IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `SMC-II', NEW DELHI
BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT M EMBER
ITA No. 5376/Del/2014
Assessment Year: 2009-10
Arun Kumar Mohata, Vs. ITO,
B-60, Sector-44, Ward-22(2),
Noida New Delhi
PAN:AEYPM2882Cq
(Appellant) (Respondent)
Appellant by : None
Respondent by : Sh. Manoj Kr. Chopra, Sr. DR
Date of Hearing : 13.07.2015
Date of pronouncement : 16.07.2015
ORDER
This appeal is filed by the assessee against the order dated 30.07.2014 of
Ld.CIT(A), XXIII, New Delhi pertaining to the Assessment Year 2009-10 on the
following grounds:-
"1. On the facts and circumstances of the case, the order passed by the Ld.
CIT (Appeals) is bad both in the eye of law and on facts.
2. That the Ld. CIT (Appeals) is wrong in law as well as in facts in partly
upholding the order of Assessing Officer.
3. That the Ld. CIT (Appeals) erred on facts and in law by upholding the
addition made by the Ld. Assessing Officer of Rs.25950/ - on account of
travelling expenses, which has not been claimed by the assessee in his
computation of income. Merely showing the expenses in his profit & loss
account submitted with Ld.AO does not become a part of expenses claimed
against income earned. The same was not considered as a allowable expense
in the return of income file. The ld. CIT (Appeals) also did not look into the fact
and without examining the computation of income, additi on made was upheld,
which is totally illegal and unwarranted. This was a gross mistake apparent on
record.
That the Ld. CIT (Appeals) erred on facts and in law by upholding the
disallowances under section 14A r.w Rule 8D(2)(i) made by the Ld. Assessing
Officer of amounting Rs.1,09,192/-. When the entire expenses claimed in the
return against taxable income was disallowed and addition made to taxable
income, then there is no need to invoke the Section 14A of Income tax act, 1961.
Section 14A r.w Rule 8D(2)(i) applies in case assessee incurred any expenses to
Page 2 of 3
earn exempted income during the year. Further, in case of ACIT V Punjab Sta te
Co-op & mktg, Hon. Chandigarh tribunal halt that In A.Y. 2007-08, the
assessee received dividend of in respect of investment i n shares made in
earlier years. No investments were made during the year. It was claimed that
the investment in the earlier years was made out of reserves & surplus and
tha t there was no expenditure incurred during the year to earn the dividend.
The Assessing Officer held that as in the earlier years, the assessee had
borrowed funds, section 14A applied. It was held that if there is no nexus
between borrowed funds and investments made in purchase of shares,
disallowance under section 14A is not warranted. (A.Y. 2007-08).
ACIT v. Punjab Sta te Co-op & Mktg. (2011)(Chandigarh)(Trib.)
When the all expenses claimed in return of income was disallowed, there is no
need to made further disallowances under section 14A. "
2. None appeared on behalf the assessee despite issue of notice. Under these
circumstances I dispose of this case ex parte, qua the assessee, after hearing the ld
DR.
3. Facts of the case as given by the assessee are as follows:-
"1. That the appellant filed his return of income for the Assessment Year
2009-10 declaring a total income at Rs. 3,36,890/- which was processed u/s
143(1).
Subsequently, the Ld. A.O. allegedly initiated proceedings and passed order
under section 143(3). The appellant filed its return of income on 29.07.2009
declaring the income of Rs.3,36,890.00.The Ld A.O first disallowed all the
expenses Rs. 1,72,494 claimed in the return and then further addition made
U/s 14A of income Tax Act, 1961 for Rs.1,09,192/- alongwith expense of
Rs.25950/- which is not claimed by the assessee in his computation of income.
Once disallowing all the expenses, there is no need to invoke the section 14A.
2. That aggrieved with the above additions and action of Ld. A.O., the
assessee filed an appeal before the Commissioner of Income Tax (Appeals) -
XXIII, New Delhi. The Ld. CIT (Appeals) -XXIII vide order dated 30th July, 2014,
Appeal No. 3607 11-12, only allowed the interest expenses of Rs. 1,41,076 and
for ground of appeals LD. CIT (Appeals) did not consider the submission made
and various Judgement of Hon'ble High Court and tribunal. Hence, the
appellant has grievance against it. Consequentially, this appeal is being filed. "
4. On the addition of Rs.25,950/-, the assessee claimed that he has not claimed
this deduction it in his computation of income. If this is true, no addition can be
sustained. As this requires factual verification I set aside the matter to the file of the
AO with a direction to make the addition, if the assessee has not claimed this
amount as expenses in its computation of income. Otherwise this would be a
double addition and relief has to be granted.
Page 3 of 3
5. The second issue is the disallowance u/s 14A read with Rule 8D(2)(i). The
assessee submits that the entire expenses claimed in the return against taxable
income were disallowed and under these circumstance further addition cannot be
made u/s 14A.
6. We find that the first appellate authority in his order at Pg 5 para 4.2 held as
follows:-
"As regards the disallowance u/s. 14A r.w. Rule 8D(2)(iii) amounting to
Rs.1,09,192/- @ 0.5% of average investments made by the appellant, the
arguments of the appellant and the Id. AR are lacking in merit as they have not
been able to demonstrate tha t the appellant has earned dividend income of
Rs.5,62,841/- without incurring any expenses at all. Thus, Ground No. 5 of the
appellant stands dismissed. "
7. The AO noted that the assessee has not carried on any business during the
year. The assessee has claimed various expenses. The assessee has not
demonstrated as to how these expenses are unconnected with earning of dividend.
Under these circumstances, I uphold the order of the first appellate authority and
dismiss this ground of the assessee.
8. In the result the appeal of the assessee is allowed in part.
Order pronounced in the Open Court on 16th July, 2015.
-Sd/-
(J. SUDHAKAR REDDY)
ACCOUNTANT MEMBER
Dated:16th July, 2015
AKK
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
TRUE COPY
By Order,
ASSISTANT REGISTRAR
|
