B.Shanthilal Choudry, CHENNAI V. ITO, NCW - 6(3), CHENNAI

MA 75/CHNY/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2926 (ITAT-CHENNAI)
• Duration Of Justice: 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-08-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 19-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A; 254(2)

Judgement Text

bआयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. मंजुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member M.P. No. 75/Chny/2022 आयकर अपील सं./ [In I.T.A. No.3109/Chny/2019] िनधाŊरण वषŊ/Assessment Year: 2016-17 Shri B. Shantilal Choudhary, No. 39/21, General Muthiah Mudali Street, Sowcarpet, Chennai 600 079. [PAN:AEFPS9755M] Vs. The Income Tax Officer, Non Corporate Ward 6(3), Chennai. (Petitioner by) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Petitioner by : Shri J. Prabhakar, F.C.A. ŮȑथŎ की ओर से/Respondent by : Shri Hema Bhupal, JCIT सुनवाई की तारीख/ Date of hearing : 05.08.2022 घोषणा की तारीख /Date of Pronouncement : 12.08.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: By means of present Miscellaneous Petition, the assessee seeks to recall the order passed by the Tribunal in I.T.A. No. 3109/Chny/2019 dated 25.02.2022 relevant to the assessment year 2016-17. 2. By referring to the petition, the ld. Counsel for the assessee has submitted that the subject matter of dispute was with reference to an arbitrary disallowance of 1% in terms of Rule 8D(2)(ii) of Income Tax Rules 1962, which deals with the value of investment in tax exempt M.P. No.75/Chny/22 2 income. While concluding the appeal order, the Tribunal has set aside the appeal to the file of the Assessing Officer, being a mistake of fact and law, the ld. Counsel for the assessee has prayed for recalling the order passed by the Tribunal dated 25.02.2022 for fresh adjudication. 3. On the other hand, the ld. DR has not raised any serious objection. 4. We have heard both the sides and considered the rival contentions on the miscellaneous petition filed under section 254(2) of the Income Tax Act, 1961 [“Act” in short] against the order of the Tribunal dated 25.02.2022. We find that the only issue involved in this appeal is with regard to disallowance made under section 14A r.w. Rule 8D of the Income Tax Rules, 1962. The Assessing Officer has disallowed a sum of ₹.4,52,232/- being 1% of the investments, which yield exempt income under Rule 8D2(ii) of the IT Rules. However, the Tribunal, while setting aside the issue to the file of the Assessing Officer, has observed that although the assessee has debited interest expenses, but the Assessing Officer has not considered the expenses for disallowance, even though, the case of the Assessing Officer is that the interest expenses on borrowed funds, which does not have any link M.P. No.75/Chny/22 3 with investment made in shares and securities yielding interest income. Thus, in our considered opinion, there is a mistake apparent on record, which needs to be rectified under section 254(2) of the Act. Accordingly, we recall the order of the Tribunal passed in I.T.A. No. 3109/Chny/2019 dated 25.02.2022 and direct the Registry to post the appeal for hearing in due course. 5. In the result, the miscellaneous petition filed by the assessee is allowed. Order pronounced on 12 th August, 2022 at Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 12.08.2022 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.