TMI Blog2021 (11) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, therefore, we do not find any infirmity in the order of the ld.CIT(A) in deleting the disallowance on account on interest expenditure. Disallowance of administrative expenses - At the end of the assessee, neither before the AO nor before the CIT(A) nor before the ITAT, it has been demonstrated that a particular amount of expenditure were incurred or sufficient for earning that tax free income. The assessee failed to submit details of investment and as to how those details/investments have been taken care of; whether any employees are devoted towards keeping track of the investment or not. Investment of this much size, does require constant monitoring. It is quite impossible that a tax free income of ₹ 1,42,19,234/- generated to the assessee without incurrence of any energy from the work force. Therefore, we find that in the compelling circumstances, the ld.CIT(A) has taken a shelter by invoking Rule 8D of the Income Tax Rules. Assessee has relied upon the order of the Tribunal in earlier years, wherein according to it, under similar circumstances, disallowances have been deleted. It is pertinent to observe that in the written submissions, no parity of circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.14A restricting calculation of book profit under section 115JB - HELD THAT:- We find that the issue is covered in favour of the assessee by the decision of Special Bench in the case of ACIT Vs. Vireet Investments P.Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] wherein it is held that no increase or decrease can be effected in the book profit calculated under section 115JB on account of certain disallowance made under section 14A. - ITA No. 315/Ahd/2019 And ITA No.174/Ahd/2019 - - - Dated:- 25-10-2021 - Shri Rajpal Yadav, Vice-President And Shri Waseem Ahmed, Accountant Member For the Assessee : None For the Revenue : Shri Vinod Tanwani, CIT-DR ORDER PER RAJPAL YADAV, VICE-PRESIDENT: These are cross appeals by the assessee and the Revenue against common order of the ld.CIT(A)-1, Ahmedabad dated 10.12.2018 passed for the Asstt.Year 2015-16. We dispose of both these appeals by this common order. 2. None appeared on behalf of the assessee. Therefore, after hearing ld.DR and considering material available on record, we proceed to dispose of both the appeals ex parte qua the assessee. 3. First we take assessee s appeal. 4. In this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. 7. Aggrieved assessee, went in appeal before the ld.first appellate authority. Before the ld.CIT(A) the assessee reiterated submissions made before the AO. It was further contended that the assessee had own funds which consisted of ₹ 287.24 towards share capital and reserves surplus, and the amount of ₹ 38.80 cores in the investment so made included an amount of ₹ 28.79 crores invested in Nandan Exim Ltd., which was a strategic investment wholly and exclusively necessary for the purpose of business, and for that reasons the exempt claimed by the assessee did not attract provision of section 14A of the Act. It further contended that the assessee had not utilized borrowed or interest bearings funds for the purpose of investment for earning exempt income, and therefore, no question of invoking provisions of section 14A arose. The ld.CIT(A) after a detailed discussion allowed the claim of assessee vis- -vis disallowance of interest of ₹ 91,46,082/-, while the ld.CIT(A) uphold disallowance of administrative expenses of ₹ 18,20,951/- on the ground that claim of the assessee to make disallowance on adhoc basis was not justified, because there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure incurred by it for earning tax free income of ₹ 1,42,19,234/- though the AO s approach was not correct while working out disallowance of ₹ 1,09,67,033/-, but the ld.CIT(A) has already corrected this and deleted disallowance qua interest expenditure worked out by the AO on the ground that the assessee has sufficient interest free funds. However, at the end of the assessee, neither before the AO nor before the CIT(A) nor before the ITAT, it has been demonstrated that a particular amount of expenditure were incurred or sufficient for earning that tax free income. The assessee failed to submit details of investment and as to how those details/investments have been taken care of; whether any employees are devoted towards keeping track of the investment or not. Investment of this much size, does require constant monitoring. It is quite impossible that a tax free income of ₹ 1,42,19,234/- generated to the assessee without incurrence of any energy from the work force. Therefore, we find that in the compelling circumstances, the ld.CIT(A) has taken a shelter by invoking Rule 8D of the Income Tax Rules. 10. It is also to be observed that the assessee has relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim with any evidence, but simply stated that these flats were utilized for the purpose of business as guest house. Therefore, impugned order on this issue deserves to be sustained. 14. On due consideration of the above facts and circumstances, we find that the assessee has not filed evidence to prove its claim that the impugned flats were utilized for the purpose of business as guest house. The Revenue authorities have considered two flats out of four to be used for the business purpose, and in respect of remaining two flats notional income was calculated at the rate of ₹ 90,000/- per flat, and thus made addition of ₹ 1,80,000/- under the head income from house property . Before us also, there is no material putforth by the assessee to substantiate its claim. Similar claim of the assessee for the preceding two assessment years i.e. 2011-12 and 2012-13 was rejected upto the Tribunal by holding that there was any material produced by the assessee demonstrating that properties were utilized for the purpose as guest; so was the situation before us also. This being so, in the year under our consideration, we do not find any infirmity in order of the ld.CIT(A) confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such claim was allowed either at the end of the first appellate authority or at the end of the Tribunal. The submissions of the assessee were not disputed by the ld.DR, however, the Revenue is constantly challenging this issue year after year, despite clear cut stand taken by the Tribunal in favour of the assessee in this behalf. Admittedly, there is no change in the facts and circumstances, and therefore it is not appropriate for us to revisit eligibility of claim more so when, for the aforesaid reasons. Assessee has placed on record copies of orders of the Tribunal passed in favour of the assessee in the earlier years. Accordingly, we reject this ground of the Revenue. 20. Ground no.2 and 3 of appeal raise one issue, i.e. the Revenue is aggrieved by order of the ld.CIT(A) in restricting the disallowance made u/s.14A from ₹ 1,09,67,033/- to ₹ 18,20,951/-, and thereby restricting calculation of book profit under section 115JB of the Act. 21. Heard the ld.DR and gone through the record. We find that the issue is covered in favour of the assessee by the decision of Special Bench in the case of ACIT Vs. Vireet Investments P.Ltd., 165 ITD 27 (SB) wherein it is h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
