2020 (2) TMI 1749

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....t assessment years but the facts and issues involved in both the appeals are identical except for the assessment year and the amounts involved and therefore the submissions made by them while arguing one appeal would be equally applicable to the other appeal also and thus both the appeals can be heard together. In view of the aforesaid submissions of both the parties, we, for the sake of convenience, proceed to dispose of both the appeals by a consolidated order. We, however, proceed with the facts in ITA No. 2374/PUN/2017 for A.Y. 2012-13. 3. The relevant facts as culled out from the material on record are as under :- Assessee is a company stated to be engaged in the business of trading and manufacturing of electronic and ....

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....llowing due process of law." 4. Similar disallowance u/s 14A of the Act was made by AO in A.Y. 2013-14 & the same was upheld by Ld.CIT(A). Aggrieved by the order of Ld.CIT (A) similar grounds have been raised by the assessee in ITA No. 2375/PUN/2017 for A.Y. 2013-14. 5. All the grounds being inter-connected are considered together. 6. During the course of assessment proceedings, AO noticed that assessee was having investments but the amount of expenditure attributable to the exempt income was not disallowed by the assessee while computing the total income of the assessee. AO therefore on the basis of the methodology prescribed under Rule 8D of I.T. Rules worked out the disallowance u/s 14A of the Act at Rs. 5,49,265/- for....

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..... 2012-13 and Rs. 6,49,557/- for A.Y. 2013-14. It is thus seen that the disallowance u/s 14A worked out by AO is much more than the exempt income earned by the assessee. We find that the Hon'ble Punjab and Haryana High Court in the case of PCIT Vs. State Bank of Patiala (2018) 99 Taxmann.com 285 has held that the amount of disallowance u/s 14A of the Act has to be restricted to the amount of exempt income only and not at a higher figure. We find that against the aforesaid order of Punjab and Haryana High Court, Revenue filed S.L.P. before the Hon'ble Apex Court and the S.L.P. was dismissed by the Hon'ble Apex Court (2018) 99 Taxmann.com 286 (SC). We further find that Hon'ble Delhi High Court in the case of PCIT Vs Caraf Builders & Cons....