2022 (12) TMI 447

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... The assessee has taken the following grounds of appeal:- "(1) That on facts and in law the learned Commissioner of Income tax (Appeals) has grievously erred in confirming the disallowance of Rs.15,98,880/- made U/S.14A of the Act while computing the income under the normal provisions of the Act. (2) That on facts and in law the learned Commissioner of Income tax (Appeals) has grievously erred in confirming the disallowance of Rs.17,77,659/- made U/S.14A of the Act while computing the income under section 115JB of the Act. (3) That on facts, and in law, the learned CIT (A) has grievously erred in confirming the disallowance of Rs. 3,17,222/- in respect of closing balance of M/s Jay Metal Industries. (4) ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rs.6,83,177/- which has been included in the total income and share of profit amounting to Rs.66,48,731/- which has been claimed as exempt from tax. Since the appellant has earned exempt income from the partnership firm, hence disallowance as per Rule 8D is required to be made on the investment in the partnership firm also. This is as per the decision of Spl. Bench of ITAT, Ahmedabad in the case of Vishnu Anant Mahajan, 22 taxmann.com 88 (And.) (SB). It is also seen that the Assessing Officer has made disallowance out of net interest income only. Thus he has given relief of the income earned form the firm which has been offered for taxation. It may also be mentioned here that the appellant on its own had made disallowance of Rs. 1,04,293/-....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....in contention is that since the assessee's own capital far exceeds the investment in funds bearing exempt income, coupled with the fact that no fresh investments were made during the year under consideration, there is no case for disallowance so far as the disallowance relatable to interest expenditure is concerned. Further, regarding the disallowance so far as administrative expenditure is concerned, the counsel for the assessee submitted that the assessee has itself disallowed a sum of Rs. 1.78 lakhs in it's return of income and accordingly, no further disallowance is called for in respect of administrative expenditure as well. In response, DR relied upon the observations made by Ld. CIT(Appeals) in the appellate order. 6. We have hear....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ured that interest bearing funds was not invested by assessee and, thus, no disallowance under section 14A to be made. In view of the above, there is no reason for disallowance so far as proportionate interest expenditure of Rs. 14,62,410/- is concerned. 6.1 However, so far as administrative expenses is concerned, we observe that the assessee has itself disallowed a sum of Rs. 1.78 lakhs in its return of income, which as per the counsel is adequate to cover disallowance of administrative expenses. The Ahmedabad Tribunal in the case of Axis Bank Ltd.[2017] 79 taxmann.com 187 (Ahmedabad - Trib.) held that administrative expenses need to be disallowed under section 14A of the Act. The Kolkata Bench of the ITAT in the case of Coal India [I.T....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s ground relates to Ld. CIT(Appeals) confirming the disallowance of Rs. 17,77,659/- made under section 14A of the Act while computing income under section 115 JB of the Act. The counsel for the assessee drew our attention to page 82 of the paper book and submitted that this issue is directly covered in favour the assessee by order of ITAT for assessment year 2012-13 in the assessee's own case. In response, DR relied upon the observations made by the assessing officer and Ld. CIT(Appeals) in their respective orders. 9. We have heard the rival contentions and perused the material on record. Recently the Supreme Court of India in the case of Atria Power Corporation Ltd.[2022] 142 taxmann.com 413 (SC) dismissed the SLP of the Department agai....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....-. The AO held that the assessee was unable to explain the reason for the difference and accordingly added the above amount to the income of the assessee. In appeal, Ld. CIT(Appeals) held that the assessee has not furnished any acceptable verification and documentary evidences in support of this difference, and accordingly confirmed the aforesaid addition on account of bogus credit balance/liability. 12. Before us, counsel for the assessee has submitted that the entire difference is primarily on account of opening balance in the books of the assessee and its creditor M/s Jay Metal Industries. He is also produced before us copy of Ledger account of M/s Jay Metal Industries for assessment years 2009-10 and 2013-14 and also the contra Ledge....