. , , B / DR B, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE MA NO. 61/PUN/20201 THAKARSHI DEVSHI AIM ASSOCIATES 4 DATE 1. DRAFT DICTATED ON 17-09-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17-09-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -- JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -- JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *