Calcutta High Court
Commissioner Of Income Tax vs Ashish Jhunjhunwala on 8 January, 2014
Author: Girish Chandra Gupta
Bench: Girish Chandra Gupta
ORDER SHEET
G.A. No. 2990 of 2013
ITAT No. 157 of 2013
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX, CENTRAL-I, CALCUTTA
Versus
ASHISH JHUNJHUNWALA
BEFORE:
The Hon'ble JUSTICE GIRISH CHANDRA GUPTA
The Hon'ble JUSTICE TAPASH MOOKHERJEE
Date : 8th January, 2014.
Mr. P.K.Bhowmick, Advocate for the Appellant
Mr.J.P. Khaitan, Sr.Adv. Mr. P. Jhunjhunwala, Adv.
And Mr. C.S. Das, Adv. for the Respondent
The Court : The subject matter of challenge in this appeal is a judgment and order 14th May, 2013 by which the learned Tribunal dismissed the appeal preferred by the Revenue. Aggrieved by the order of the Tribunal, the Revenue has come up in appeal. The Assessing Officer applied the Thumb Rule prescribed in Rule 8B of the Income Tax Rules in exercise of power under section 14A of the Income Tax Act without first recording that he was not satisfied with the correctness of the claim of the expenditure made by the assessee or the claim made by the assessee that no expenditure had been incurred.
Aggrieved by the order of the Assessing Officer, an appeal was preferred before the Commissioner of Income Tax. The appeal preferred by the assessee was allowed. The Commissioner of Income Tax directed as follows:
"Therefore, he is directed to delete the disallowance made by him u/s.14A of the Act. The ground no.1 is allowed".
It is against this order of the Commissioner of Income Tax that the Revenue approached the Tribunal. The Tribunal has dismissed the appeal holding as follows : 2
" While rejecting the claim of the assessee with regard to expenditure or no expenditure, as the case may be, in relation to exempted income, the AO has to indicate cogent reasons for the same. From the facts of the present case, it is noticed that the AO has not considered the claim of the assessee and straight away embarked upon computing disallowance under Rule 8D of the Rules on presuming the average value of investment at ½% of the total value. In view of the above and respectfully following the coordinate bench decision in the case of J.K. Investors (Bombay) Ltd., supra, we uphold the order of CIT (A)".
We find no infirmity in the order under challenge. The appeal and the application are therefore dismissed.
(GIRISH CHANDRA GUPTA, J.) (TAPASH MOOKHERJEE, J.) km AR(CR)