Income Tax Appellate Tribunal - Chandigarh
M/S Swaraj Engines Ltd., Mohali vs Dcit, C-6(1), Mohali on 29 March, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "बी", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH 'B' , CHANDIGARH
ी संजय गग , याय क सद य एवं ीमती अ नपण
ू ा ग'ु ता, लेखा सद य
BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER
AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.1366/Chd/2018
नधा रण वष / Assessment Year : 2015-16
M/s Swaraj Engines Ltd. बनाम The D.C.I.T.,
Mohali. (Punjab) Circle 6(1),
Mohali.
थायी लेखा सं./PAN NO: AACCS2990N
नधा रती क ओर से/Assessee by : Shri A.K. Jindal, CA
राज व क ओर से/ Revenue by : Shri Manjit Singh, Sr.DR
सन
ु वाई क तार!ख/Date of Hearing : 12.03.2019
उदघोषणा क तार!ख/Date of Pronouncement: 29.03.2019
आदे श/ORDER
Per Anna pur na Gupta, Account ant Member The present ap peal has been fi l ed by the as sessee agai nst the order of the Commi ssi oner of I ncome Ta x ( Appeal s) -2, Chandi garh ( i n short 'CI T( A) ' dated 28.8.2018 rel ati ng to assessment year 2015-16, passed u/s 250( 6) of the I ncome Ta x Act, 1961 ( herei nafter referred to as 'Act') .
2. The sole issue involved in the present appeal relates to disallowance of expenses incurred by the assessee in relation to earning of exempt income as per the provisions of section 14A of the Act.
3. Brief facts relating to the issue are that the assessee had earned dividend income of 2 ITA No.1366/Chd/2018 A.Y.2015-16 Rs.3,23,73,710/- during the relevant year. During assessment proceedings, the A.O. questioned the assessee on dividend income being exempt from tax and, therefore, expenses incurred to earn exempt income required to be disallowed as per section 14A read with Rule 8D of the Income Tax Rules, 1962. The assessee submitted that the Tax Auditors in the relevant year after taking into account relevant facts considered an amount of Rs.6,87,531/- as expenditure towards earning of exempt dividend income and the same had been disallowed by the assessee in the computation of income. The A.O. found that only the salary part of one employee had been attributed as expenditure towards earning dividend income. The contention of the assessee was rejected and disallowance u/s 14A r.w.r. 8D was made by the A.O.
4. Before the Ld.CI T( A) , the assessee contended before hi m that the di sal l o w ance made was a gai nst the provi s i ons of l a w si nce the A.O. had fai l ed to record hi s sati sfacti on regardi ng the i ncorrectness of the cl ai m made by the assessee regardi ng the e xpenses di sal l o wabl e u/s 14A of the Act despi te the fact that the assessee had i n detai l e xpl ai ned hi s method and reasons for worki ng out the suo moto di sal l o wance. Th e assessee al so contended that si nce i t had ampl e reserves and surpl uses, there was no reason for maki ng any di sal l o wance of i nterest u/s 14A of the Act si nce the presumpti on i n such cases i s that the i nvestment had 3 ITA No.1366/Chd/2018 A.Y.2015-16 been made out of the Act i ts o wn funds. The Ld.CI T(A) di smi ssed the c ontenti on of the assessee and uphel d the order of the A.O . fol l o wi ng hi s d eci si on i n the i mmedi atel y precedi ng year in the case of the assessee i .e. assessment year 2014-15.
5. Aggri eved by the same, the assessee has come up i n appeal before us rai si ng fol l o wi ng grounds:
"1. That the order passed by the Learned CIT (A) is bad in law being based on conjectures and surmises and without appreciating material on record.
2. That the learned CIT (A) has erred in law and on facts of the case by confirming the disallowance of Rs. 21,83,228/- made by Ld. AO u/s 14A by wrongly applying Rule 8D of Income Tax Rules,1962.
3. That the Learned CIT (A) has erred in law and on facts of the case by making the provisions of Section 14A read with Rule 8D applicable to the Appellant Company in a mechanical manner.
4. That the Learned CIT (A) has erred in law and on facts of the case by ignoring the disallowance made by the Appellant Company himself in respect of earning the exempt income u/s 14A of Income Tax Act, 1961.
5. That the appellant craves to leave, add or modify any ground of appeal before the disposal of Appeal."
6. Before us, the Ld. counsel for assessee contended that the i ssue i nvol ved i n the present appeal stands adjudi cated in favour of the assessee by the I . T.A. T. r i ght from assessment years 2012-13 to assessment year 2014-15 . Copy of the order of the I . T.A. T. rel ati n g to assessment year 2014- 15 passed i n I TA No.775/Chd/2018 dated 21.11.2018 a nd consol i dated order for assessment years 2012-13 and 2013- 14 i n I TA Nos.1258 & 1259/Chd/2016 dated 1.6.2017 was pl aced before us. Dra wi ng our attenti on to the order passed 4 ITA No.1366/Chd/2018 A.Y.2015-16 i n I TA Nos.1258 & 1259/Chd/2016 i t was poi nted out that I . T.A. T. i n the s ai d case had del eted the di sal l o w ance made hol di ng that the A.O. had fai l ed to record hi s s atisfacti on regardi ng the i n correctness of t he cl ai m of the assessee of e xpenses di sal l o wabl e u/s 14A of the Act. Our attenti on was dra wn to the fi ndi ngs of the I . T.A. T. at paras 12 to 16 of the order as under:
"12. T he f irs t argu men t wh ich was r ais ed bef ore us and wh ich needs to be addressed is reg ar d ing the s atisf ac tion of the Assess ing Of f icer v is- à-v is the correc tness of th e cl ai m of the assessee th at the ex penses incurre d f or earn ing th e exe mp t inco me amo un ted to Rs. 8, 79, 416/-. On ex amin ing the assess men t orde r and on re ad in g p ar a 3. 1 of th e s ame, wh ich wa s po in ted ou t to us by the Ld. D R wh e re in pur por tedl y the s ati sf ac tion of th e Assess ing Of f icer was recorded, we f ind the s ame re ads as under:
"3.1 I have examined the above submission of the assessee submitted vide letter dated 18.12.2014 but not inclined to accept the view that only salary of one employee pertains to expenditure attributable towards earning dividend income. From the profit and loss account, it is observed that the assessee has incurred Rs. 1916.88 lakhs as Employees Benefit Expenses and Rs. 7.60 lakhs on Bank and other financial charges. The assessee has not filed any evidence with regard to the claim that no business assets or funds out of business were utilized or no administrative expenditure is incurred in earning the dividend income. Accordingly, 1 am not satisfied with the correctness of expenditure claimed by the assessee."
13. T he sub miss ions made by the as sessee v ide l e tter d ated 18. 12. 2014, ref erred to above, i s re produced in the order of the AO as under:
"The Assessee Company has earned an exempted dividend income of Rs. 3,08,09,411/- during the F.Y. 2011-12. In this regard, it is submitted that entire exempted income pertains to dividend received from investments made in certain debt based mutual funds. Company's Board of Directors has put in place a policy defining the funds where investments are required to be made. Further, making an investment in the prescribed debt based mutual funds is like choosing Fixed Deposits from various available options which do not include any expenditure. Now, just because the income from dividend 5 ITA No.1366/Chd/2018 A.Y.2015-16 is a tax free income as per the Act, that does not mean that the 'expense have necessarily to be apportioned to earn such income. As you are aware of that 'ours is a large manufacturing concern and all the investment are mainly in electronic mode where the ECS credit of Dividend is automatically done. We can compare this Dividend income with the income from dividends on the investments in shares of companies by the individuals. Once the investment is made, there are hardly any expenses required to be incurred after that.
