TMI Blog2019 (3) TMI 1857X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri James Kurian, Sr. D.R. For the Revenue : None ORDER PER MADHUMITA ROY- JM: The instant appeal filed by the Revenue is against the order dated 08/09/2017 passed by the Commissioner of Income Tax (Appeals)-2, Ahmedabad arising out of the order passed by the DCIT Cir.-2(1)(2) Ahmedabad under section 143(3) of the Income Tax Act 1961 (herein after referred as the Act ) for assessment year 2014-15 dated 21.11.2016. 2. The Revenue has challenged the order passed by the Ld. CIT(A) in restricting the disallowance of ₹ 91,25,846/- to ₹ 19,311/- made u/s. 14A of the Act. The assessee company has filed his return of income on 26.09.2014 declaring total income at ₹ 49,69,50,500/- followed by revised return of income filed on 31.03.2016 declaring total income at ₹ 49,62,23,790/- which was processed u/s. 143(1) of the Act. Under scrutiny notice u/s. 143(2) of the Act was issued on 31.08.2015 followed by a further notice dated 10.06.2016 u/s. 143(2) r.w.s 129 of the Act due to change in incumbent. A further notice u/s. 143(1) of the Act dated 26.04.2016 and 07.07.2016 were issued and served upon the issue along with the questionnaire. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.90 times 10.17 times 10.17 times 9.75 limes 8.50 times 4.98 times 6.91 times Sr. No. Assessment Year Total income offered for taxation Increase in Investments Excess of total income over increase in investments 1 2008-09 129940463 20000000 109940463 2 2009-10 105724893 69844692 35880201 3 2010-11 200946099 0 200946099 4 2011-12 266826770 0* 266826770 5 2012-13 252258200 17500000 234758200 6 2013-14 392183560 0 392183560 7 2014-15 496275794 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Housing Finance Limited as strategic investment and has received dividend income amounting to ₹ 19,311/- which was exempt. Therefore no disallowance u/s. 14A is called for and in any case, the disallowance cannot exceed to the exempt income of dividend as has been held by Hon'ble ITAT, Ahmedabad in the case of Chudgar Racnhhodlal Jethalal Vs. DCIT in ITA No. 245/Ahd/2013. The relevant para of the decision is reproduced as under:- 12. We have heard the rival submissions and perused the material on record. On perusing the Balance Sheet, we find that there is no change in investments at the year under as on 31st March, 2007 and as at 31st March, 2008 meaning thereby that prima facie no new investments have been made by the Assessee during the year. Further on perusing the Balance Sheet as on 31st 8 ITA No.245/AHD/2013 A. Y. 2008-09 March, 2008 we find that the shares were to the extent of ₹ 1.49 crores and during the year assessee has also earned profit after tax at ₹ 60.39 lacs meaning that the availability of interest free funds with Assessee at the year end were in excess of investments. From the details of other income placed on record, it is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of ₹ 5,000/- if made in the present case will meet the ends of justice. We thus direct accordingly. 3.6. The submission of the appellant has been examined and noticed that appellant has sufficient interest free fund to make investment in the subsidiary company from which dividend has been received. Therefore, the interest disallowance under Rule 8D(2)(ii) is not called for. As regard to disallowance relating to administrative expenses of ₹ 5,41,65/7-computed under Rule 8D(2)(iii), it is noticed that appellant had only exempt income of ₹ 19,311/-. It has been held by Hon'ble ITAT, Ahmedabad in the case of Chudgar Racnhhodlal Jethalal Vs. DCIT in ITA No. 245/Ahd/2013 (supra), that the disallowance cannot exceed to the exempt income of dividend. 3.7. Reliance is also placed on the decisions of jurisdictional ITAT, Ahmedabad in the following cases;- (i) M/s. Shree Laxmi Bidi Trading Co. Vs. DCIT[CO No.315 316/Ahd/2014 dt. 30/03/2015] (ii) Jivraj Tea Limited Vs. DCIT Circle - 1, Surat [ITA No. 866/Ahd/2012 dated 28/08/2014 (Ahmedabad Tribunal) (iii) Wladhusudan Industries Ltd. Vs. ITO [ITA No. 1715/Ahd/2011 dated 13/02 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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