TMI Blog2018 (10) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleged investment in SBI Premier Liquid Mutual Fund should have been separately calculated at ₹ 1,05,000/- rather than making it a part of average investment because the specific details of the nexus of interest bearing funds to the investment in the alleged mutual fund are appearing on record. We therefore hold that the disallowance made u/s 14A of the Act r.w.s. 8D of IT rules should be restricted to ₹ 3,47,930/- only. In the result Ground No.1 of the assessee’s appeal is allowed. Deduction claimed to reduce the disallowance offered for tax u/s 14A - Held that:- The case of M/s. Goetze India Ltd [2006 (3) TMI 75 - SUPREME COURT] will not be applicable in the facts of the assessee because in the instant appeal the issue is not related to filing of revised return. Rather in the instant appeal the issue was related only to the correct calculation of disallowance u/s 14A of the Act. It was duly submitted by the assessee during the course of assessment proceedings but no weightage was given by the assessing authority to said calculation. Therefore Ground No.2 of the assessee is also allowed. - ITA No.589/Ind/2017 - - - Dated:- 18-10-2018 - SHRI KUL BHARAT, JUDICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.w.s. Rule 8D of I.T Rules by virtue of which an amount of ₹ 11,27,042/- was disallowed while computing the income. Thereafter it was revealed that as the assessee had to invest ₹ 4 crores in SBI Premier Liquid Mutual Fund in the last week of the financial year for just 7 days inadvertently disallowance u/s 14A of the Act was calculated for the whole year by adding the alleged investment of ₹ 4 crores as a part of average investment. Revised working was furnished before the assessing authority for considering the correct claim of disallowance u/s 14A of the Act and reduce the disallowance to ₹ 3,47,930/-. However this contention of the assessee did not find any favour from the Ld. A.O and he maintained the disallowance u/s 14A at ₹ 11,26,875/-. Ld.A.O also made an addition towards valuation of closing stock by invoking the provisions of section 145A of the Act at ₹ 55,52,139/-. 4. Aggrieved assessee preferred an appeal before Ld.CIT(A) on both the issues relating to valuation of closing stock as well as disallowance u/s 14A of the Act and partly succeeded as Ld.CIT(A) gave no relief to the ground raised against the disallowance u/s 14A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that at the outset, the judgment in the case of M/s. Goetze India Ltd 284 ITR 323 (SC) was on a limited issue or revised claim by submitting a letter in the nature of rectification. In that case, assessment proceedings were not completed u/s 143(3) of the Act but the return filed on 30.11.1995 u/s 139 of the Act was sought to be revised by a letter dated 12.01.1998 to the Assessing Officer by claiming deduction. That during assessment as well appellate proceedings question can be raised for the first time having a bearing on tax liability of the assessee. Such powers are inherent for determination of correct income as held by Supreme Court in the case of M/s. National Thermal Power Company Ltd vs. CIT (1998) 229 ITR 383. It is humbly submitted that the assessee is entitled to raise the issue for the first time at any stage if the omission to raise it earlier was bona fide and not willful or unreasonable. 8. Per contra Ld. Departmental Representative supported the orders of lower authorities. 9. We have heard rival contentions and perused the records placed before us. The grievance of the assessee relates to the disallowance u/s 14A of the Act. In the income Tax retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ₹ 4 crores invested in Mutual Fund on 27.03.2013 - Rs.1,05,000/- TOTAL Rs.11,26,875/- Rs.3,47,930/- * At the instance of State Bank of India, the lender bank, the company invested an amount of ₹ 4 crores in SBI Premier Liquid Mutual Fund on 27.03.2013 for short duration, which was encashed on 04.04.2013 i.e. within 7 days only. Therefore it was claimed that for calculation of average investment, ₹ 4 crores invested on 27.03.2013 should not be considered and interest for 7 day on ₹ 4 crores may be added for the purpose of disallowance u/s 14A which works out to ₹ 1,05,000/- 10. We have perused the above working of the disallowance u/s 14A of the Act and observe that an apparent mistake was pointed out by the assessee during the course of assessment proceedings itself before the Ld.A.O by way of providing the revised calculation of the disallowance u/s 14A r.w.s.8D of the IT rules. It has been consistently held in various judgments that during the course of assessment proceedings if any new claim or a revised claim by way of filing a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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