In any case, during the course of Tax Audit for the relevant A.Y. 2012-13, the tax auditors of the company, after taking into consideration the entire facts and detailed deliberations, considered an amount of Rs.8,79,416/- as expenditure towards earning of exempted dividend income u/s. 14A of Income Tax act, 1961. This amount of Rs.8,79,416/- has been worked out as follows:
Disallowance u/s 14A Amt. (In Rs.) Entire Salary of Mr.Vinod Sharma 3,77,249/- (Accounts Officer) 10% Salary of Mr. M.S.Grewal 2,23,856/- (Company Secretary) Sub Total 6,01,105/- Add: 46.30% (% age of 2,78,311/- Administrative expenses to the salary) for Admn. Exp. Gross Total 8,79,416/-
This disallowance has been depicted in clause 17(1) of the Tax Audit report and was also disallowed in the computation of Income from business or profession under schedule BP of the Income Tax Return.
In view of the above facts we herein submit that no further disallowance is warranted in the case of Assessee Company during the A.Y. 2012-13 u/s. 14A read with Rule 8D. Further, in order to substantiate our claim, we rely on the following precedents:
14. Co ming to the pro pos ition re g ard ing the s atisf ac tion of th e Assess ing Of f icer u/s 14A of the Ac t wh ich h as been l aid do wn b y the jur isd ic tion al H igh Cour t in the c ase of Abhishek Indus tr ies L td. ( 2016) 380 IT R 652( P&H ) an d Dee p ak M ittal ( supr a), we f ind th at the Hon' bl e H igh Cour t in the c ase of Abhishe k Indus tr ies L td . ( supr a), wh il e de al ing wi th the issue, hel d th at the s atisf ac tion to be recorded mus t be b ased on cred ibl e and rel ev an t ev idence. T he Hon'bl e H igh Co ur t h as hel d th at onus to prove th at the cl ai m of the assessee was incorrec t l ies o n the shoul ders of the Revenue and 6 ITA No.1366/Chd/2018 A.Y.2015-16 the Assess ing Of f icer c anno t s tate th at he is no t s atisf ied abou t the correc tness of the cl ai m of the assessee b y mak ing gener al observ ation. T he Hon'bl e H igh Cour t h as c ategor ic al l y hel d th at on the b as is of cl ear and cogen t mater ial onl y c an be b ased u/s 14A d is al l o win g the assessee' s cl ai m. T he Hon'bl e Hig h Cour t h as l ai d do wn the s ai d pro pos ition at p ar a 9 of its order as under :
"Section 14A of the Act requires the Assessing Officer to record satisfaction that interest bearing funds have been used to earn tax free income. The satisfaction to be recorded must be based upon credible and relevant evidence. The onus, therefore, to prove that interest bearing funds were used, lies squarely on the shoulders of the revenue. Thus, if the Assessing Officer is able to refer to relevant material while recording satisfaction that borrowed funds were used to earn interest free income as opposed to the assessee's own funds, the Assessing Officer may legitimately disallow such a claim. The Assessing Officer, however, cannot, by recording general observations, particularly where the assessee has denied using interest bearing funds, proceed to infer that interest bearing income must has been used to earn exempted income. Section 14A of the Act, being in the nature of an exception, has to be construed strictly and only where the Assessing Officer records satisfaction, on the basis of clear and cogent material, shall an order be passed under Section 14A of the Act, disallowing such a claim. As there is no tangible material on record that could have enabled the Assessing Officer to record satisfaction in terms of Section 14A of the Act, findings recorded by the CIT(A) and the ITAT that the Assessing Officer has failed to discharge this onus are neither perverse nor arbitrary and, therefore, do not call for interference."
