TMI Blog2021 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... m of assessee u/s. 10(34) of the Act, the Ld. AO has made the quantum of disallowance by invoking the Rule 8D of the Income-tax Rules, 1962. The accounts of the assessee has been examined, in absence of which the order of disallowances and Ld. AO is not sustainable. It appears from the documents submitted before us that for the AYs. 2010-11, 2011-12 and 2012-13 though such query in respect of disallowance under section 14A/Read with Rule 8D was raised by the AO, after examining the same manner and method of working out disallowance of administrative expenses no further disallowance was made by the AO accepting the same as fair and reasonable. Under the circumstances of the case, we find no reason as to why the suo motu disallowance made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead case. 3. The assessee has made an application on 09-10-2020 for admission of additional Grounds of appeal which was not therein initially before us, copy whereof was also submitted to the Ld. DR. 4. At the time of hearing of the instant appeals, the Ld. Counsel appearing on behalf of the assessee submitted before us that the omission of this ground was genuine and a bonafide mistake and not intentional and malafide. It is relevant to mention that this ground relates to not granting credit of advance tax to the tune of ₹ 20 lakhs and not allowing full credit of ₹ 77,00,340/- by the Revenue. 5. We have perused the said application dt. 09-10-2020 for admission of said additional grounds of appeal. In fact, this particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it also reflects from the order passed by the Ld. AO. However, such explanation as rendered by the assessee was not found acceptable and considering the CBDT Circular dated 11-02-2014 and the recent Amendment in Rule 8D vide Notification No. S.O. 1949 E [F. No. 370142/7/2016-TPL] dated 02-06-2016, the disallowance of expenditure u/s. 14A of the Act the Ld. AO computed the disallowance of ₹ 2,67,07,781/- at 1% of the average monthly balance of the investment. Since the assessee has suo motu disallowed expenditure of ₹ 4,69,487/-, the balance amount of ₹ 2,62,38,194/- was disallowed/added back to the total income of the assessee by the AO. 7. In appeal, the Ld. CIT(A) has been pleased to direct the AO and to consider th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctness of the claim of assessee u/s. 10(34) of the Act, the Ld. AO has made the quantum of disallowance by invoking the Rule 8D of the Income-tax Rules, 1962. The accounts of the assessee has been examined, in absence of which the order of disallowances and Ld. AO is not sustainable. In this regard on the same set of facts, the judgment which has been cited by the Ld. Counsel appearing for the assessee in the matter of REI Agro Ltd. has been considered by us. The Ld. Tribunal (ITAT Kolkata) in the matter of REI Agro Ltd. for the assessment year 2009-10, ITA No. 1811/K/2012 by its order dt. 14-05-2013 has been pleased to observe as follows:- 9. We find from the facts of the above case that the AO has not examined the accounts of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of administrative expenses with reference to establishment and expansion expenses has been consistently followed by Revenue. It appears from the documents submitted before us that for the AYs. 2010-11, 2011-12 and 2012-13 though such query in respect of disallowance under section 14A/Read with Rule 8D was raised by the AO, after examining the same manner and method of working out disallowance of administrative expenses no further disallowance was made by the AO accepting the same as fair and reasonable. Under the circumstances of the case, we find no reason as to why the suo motu disallowance made by the assessee to be disturbed in the same set of factual position. In this regard, we have considered the judgment passed by the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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