Income Tax Appellate Tribunal - Ahmedabad
Pritesh Shankarlal Shah, Baroda vs Dcit, Circle-3(1), Ahmedabad on 24 November, 2021
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'C' अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, AHMEDABAD (Convened through Virtual Court) BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I.T.A. Nos. 359 & 360/Ahd/2019 ( नधा रण वष / Assessment Years : 2012-13 & 2013-14) Pritesh Shankarlal Shah बनाम/ DCIT 3/A, Jay Santoshi Nagar Circle -3(1), Race Course Vs. Road, Baroda Society, Nr. Utkarsh Petrol Pump, Karelibaug, Baroda थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AOEPS8453F (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri S. N. Divatia, A.R. यथ क ओर से/Respondent by : Shri V. K. Singh, Sr.DR सन ु वाई क तार ख / Date of 16/09/2021 Hearing घोषणा क तार ख /Date of 24/11/2021 Pronouncement आदे श/O R D E R PER PRADIP KUMAR KEDIA - AM:
Both captioned appeals have been filed at the instance of the assessee against the respective orders of the Commissioner of Income Tax (Appeals)-3, Vadodara (CIT(A)' in short), both dated 13.12.2018 arising in the assessment orders dated 13.03.2015 & 18.03.2016 passed by the Assessing Officer (AO) under s. 143(3) of I T A N o s . 3 5 9 & 3 6 0 / Ah d / 1 9 [ P r i t e s h S .
Shah vs. DC IT] A.Y. 2012-13 & 2013-14 - 2 -
the Income Tax Act, 1961 (the Act) concerning A.Ys. 2012-13 & 2013-14.
2. The solitary issue involved is addition of Rs.3,60,516/- (A.Y. 2012-13) & Rs. 4,85,643/- (A.Y. 2013-14) confirmed by the CIT(A) on account of disallowance u/s. 14A of the Act.
3. Aggrieved by the order of CIT(A), the assessee preferred appeal before the Tribunal.
4. The learned DR for the Revenue relied upon the findings of the CIT(A) and AO.
5. We have heard rival submissions on the issue. The assessee has not claimed any exempt income. Therefore, no disallowance is permissible in view of the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Corrtech Energy P. Ltd. 372 ITR 97 (Guj.). In another judgment in the case of CIT vs. Vision Finstock Ltd. Tax Appeal No. 486 of 2017 dated 31.07.2017 the Hon'ble Gujarat High Court has once again expressed the similar view and held that disallowance of expenditure in terms of Section 14A r.w. Rule 8D cannot exceed the exempt income itself. It is noticed that SLP(Civil) [Diary No. 13152/2018] filed by the Revenue against the judgment of the Hon'ble Gujarat High Court in Vision Finstock Ltd. (supra) has been dismissed on merits by the Hon'ble Supreme Court vide order dated 07.05.2018. The reference is also made to the decision of Hon'ble Supreme Court of India in CIT vs. Chettinad Logistics (P.) Ltd. (2018) 95 taxmann.com 250 (SC). Thus, in the light of judicial precedents noted above, no additional disallowance is called for under s.14A of the Act in excess of exempt income. This apart, we also notice that the own funds of the assessee I T A N o s . 3 5 9 & 3 6 0 / Ah d / 1 9 [ P r i t e s h S . Shah vs. DC IT] A.Y. 2012-13 & 2013-14 - 3 -
(Rs.150.90 Lakhs) far exceeds the corresponding investment (Rs.63.25 Lakhs) carrying the potential to generate tax free income. Thus, in view of South Indian Bank Ltd. 130 taxmann.com 178 (SC), the disallowance of interest Rs.3,34,528/- under Rule 8D(2)(ii) is not permissible. In the light of aforesaid discussion, the grievance is resolved in favour of the assessee and against the Revenue.
6. In the result, both captioned appeals of the assessee are allowed.
This Order pronounced in Open Court on 24/11/2021
Sd/- Sd/-
(MADHUMITA ROY) (PRADIP KUMAR KEDIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad: Dated 24/11/2021
True Copy
S. K. SINHA
आदे श क त!ल"प अ#े"षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं*धत आयकर आयु,त / Concerned CIT
4. आयकर आयु,त- अपील / CIT (A)
5. 0वभागीय 3त3न*ध, आयकर अपील य अ*धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड9 फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ*धकरण, अहमदाबाद ।