15. T he Hon'bl e High Cour t h as re iter ated the s ai d pro pos ition in the c ase of Dee pak M ittal ( 2013) 361 IT R 131( P&H ) as under:
"9. When consistent case of the assessee, despite notice given by the Assessing Officer to give details of the expenditure made on earning of exempted income in the nature of dividend, version of the assessee was that he had not made any expenditure on earning such income, the Assessing Officer in terms of sub-section 2 of Section 14-A of the Act was to proceed further to collect such material or evidence to determine expenditure, if any, incurred by the assessee but the Assessing Officer instead relying on Rule 8-D of the Rules applied as a formula, applicable to an assessee who has incurred expenditure by way of interest which is not directly attributable to any particular income or receipt which is not the case of the present assessee, which was clearly a wrong application introduced as a substitute for sub-7 ITA No.1366/Chd/2018
A.Y.2015-16 section 2 of Section 14-A of the Act and thus was not permissible in law.
16. No w appl ying th e af oresaid pro p os ition l aid do wn b y the Hon'bl e High Co ur t to the f ac ts of the presen t c ase , we f ind th at the assessee h ad s tated th at i ts en tire inves tme n ts we re made i n deb t or ien ted mu tu al f unds, th at the co mp an y' s Bo ard of Direc tors h ad pu t in pl ace a pol ic y def in ing f unds where inves tme n ts we re requ ired to be made and mak ing s aid inves tme n t was equ iv al en t to cho os ing f ixed de po s its f ro m v ar ious av ail abl e o p tions wh ich does no t en tail incurr ing an y ex pend i ture. T he asse ssee h ad al so sub mi tted th at i t is a l arge concern and al l inves tme n ts are main l y in el ec tro n ic mode wh ere as ECS cred i t to d iv idend is au to matic al l y done. T hus the assesse e h ad sub mi tted th at the inves tme n ts h ardl y en tail ed incurr ing of an y ex penses. Fur ther the assessee h ad sub mi tted th at i t h ad d is al l o we d ex penses of t wo of its e mpl o yees, be ing 100 % of its Accoun ts Of f icer and 10% s al ar y of its C o mp an y Secre tar y and f urther 46. 30% of sal ar y g iven to thes e persons, on acc oun t of ad min is tr ative ex penses incurred. No w, the Assess ing Of f icer, we f ind, h as recorded h is s ati sf ac tion v is- a-v is the incorrec tnes s of the cl ai m of the assessee wi thou t an y cogen t b as is, as a b are re ad ing of par a 3. 1 of the order, wh e re the Asse ss ing Of f icer h as ex pressed h is s atisf ac tion, re ve al s. T he Assess ing Of f icer h as d isbel ieved the assessee' s c l ai m s ince th e d is al l o wan ce made by the assess ee was min iscul e as co mp are d to the ex penses incu rred on e mpl o yee s benef it ex penses and in teres t ex penses. Cl earl y, th is al one c anno t be the b as is f or d isbel iev ing the assessee' s ex pl an ation and co n ten tion. More p ar ticul arl y, con s ider ing the f ac t the assessee h as ex pl ained as to wh y i t was incur r ing onl y a s mal l amo un t of ex pend iture f or the e arn ing of d iv idend inco me. T he Assess ing Of f icer wh il e re jec tin g assessee' s con te n tion h as no t s tated as to ho w th e con ten tion of the assessee th at s ince al l inves tme n ts we re made in deb t or i en ted f unds and there was a pol i cy l aid do wn f or mak ing the s aid inves tme n ts an d al l inves tme n ts we re mad e el ec tron ic al l y, theref ore, no ex pend iture was incurred, was i ncorrec t. T he Assess ing Of f icer wh il e record ing h is s atisf ac ti on h as ne i