Income Tax Appellate Tribunal - Mumbai
Instant Holdings Ltd, Mumbai vs Dcit Rg 6(2), Mumbai on 4 April, 2017
आयकर अपीलीय अिधकरण, मुं बई ायपीठ 'आय' मुं बई
IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI
ी सी. एन. साद, ाियक सद , एवं ी राजे श कुमार, ले खा सद , के सम"
BEFORE SHRI C.N.PRASAD, JM AND SHRI RAJESH KUMAR, AM
आयकर अपील सं/ I.T.A. No. 5838/Mum/2014
(िनधा#रण वष# / Assessment Year: 2008-09)
Instant Holdings Limited बनाम/ The Dy. Commissioner of
(Formerly known as KEC Vs. Income Tax Officer Range
Holding Ltd.) 6(2)
RPG House, 1st Floor, 463, Mumbai
Dr. Annie Besant Road,
Worli, Mumbai - 400030
थायी लेखा सं ./जीआइआर सं ./PAN/GIR No. : AACCK5600M
(अ पीलाथ /Appellant) .. ( थ / Respondent)
Assessee by: Shri Sanjay Desai
Revenue by: Shri Saurabhkumar Rai
सु नवाई की तारीख / Date of Hearing: 05.01.2017
घोषणा की तारीख /Date of Pronouncement: 04.04.2017
आदे श / O R D E R
PER C.N.PRASAD, JM:
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals)-12, Mumbai [hereinafter referred to as the "CIT(A)"] dated 25.06.2014 for the A.Y. 2008-09 arising out of the assessment order passed u/s.143(3) of the Income Tax Act, 1961 (in short "the Act").
ITA No.5838/M/14A.Y.2008-09
2. The first grievance of the assessee in its appeal is that the CIT(A) erred in confirming the action of the Assessing Officer in disallowing expenses of Rs.20,00,000/- out of Rs.29,05,000/- debited to its Profit and Loss Account u/s.14A of the Act.
3. Briefly stated facts are that the assessee is an investment company filed return of income on 29.09.2008 declaring income of Rs.1,04,23,294/-. The assessment was completed on 10.12.2010 u/s.143(3) of the Act by determining the income at Rs.1,24,23,300/-. While completing the assessment, the Assessing Officer disallowed Rs.20,00,000/- u/s.14A Read with Rule 8D of the Act. The Assessing Officer noticed that the assessee has received dividend income of Rs.3,09,35,678/- and claimed as exempt u/s.10(34) of the Act. However, since no expenditure relating to this income was disallowed while computing the returned income the Assessing Officer worked out the disallowance under Rule 8D(iii) of the Act i.e. 0.5% of average value of investments and arrived the disallowance of Rs.75,07,337/-. However, since the assessee debited total expenditure of Rs.29.05 lacs to the Profit and Loss Account for the year under consideration the disallowance u/s.14A was restricted to Rs.20,00,000/- said to have been worked out in proportion of dividend income to total income. On appeal the CIT(A) sustained the disallowance made by the Assessing Officer.
4. Before us the learned counsel for the assessee submits that no expenditure was incurred by the assessee for earning dividend income except D-mat charges of Rs.414/-. It was further submitted that in the computation of income the assessee disallowed Rs.14,37,377/- out of total 2 ITA No.5838/M/14 A.Y.2008-09 expenditure debited to Profit and Loss Account of Rs.29.05 lacs and what was claimed towards expenditure is about Rs.14.67 lacs only. Therefore, the counsel for the assessee submits that the disallowance u/s.14A of the Act should not exceed the expenditure claimed in the return of income i.e. Rs.14.67 lacs.
5. The DR supported the orders of the authorities below.
6. We have heard the rival submissions and perused the orders of the authorities below. The Assessing Officer while completing the assessment disallowed Rs.20,00,000/- being the expenditure attributable for earning dividend income. The Assessing Officer though calculated the disallowance to be made under Rule 8D(iii) of the Act at Rs.75,07,337/- since the assessee debited expenditure to the extent of Rs.29.05 lacs to the Profit and Loss Account he restricted the disallowance to Rs.20,00,000/- which the CIT(A) sustained. It is the contention of the assessee before us that in the computation of income the assessee disallowed Rs.14,37,337/- and only the remaining Rs.14.67 lacs was claimed as allowable expenditure, therefore the disallowance should not exceed Rs.14.67 lacs. On a perusal of computation of income we find that assessee added back the following expenditures to the income returned:-
Sr. Particulars Amount
No.
(i) Provision for NPA 9,84,233/-
(ii) Investment written off 4,00,000/-
(iii) Diallowance of rental charges 53,444/-
Total 14,33,377
3
ITA No.5838/M/14
A.Y.2008-09
7. We also find that the assessee debited its Profit and Loss Account only with Rs.29.05 lacs as expenditure. Since the assessee added back Rs.14,37,377/- to its income returned infact the expenditure claimed by the assesse is only the balance of Rs.14.67 lacs. Percentage of exempted income to total income comes to 75%, as the exempt income is Rs.3,09,35,678/- and the total income is Rs.4,00,84,462/-. Therefore, the disallowance in the ratio of exempt income to total income i.e.75% of the expenditure of Rs.14.67 lacs claimed by the assessee works out to Rs.11,00,000/- even according to method adopted by the Assessing Officer therefore in our considered view the disallowance should not exceed Rs.11,00,000/-. In the facts and circumstances we direct the Assessing Officer to restrict the disallowance to Rs.10,00,000/- u/s.14A of the Act as the expenditure attributable for earning exempt income.
8. Coming to the second issue in the appeal of the assessee, the assessee is challenging the order of the CIT(A) in disregarding the credit for TDS not allowed by the Assessing Officer to the extent of Rs.4,02,439/- The learned counsel for the assessee submits that assessee has filed petition u/s.154 of the Act for granting credit for TDS which is still pending before the Assessing Officer. He also submits that CIT(A) did not adjudicate on this issue for the reason that assessee filed rectification petition and the same is pending before the Assessing Officer. The learned counsel for the assessee prayed before us to give direction to disposed off petition u/s.154 of the Act and to consider for granting credit for TDS. The DR has no serious objection in directing the Assessing Officer to consider the plea of the assessee.
4 ITA No.5838/M/14A.Y.2008-09
9. On hearing both the sides we direct the Assessing Officer to disposed off the rectification petition filed by the assessee for granting credit for TDS. The ground raised by the assessee is also restore to the file of the Assessing Officer who shall was decide in accordance with law after providing adequate opportunity of being heard.
7. The ground no.3 in the grounds of appeal is related to levy of interest u/s.23A, 234B, 234C and 234D of the Act. Charging of interest is only consequential. Therefore this ground beingonly consequential the same is Dismissed.
8. In the result, the appeal filed by the assessee is hereby Partly Allowed for statistical purpose.
Order pronounced in the open court on 4th April, 2017.
Sd/- Sd/-
(RAJESH KUMAR) (C.N.PRASAD)
लेखा सद / ACCOUNTANT MEMBER ाियक सद /JUDICIAL MEMBER
मुंबई Mumbai; िदनां क Dated : 4th एि ल, 2017
MP
5
ITA No.5838/M/14
A.Y.2008-09
आदे श की ितिलिप अ &े िषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. आयकर आयु((अपील) / The CIT(A)-
4. आयकर आयु( / CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुं बई / DR, ITAT, Mumbai
6. गाड- फाईल / Guard file.
आदे शानु सार/ BY ORDER, स ािपत ित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुं बई / ITAT, Mumbai 6