2019 (11) TMI 132 - AT - Income Tax

Tribunal Modifies 2012-13 Appeal for Statistics, Upholds 2013-14 CIT(A) Rulings on Rule 8D(2) Clauses.

Gopal Kashinath Lad Versus DCIT, Circle Dhule. And ACIT, Circle Dhule. Versus Gopal Kashinath Lad &Vice-Versa

The Tribunal partially allowed the appeal for A.Y. 2012-13 for statistical purposes, directing the Assessing Officer to adhere to the CIT(A)'s ... Disallowance u/s 14A read with Rule 8D(2) - HELD THAT:- We should direct the Assessing Officer to give effect to the said direction of the CIT(A) by passing a speaking order after considering the ‘principle of proportion’, ‘principle of presumption’ and the Jurisdictional High Court’s judgement in the cases of (i) CIT vs. Reliance Utilities & Powers Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and (ii) HDFC Bank Ltd. vs. CIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] etc. Accordingly, the Assessing Officer is directed to pass a speaking order in a time bound manner within the three months from the date of pronouncement of this order after granting a reasonable opportunity of being heard to the assessee. Accordingly, the issue relating to the applicability of the proportions under clause (ii) of Rule 8D(2) of the Rules is allowed for statistical purposes. Applicability of the provisions of clause (iii) of Rule 8D(2) of the Rules - HELD THAT:- Assessee did not have much to argue in this respect except relying on the ground. On perusal of the order of the CIT(A), we find the CIT(A) rightly complied with the provisions of the said clause (iii) of Rule 8D(2) of the Rules. Therefore, we find no reasons to interfere with the same. Accordingly, the relevant ground on this issue stands dismissed. Issues Involved:- Appeal in ITA No.2770/PUN/2016 for A.Y. 2012-13 by Assessee- Disallowance under section 14A of the I.T. Act, 1961 read with Rule 8D(2) of the I.T. Rules, 1962- Appeal in ITA No.783/PUN/2017 and ITA No.1048/PUN/2017 for A.Y. 2013-14 by both Revenue and Assessee- Applicability of provisions of section 14A r.w. Rule 8D(2)Analysis:1. Appeal in ITA No.2770/PUN/2016 for A.Y. 2012-13 by Assessee:- The primary issue raised pertains to the disallowance under section 14A of the I.T. Act, 1961 read with Rule 8D(2) of the I.T. Rules, 1962.- The Assessing Officer disallowed an amount under clauses (ii) and (iii) of Rule 8D(2) during the assessment proceedings.- The CIT(A) directed the Assessing Officer to compute the disallowable interest applying the 'principle of proportion' under clause (ii) and confirmed the disallowance under clause (iii) of Rule 8D(2).- The Tribunal found the Assessing Officer's order lacking a speaking order on the 'principle of proportion' issue and directed a time-bound compliance with the CIT(A)'s direction, citing relevant judicial precedents.- The Tribunal allowed the issue of applicability of proportions under clause (ii) of Rule 8D(2) for statistical purposes.- On the issue of clause (iii) of Rule 8D(2), the Tribunal upheld the CIT(A)'s decision, dismissing the relevant ground.2. Appeal in ITA No.783/PUN/2017 and ITA No.1048/PUN/2017 for A.Y. 2013-14 by both Revenue and Assessee:- The key issue raised in cross appeals by both parties relates to the applicability of section 14A r.w. Rule 8D(2).- The Assessing Officer made additions under clauses (ii) and (iii) of Rule 8D(2), leading to appeals before the CIT(A) and subsequently to the Tribunal.- The CIT(A) partly allowed the assessee's appeal, leading to cross appeals before the Tribunal.- The Tribunal noted that the Assessing Officer had already granted relief regarding the addition under clause (ii) of Rule 8D(2) and dismissed the relevant grounds not pressed by the assessee.- On the disallowance under clause (iii) of Rule 8D(2), the Tribunal found no reason to interfere with the CIT(A)'s decision, dismissing the relevant ground.- As the appeal of the assessee was dismissed, the cross appeal by the Revenue was also dismissed as infructuous.3. Overall Outcome:- The appeal for A.Y. 2012-13 was partly allowed for statistical purposes, while the cross appeals for A.Y. 2013-14 were dismissed.- The Tribunal directed the Assessing Officer to comply with the CIT(A)'s direction within a specified timeframe, emphasizing the 'principle of proportion' and relevant judicial precedents in the A.Y. 2012-13 case.- In the A.Y. 2013-14 case, the Tribunal upheld the CIT(A)'s decision on the applicability of Rule 8D(2) clauses, resulting in the dismissal of relevant grounds in both the assessee's and Revenue's appeals.