the r con trover ted the con ten tion of the assessee, no r h as brough t ou t an y f al l ac y in the cl ai m of the assessee. T he Assess ing Of f icer h as merel y s tate d th at s ince the assessee h ad incurred huge ex penses on e mp l o yees and i n teres t i t c ann o t con tr ibu te onl y a very s mal l por ti on to the e arn ing of div idend inco me. For the above re asons, we f in d 8 ITA No.1366/Chd/2018 A.Y.2015-16 th at the b as is wi th the Asse ss ing Of f icer f or arr iv ing at s ati sf ac tion th at th e cl ai m of the assessee of ex penses incurred f or the pur pose o f e arn ing d iv idend inco me was incor rec t, was ne i ther b ased on an y ev idence, nor h as an y cogen t b as is and was merel y a gener al s tate men t. As hel d by the Hon'bl e jur is d ic tion al H igh Co ur t in the c ase of Abh ishek Indus tr ies L td. And C IT Vs. Dee p ak M i ttal ( supr a), the Assess ing Of f icer had no t exh ib i ted v al id s atisf ac tio n reg ard ing inc orrec tness of th e cl ai m of the asse ssee. T he Assessing Of f icer in the absence of satisf ac tion reg ard ing correc tness of th e cl ai m of the as sessee, coul d no t h ave theref ore proceeded to ap pl y Rul e 8D f or the pur pose of d is al l o win g ex pe nses incurred f or e arn ing exe mp t inco me. For th is re ason, we hol d th at the d is al l o wan ce made u/s 14A amoun ting to Rs. 27, 20, 584/- is un war r an ted and is thereb y d irec ted to be del e ted. "
7. The Ld. counse l for assessee poi nted out that the i mpugned case was i denti cal wi th the assessee havi ng e xpl ai ned the manner of worki ng out suo moto di sal lo wance u/s 14A amounti ng to Rs.6.88 l acs by taki ng i nto consi derati on 1 00% sal ar y of i ts Accounts Offi cer and proporti onate admi ni strati ve e xpenses i ncurred i n rel ati on to the total person al cost and had e xpl ai ned that si nce the i nvestments had been made as per defi ned i nvestment pol i c y of the company in debt based mutual funds whi ch was l i ke choosi ng fi xed deposi ts from various avai l abl e options i t di d not requi re any e xpendi ture. The Ld. counsel for assessee contended that i n the present c ase al so the A. O. had not recorded any sati sfacti on as to why the cl ai m of the assessee as above was i ncorrect, but had summari l y di smi ssed i t hol di ng at para 3.1 of hi s order as under:
"3. 1 I h ave ex amin ed the above sub miss ion of the assessee sub mi tted v ide l e tter d ated 31. 08. 201 7 bu t no t incl ined to acce p t the v ie w th at onl y s al ar y of one e mpl o yee per tains to ex pend i ture attr ibu tabl e to wa rds e arn ing d iv id end inco me. Fro m 9 ITA No.1366/Chd/2018 A.Y.2015-16 the prof it and l o ss acc oun t, i t is observed th at th e assessee h as incurred Rs. 250 7. 05 l akhs as E mpl o yees Benef i t Ex penses and Rs. 1. 28 l akhs on B ank and o ther f in anc i al ch arg es. T he assesse e h as no t f il ed an y ev idence wi th re g ard to the cl ai m th at no bus iness asse ts or f unds ou t of bus iness we r e u til ized or no ad min is tr ati ve ex pend iture i s incurred in e arn ing the d iv idend inco me. Accord ingl y, I am no t s atisf ied wi t h the correc tness of ex penditure cl ai me d b y the ass essee. "
