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2016 (3) TMI 1017 - ITAT LUCKNOW

2016 (3) TMI 1017 - ITAT LUCKNOW - TMI - Treatment to interest income - Held that:- We find that in assessment year 2005-06 and 2006-07 and also in assessment year 2009- 10, the Tribunal has restored back the matter to the file of the Assessing Officer for fresh decision with the direction to readjudicate the issue afresh in the light of the order of the State Government dated 03/04/80. Hence, in the present year also, we set aside the order of CIT(A) and restore the matter back to the file of t .....

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for the present year. In Para 5 of the assessment order, the Assessing Officer has stated that the computation of disallowance u/s 14A of the Act is not in accordance with the provisions of Rule 8D and thereafter, the Assessing Officer has worked out the disallowance as per Rule 8D of the Act. We have also discussed earlier in this order that if the assessee gives actual working of the amount of expenses incurred for earning exempt income then the same has to be examined by the Assessing Officer .....

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le 8D and since the working of the assessee regarding estimation of the expenses is not as per Rule 8D, the reasoning given by the Assessing Officer for not accepting the working of the assessee that the same is not as per Rule 8D, is cogent reasoning in our considered opinion and therefore, none of the various judicial pronouncements cited by Learned A. R. of the assessee is rendering any help to the assessee in the present case. - Decided against assessee

Addition of amount received .....

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The same is deleted. - Decided against revenue - ITA No.360/LKW/2015 - Dated:- 19-2-2016 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Shri R. C. Jain, F.C.A. For The Respondent : Shri Amit Nigam, D. R. ORDER PER A. K. GARODIA, A.M. This is assessee s appeal directed against the order passed by learned CIT(A)-II, Lucknow dated 22/02/2015 for the assessment year 2010-2011. 2. Ground No. 1 is as under: 1.1 Because the funds parked by the ass .....

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the Government having decided that the interest on such funds could not be appropriated by the assessee company towards its income, the learned CIT(Appeals) erred in upholding the action of the learned Assessing Officer of treating such interest of ₹ 5,59,454/- as income of the assessee company. 1.3 Because, in any case, the deposit account having been seized/ attached by the Provident Fund Commissioner and the assessee company having no control over these funds, the interest on such fund .....

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nal order in assessee s own case for assessment year 2009-10 in I.T.A. No.538/Lkw/2012 dated 23/01/2015 is available on pages 26-46 of the paper book and in particular, our attention was drawn to Para No. 2-5 of this Tribunal order. 4. Learned D. R. of the Revenue supported the orders of the authorities below. 5. We have considered the rival submissions. We find that in assessment year 2005-06 and 2006-07 and also in assessment year 2009- 10, the Tribunal has restored back the matter to the file .....

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late authority erred in confirming the addition of ₹ 40,60,400/- made by the Assessing Officer u/s 14A of the Income Tax Act, 1961 read with rule 8D of the Income Tax Rules, 1962. 2.2 Because the learned 1st appellate authority failed to appreciate that the Assessing Officer applied Rule 8D in a mechanical manner without application of mind and without regard to facts and reply of the assessee. Though the assessee on its own submitted the working of disallowance at ₹ 47,827/- being t .....

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as beyond the jurisdiction of the learned assessing officer and the learned first appellate authority erred in sustaining the addition made by the Assessing Officer. 2.4 Because the issue of disallowance u/s 14A on identical facts having been decided in assessee's favour by the Hon'ble ITAT in ITA no.538/Lkw/2012 for AY 2009-10 vide order dated 23/01/2015 in assessee's own case, the learned 1st appellate authority erred in not following the ITAT order. 7. It was submitted by Learned .....

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r 2009-10 in I.T.A. No.538/Lkw/2012 dated 23/01/2015, pages 26-46 of the paper book, relevant pages 45-46. (ii) Tribunal order in case of Hindustan Motors Ltd. vs. DCIT in I.T.A. No.171/Kol/2012 dated 20/11/2015, paper book page No.122-131, relevant pages 127-129. (iii) Tribunal order in the case of DCIT vs. Jindal Photo Limited in I.T.A. No.814/Del/2011 dated 23/09/2011, paper book pages 68-75. (iv) Tribunal order in the case of Kalyani Steels Ltd. vs. Addl. CIT in I.T.A. No.1733/Pn/2012 dated .....

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4A of the Act. He further noted that the assessee worked out disallowance u/s 14A at ₹ 47,827/-. Thereafter, he has noted that the computation of disallowance u/s 14A of the Act is not in accordance with the provisions of Rule 8D of the Act. This working of the assessee regarding disallowance u/s 14A of ₹ 47,827/- is available in the written submissions dated 02/11/2012 submitted by the assessee before the Assessing Officer available on pages 1-5 of the paper book. As per this, the a .....

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rovides a working of actual expenses incurred for earning exempted income, then specific defect has to be pointed out by the Assessing Officer before rejecting such working but if the amount of expenses is to be estimated then in our considered opinion, the basis of estimation provided in the statute book as per Rule 8D i.e. 0.5% of average investment has to be adopted and no other basis can be considered for estimating the expenses to be disallowed u/s 14A of the Act and therefore, in our consi .....

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Learned A. R. of the assessee. 10. The first judicial pronouncement cited by Learned A. R. of the assessee is a Tribunal decision in assessee s own case for assessment year 2009-10 and it was pointed out that the relevant Paras of this Tribunal order are Paras 13 to 15. In that order, the Assessing Officer has simply stated that the contention of the assessee is not acceptable whereas in the present year, the Assessing Officer has given reasoning as to why the contention of the assessee is not a .....

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orrectness of the claim of the assessee in respect of such expenditure having regard to the accounts of the assessee, such invocation of rule 14A and application of Rule 8D is not valid. As per the facts of the present case already noted and discussed by us above, we have noted and found that in the present case, the Assessing Officer has recorded his satisfaction with proper reasons that the assessee s claim regarding the amount to be disallowed u/s 14A is not correct. At the cost of repetition .....

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rred for earning exempt income then the same has to be examined by the Assessing Officer and before rejecting the same, the Assessing Officer has to give proper reasons but if the working of the assessee is of the estimated expenditure then in our considered opinion, such working itself is not as per Rule 8D because Rule 8D prescribes a particular manner and method for estimation of expenses incurred for earning exempt income and therefore, if actual detail and working is not made available by t .....

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e in the present case. 11. In view of the above discussion, we find that none of the judgments cited by Learned A. R. of the assessee, including the Tribunal order in assessee s own case in an earlier year is rendering any help to the assessee in the facts of the present case and there is no other argument and therefore, we find no reason to interfere in the order of CIT(A) on this issue. Accordingly, ground No. 2 is rejected. 12. Ground No. 3 is as under: 3.1 Because the learned 1st appellate a .....

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