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TMI Blog2018 (6) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as "the Act") dated 29/01/2016 relevant to Assessment Year (AY) 2013-14. 2. The grounds raised by the Revenue per its appeal are as under: "That the ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 92,52,234/- made on account of disallowance u/s. 14A r.w.r. 8D of the Act." On the fact and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above since the assessee has failed to disclose his true income/book profit. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored to the above extent. The appellant craves, to leave, to amend or alter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, the AO disallowed the remaining amount of Rs. 92,52,234/- after adjusting the amount of Rs. 5,28,843/-, which was already disallowed by the assessee in its computation of income. The amount disallowed u/s 14A r.w.r. 8D for Rs. 92,52,234/- was added to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to Ld. CIT(A) who has deleted the addition made by the AO by observing as under: "2.3. I have carefully considered the Assessment Order and the submission filed by the Appellant. The Assessing Officer has made disallowance under section 14A r.w.r. 3D of the I.T. Act and similar disallowance was made in A.Y. 2012-13 wherein CIT(A)-1 vide order dated 26!h May, 2016 has held as under:- "6.4. I have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant Neither the AO nor the appellant has established the nexus between the funds and the Investments, In these circumstances, in the interest of natural justice and in absence of clear cut finding by AO with regard to the nexus, the disallowance should be restricted to the exempt income. Hon'ble ITAT, Mumbai had an occasion to deal with such an issue in case of Daga Global Chemicals Pvt. Ltd. Vs. ACIT (ITA No.5592/Ahd/2012)(dtd.01.01.2015) in which it was held that the disallowance u/s 14A r. w. r. 8D cannot be made in excess of exempt income. Hon'ble Ahmedabad ITAT in the case of Chudgar Ranchodlal Jethalal v/s DCIT in ITA.245/AHD/2013 and Hon'ble Delhi High Court in the case of Joint Investments Pvt. Ltd. v/s CIT in ITA 117/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the order of CIT(A) for A.Y. 07-08, Assessee had preferred appeal before Hon'ble ITAT. We find that the Co-ordinate Bench of Tribunal in ITA NO. 1008/AHD/2011 for A.Y. 07-08 (order dated 04.04.2014) decided the issue in favour of Assessee by holding as under:- 1. Learned CIT(A) has erred in law and in facts in confirming action of AO in disallowing Rs. 5,38,121/-, being weight shortage expenses. Both the lower authorities erred in ignoring the evidences produced by the appellant in the form of correspondences with the parties and debit notes issued by the parties. Ld. CIT(A) ought to have deleted the disallowance. 3. Apropos to ground No.l, the Id.counsel for the assessee submitted that the assessee is engaged in trading of ready c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious parties to whom the material was supplied, therefore the authorities below were not justified in disallowing the expenses claimed by the assessee. We therefore direct the AO to delete this addition. Accordingly, ground raised by the assessee is allowed. 8. Before us, Revenue has not brought on record any material to demonstrate as to how the decision of Hon'ble Tribunal for A.Y. 07-08 in Assessee's own case would not be applicable to the facts of the case for the year under appeal more so when ld. CIT(A) himself has noted that identical issue arose in A.Y. 07-08 and had followed the order of his predecessor. In view of the aforesaid facts and respectfully following the decision of the co-ordinate Bench of the Tribunal, this ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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