8. The Ld. counsel f or assessee, therefore,, contended that the facts and ci rcumstances in the present case were i denti cal to that i n assessment years 2012-13 and 2013-14 and the di sal l o wance, therefore, made u/s14A of the Act requi red to be d el eted fol l o wi ng the order of the I . T.A. T. i n assessment years 2012-13 and 2013-14. It was further contended that t he I . T.A. T. had a l so accepted the assessee's contenti on that i n vi e w of suffi cient o wn funds avai l abl e, no di sal l o wance of i nterest e xpenses was warranted u/s 14A of the Act. Our attenti on was dra wn to the fi ndings of the I . T.A. T. i n I TA Nos.1258 & 125 9 at pages 17 t o 19 of i ts order as under:
17. T he Ld. counsel f or assessee h as al so r aised the argu men t bef ore us th at in an y c ase no d is al l o wan ce on accoun t of in teres t ex pend i tur e incurred coul d be made by invok in g Rul e 8D( 2)( ii) of the Inco me T ax R ul es, 1962 s ince the assessee h ad no t incurred an y in teres t ex pe n d iture at al l an d al so f or the re as on th at i t h ad en ough o wn sur pl u s f unds av ail abl e wi th i t f or the p ur pose of mak in g inves tme n t. T he Ld. counsel f or assessee h ad de mons tr ated bo th these f ac ts to u s by dr a win g our atten tion to the annu al accoun ts of the assessee f or the i mp ugned as sess men t ye ar. We f ind mer i t in th is con ten tion of the Ld. counsel f or assessee. As po in ted ou t to us, the Annu al Accoun ts of th e assessee sho w to tal f in ance cos t incurred dur ing the ye ar amo un ting to Rs. 7. 60 l acs, ou t of wh ic h onl y 0. 21 l acs was on accoun t of in teres t on over dr af t wh il e the res t rel ated to o ther in teres t ex penses and we re no t in the n ature of borro wing ch arges, as is e v iden t f ro m the de tail prov ided i n 10 ITA No.1366/Chd/2018 A.Y.2015-16 the annu al accou n t of the assesse e and al so pl ace d bef ore us and re produced above. A t the s ame ti me , we f ind th at th e d is al l o wan ce mad e under Rul e 8D( 2)( ii) amo un te d to Rs. 1. 27 l ac s. T he in teres t ex penses attr ibu tabl e to in teres t be ar ing f unds in the presen t c ase no t exceed ing to Rs. 0. 21 l acs the d is al l o wan ce cou l d no t in an y c ase h ave exceeded the s aid amo un t. Fur ther we f ind th at i t h as been cl e arl y de mons tr ated bef ore us th at the assessee h ad suf f ic ien t o wn in teres t f ree f unds to make th e i mp ugned inve s tmen ts and, theref ore, the presu mp tion in s uch c ases is th at the inves tme n t h as been made ou t of the s ame . T he Hon' bl e Pun jab and H ar yan a H igh Cour t h as l aid do wn the s aid pro pos i tion in the con tex t of sec tion 14A, in the c ase of CIT vs M ax Ind i a L td. , IT A No. 186 of 2013 ( O&M ) d ate d 6. 9. 2016, hol d ing as under:
"9. This presumption is unfounded. Merely because the interest free funds with the assessee have decreased during any period, it does not follow that the funds borrowed on interest were utilized for the purpose of investing in assets yielding exempt income. If even after the decrease the assessee has interest free funds sufficient to make the investment in assets yielding the exempt income, the presumption that it was such funds that were utilized for the said investment remains. There is no reason for it not to. The basis of the presumption as we will elaborate later is that an assessee would invest its funds to its advantage. It gains nothing by investing interest free funds towards other assets merely on account of the interest free funds having decreased. In that event so long as even after the decrease thereof there are sufficient interest free funds the presumption that they would be first used to invest in assets yielding exempt income applies with equal force."
"18. In v ie w of the above, no d is al l o wan ce of in teres t ex pend i ture was war r an ted in the f ac ts of the presen t c ase.
