Income Tax Appellate Tribunal - Hyderabad
Snr Investments Private Limited, ... vs Dcit, Central Circle-8, Hyderabad, ... on 30 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
I.T.A. No. 495/HYD/2017
Assessment Year: 2008-09
SNR Investments Pvt. Ltd., Dy. Commissioner of
HYDERABAD Vs Income Tax,
[PAN: AAACH4913N] Central Circle-8,
HYDERABAD
(Appellant) (Respondent)
For Assessee : Shri K.C. Devdas, AR
For Revenue : Shri V. Sreekar, DR
Date of Hearing : 28-08-2017
Date of Pronouncement : 30-08-2017
ORDER
PER INTURI RAMA RAO, A.M. :
This appeal filed by assessee-company is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-12, Hyderabad, dated 31-10-2016 for the AY. 2008-09. Assessee raised the following Grounds of Appeal:
"1. The Ld. Commissioner of Income Tax (Appeals) ['CIT (A)'] is erroneous in law and facts of the case.
2. The CIT (A) failed to note that there was no expenditure incurred in relation to earning the exempt income and therefore the provisions of Section 14A of the I.T. Act 1961 were not applicable.
I.T.A. No. 495/Hyd/2017 :- 2 -:
3. The CIT(A) erred in directing the Ld. Assessing Officer ('AO') to compute the disallowances of expenditure under Rule 8D when the provisions of Section 14A of the Income Tax Act, 1961 (I.T.Act 1961) itself were inapplicable.
4. Without prejudice to any of the aforesaid grounds, the Ld.CIT(A) having for as a matter of fact that the residue tax pending was of Rs. 60,318/-
erred in upholding the disallowance of the entire sum of Rs.60,318/- u/s 14A r.w Rule 8D of Income Tax Act 1961 or Income Tax Rules.
5. Any other ground or grounds that may be urged at the time of hearing".
2. Briefly facts of the case are that the appellant is a company duly incorporated under the provisions of The Companies Act, 1956. For the AY. 2008-09, appellant filed return of income on 30-09-2008 declaring loss of Rs. 60,318/-. After processing the said return of income under the provisions of Section 143(1) of the Income Tax Act [Act], the case was selected for scrutiny and the assessment order u/s. 143(3) of the Act was passed after giving due opportunity of hearing to the appellant vide order dt. 10-08-2011 after making disallowance of Rs. 60,318/- under the provisions of Section 14A of the Act. The facts set out by the AO relating to this addition are as under:
"On Verification of the Return of Income filed by the assessee it was noticed that while computing the total income the assessee Company has claimed administrative and other expenses of Rs.4,29,491/interest and financial charges of Rs.327/- were claimed, out of this wealth tax of Rs.3,69,500/- was already added back by the assessee. Thus the remaining expenditure comes to Rs. 60,318/-.As mentioned above, the expenditure includes expenditure incurred towards earning the exempted income also. As the details furnished were inclusive of both exempted income and taxable income it is very difficult to bifurcate. As there is no regular income and only interest income was shown as taxable income, it is clear that the expenditure incurred is mainly towards earning the exempted income only. Hence, the entire expenditure of Rs.60,318/- is disallowed as non-allowable expenditure as per sec.14A of the I.T. Act,"
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3. Being aggrieved, assessee preferred an appeal before the Ld.CIT(A), who vide the impugned order had set aside the issue to the file of the AO to compute the disallowance in accordance with the provisions of Rule 8D of the Income Tax Rules, 1962. Being aggrieved, the appellant is in appeal before us in the present appeal.
4. We have heard the rival submissions and perused the material on record. The only issue in this appeal is whether the disallowance can be made under the provisions of Section 14A r.w. Rule 8D of the Income Tax Rules, 1962. It is undisputed fact that there is an exempt income, therefore, the applicability of the provisions of Section 14A cannot be ruled out. Therefore, the Ld.CIT(A) has rightly set aside the issue to the file of AO to compute the disallowance in accordance with the provisions of Rule 8D of Income Tax Rules. In our considered opinion, there is no prejudice caused to the assessee-company as the Ld.CIT(A) only set aside the issue to the file of AO to compute the disallowance in accordance with Rule 8D. We do not see any merit in the grounds of appeal filed by the appellant. Hence, the appeal is dismissed.
5. In the result, appeal of assessee is dismissed.
Order pronounced in the open court on 30th August, 2017 Sd/- Sd/-
(D. MANMOHAN) (INTURI RAMA RAO)
VICE PRESIDENT ACCOUNTANT MEMBER
Hyderabad, Dated 30th August, 2017
TNMM
I.T.A. No. 495/Hyd/2017
:- 4 -:
Copy to :
1. SNR Investments Pvt. Ltd., 3rd Floor, Flat No. 306, Plot No. 707-709, Road No. 36, Jubilee Hills, Hyderabad.
2. The Dy. Commissioner of Income Tax, Central Circle-8, Hyderabad.
3. CIT (Appeals)-12, Hyderabad.
4. Pr.CIT(Central), Hyderabad.
5. D.R. ITAT, Hyderabad.
6. Guard File.