2022 (9) TMI 249

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....ed 29.08.2017 arising from the assessment order dated 29.02.2016 passed by the Assessing Officer (AO) under Section 153A r.w. Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2012-13. 2. The grounds of appeal raised by the Revenue reads as under: "The Ld. CIT(A) has erred in deleting the addition made by the AO u/s 14A o the I.T. Act. 1961 read with 8D when the decision of Hon'ble ITAT in the case of ITO Vs. Madhav Tech. India (P) Ltd. has not attended finality and department has recommended further appeal in Hon'ble Court." 3. The grounds of Cross Objection by the Assessee reads as under: "(1) That in the absence of satisfaction as contemplated u/s 14A(2) of the Income-tax Act, 1961 (the Ac....

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....addition of Rs.7,75,24,213/~and Rs.2,32,268/-made by the AO under Rule 8D(2)(ii) and 8D(2)(iii) respectively read with section 14A of the Act, under the normal provisions as well as working of book profit under section 115JB of the Act. The appellant has earned dividend amounting to Rs.4,06,63,808/-, and no such disallowance under section 14A has been made, though the dividend income has been treated as exempt. 6.1 It is observed that AO has computed disallowance under Rule 8D(2)(ii) for Rs.7,75,24,213/- and Rs.2,32,268/- under Rules 8D(2)(iii) respectively, considering that this amount has been spent to earn such dividend income, which is disputed by the appellant. 6.2 I have considered the facts and circumstances of the ....

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....nd Demat expenses of Rs.1,25,417/- total of the same comes to Rs. 1,47,940/- therefore, the balance amount is directed to be deleted, thereby, the AO is directed to restrict the disallowance under Rule 8D(2)(iii) to Rs.1,47,940/- only, under normal provision and under 115JB. 6.4 Accordingly, looking to the facts and circumstances of this case and keeping in view of the decision of Hon'ble ITAT in the case of ITO vs. Madhev Tech (India) P. Ltd. (2011-TIOL-546-ITAT-DEL) and other case laws, it is held that in view of the above discussion, the AO is directed to reduce the disallowance to Rs. 1,47,940/- under normal provision and under 115JB. 6.5 book profit under section 115JB of the Act, it is to be mentioned that the AO....

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....ling the relevant details. The CIT(A) has not provided any facts and figures or any process of reasoning by which it accepted and endorsed the explanation of the assessee that no expenditure towards interest was incurred for investments yielding tax free income. The CIT has granted relief on account of aforesaid disallowance in a very casual manner by way of an indescript order as reproduced above. The CIT(A) has shifted the onus on the Assessing Officer wrongly to establish the nexus between the investment the utilization of loan amount on which interest was paid. 7. We are unable to understand the course of action adopted by the CIT(A) while granting relief. The action of the CIT(A) is without any logic. The onus lies upon the assessee....

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.... claimed to be exempt. The assessee has responded to the show cause notice. The Assessing Officer has made elaborate discussion on the issue and has resorted to the disallowance under Section 14A of the Act. Noticeably, the assessment was framed under Section 153A where requisite information/accounts of the assessee were called for. Needless to say, the satisfaction of the Assessing Officer is the assent of his mind. The Assessing Officer has inquired on the issue having regard to the details/information filed by the Assessee. The text and tenor of the assessment order shows that the Assessing Officer has objectively looked into the issue having regard to the details/accounts of the assessee and thus the contention of arriving at contemplat....