19. We theref ore hol d th at in the absence of s atisf ac tion recor ded by the Asse ss ing Of f icer vis- à-v is the incorrec tness of the cl ai m of the assesse e of ex penses dis al l o wab l e u/s 14 A of the Ac t an d f urther on accoun t of suf f icien t o wn f unds av ail able wi th the asses see f or the pu r pose of mak in g inves tme n ts wh i ch e arned exe mp t inco me, th e d is al l o wan ce of Rs. 27, 20, 584/- mad e u/s 14A o f the Ac t was un warr an ted in the p resen t c ase. T he order of the Ld. C IT ( Appe al s ) is, th eref ore, set as ide on th is coun t an d the d is al l o wan ce made u/s 14 A amo un ting to Rs. 27, 20, 584/- is d irec ted to be del e ted. T he grounds of appe al r aised b y the assessee are, the ref ore, al l o we d. "11 ITA No.1366/Chd/2018
A.Y.2015-16 And al so to the fi ndi ngs of the I . T.A. T. in I TA No.775/Chd/2018 rel ati ng to as sessment year 2 014-15 at para 3 of the order as under:
"3. So far as the issue relating to disallowance out of interest expenditure is concerned, the Ld. Counsel for the assessee has submitted that the assessee during the year has not raised any secured or unsecured loans and no interest expenditure has been incurred by the assessee on any loan. The only interest paid by the assessee was in respect of delay on payment of excise duty and service tax. The Ld, DR also could not contradict this factual aspect pleaded by the assessee. Since the assessee did not borrow any interest bearing funds during the year, hence, there is no question of disallowance of expenditure out of the interest expenditure. In view of this, so far as the disallowance u/s 14A of the Act in respect of interest expenditure is concerned, we do not find any justification on the part of the lower authorities in making / confirming the same. Moreover, the Ld. Counsel for the assessee has also relied upon the decision of this Tribunal in the own case of the assessee in relation to the earlier assessment years 2012-13 and 2013-14, wherein, identical issue has been raised in ITA Nos.1258 & 1259/Chd./2016 and the Tribunal vide order dated 1.6.2017, on identical facts has decided the same in favour of the assessee."
9. The Ld. counsel for assessee c ontended that i n the present case al so the assessee had demonstrated the avai l abi l i t y of s uffi ci ent o wn fu nds i n the form of share capi tal s and reserves amounti ng to Rs.212.07 cr ores whi l e the i nvestments for earni ng e x empt i ncome a mounted to Rs.164.27 crores onl y. I t was, therefore, contended that fol l o wi ng the deci si on of the I . T.A. T. i n the precedi ng year no di sal l o wance of i nterest was warranted.
10. The Ld. DR fai r l y conceded that the i ssue had been deci ded by the I . T.A. T. i n favo ur of the assessee in the precedi ng years as poi nted out by the Ld. counsel for 12 ITA No.1366/Chd/2018 A.Y.2015-16 assessee though he vehementl y rel i ed upon the orders of the A.O. and the CI T( A) supporti ng the di sal l o wance so made.
11. We have heard the ri val contenti ons. Admi ttedl y, i denti cal i ssue rel ati ng to di sa l l o wance of i nt erest and admi ni strati ve e xpenses u/s 14A of the Act i n the case of the assessee has been deci ded i n favour of the assessee del eti ng the di sal l o wance of i nterest on account of suffi ci enc y of o wn funds demonstrated by the assessee and the enti re di sal l o wance u/s 14A of the Ac t bei ng del eted on findi ng that the A.O. had not record ed necessar y s ati sfaction regardi ng i ncorre ctness of the cl a i m of the assess ee and the e xpenses di sal l o wed suo moto whi ch was an essenti al prerequi si te for i nvoki ng secti on 14A r. w.r. 8D of the rul es. No di sti ngui shi ng facts have bee n poi nted out by the Ld. D R before us. I n vi ew of the same, the i ssues i nvolved i n the present appeal are squarel y covered by the deci si on of the I . T.A. T. i n the precedi ng years, fol l o wi ng whi ch we del ete the di sal l o wance made u/s 14A of th e Act. The groun d of appeal s rai sed by the assessee are, therefore, al l o wed.
12. I n the resul t, the appeal of the assessee stands al l o wed.
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
संजय गग अ नपण
ू ा ग'ु ता
(SANJAY GARG) (ANNAPURNA GUPTA)
याय क सद य/Judicial Member लेखा सद य/Accountant Member
+दनांक /Dated: 29th March, 2019
*रती*
13 ITA No.1366/Chd/2018
A.Y.2015-16
आदे श क ' त(ल)प अ*े)षत/ Copy of the order forwarded to :
1. अपीलाथ+/ The Appellant
2. ',यथ+/ The Respondent
3. आयकर आयु-त/ CIT
4. आयकर आयु-त (अपील)/ The CIT(A)
5. )वभागीय ' त न0ध, आयकर अपील!य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar