9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 378 - AT - Income TaxDisallowance u/s 14A - Held that - As no such satisfaction recorded by the AO for rejecting the disallowance claimed by the assessee and correctness of the same. We find that this issue now stands covered in favour of the assessee and against the revenue by the Tribunal decision in assessee s own case for the assessment year 2006-07 and even otherwise on the issue of satisfaction, the Hon ble Kolkata Bench of the Tribunal in the case of REI Agro Ltd. v. Deputy Commissioner of Income-tax, Central Circle-XXVII, Kolkata 2013 (9) TMI 156 - ITAT KOLKATA has held that no disallowance u/s 14A can be made if satisfaction is not recorded with reference to the correctness of the action of the assessee.Even otherwise Rule 8D will not apply for the relevant assessment i.e. assessment year 2007-08, the year under consideration as held by Hon ble Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. 2010 (8) TMI 77 - BOMBAY HIGH COURT . In view of the facts and circumstances of the case that there is no satisfaction recorded by the AO about the correctness of the accounts of the assessee for making disallowance u/s 14A of the Act, no further disallowance can be made by the AO. - Decided in favour of assessee Non granting the TDS credit - Held that - AO has disallowed the claim of the credit for TDS amounting to ₹ 11,95,766/- and credit for TDS as not claimed by the assessee amounting to ₹ 26,10,633/- for the reasons that the TDS certificate were received after filing the return of income. The assessee has filed a copy of rectification letter dated 24.12.2009 addressed to the AO stating that the original TDS certificate mentioning amount of ₹ 26,10,633/- were filed with the AO and also details of TDS claimed for an amount of ₹ 11,95,766/- were filed during the course of hearing before the AO vide letter dated 13.11.2009. In view of the above facts we are of the view that the AO should have allowed credit to the assessee when the assessee has filed rectification petition before him and even the CIT(A) has directed the AO to allow claim of TDS after verifying the same. We direct the AO to allow the claim of TDS amounting to ₹ 11,95,766/- which were filed before him during the course of assessment proceedings and also the TDS certificate received late but filed before him along with the rectification letter dated 24.12.2009 amounting to ₹ 26,10,633/-. We direct the AO to give credit of this TDS amount and decide the claim immediately.- Decided in favour of assessee Charging interest under section 234C - Held that - We have considered the plea of the assessee and directed the AO while dealing with above grounds to give credit for TDS for ₹ 5,44,05,867/- and also credit for advance ax for an amount of ₹ 1.70 crores. Consequently, interest u/s 234C will be charged after giving credit to these amounts
Issues Involved:
1. Disallowance of expenditure relating to exempt income under Section 14A of the Income Tax Act. 2. Non-granting of TDS credit. 3. Charging of interest under Section 234C of the Income Tax Act. Issue-wise Detailed Analysis: 1. Disallowance of Expenditure Relating to Exempt Income: The first issue pertains to the disallowance of expenditure relating to exempt income by invoking the provisions of Section 14A of the Income Tax Act read with Rule 8D of the Income Tax Rules. The assessee had exempt income in the form of dividends amounting to ?68.46 crores and had computed a disallowance of ?28,28,638/- for direct and indirect expenditures. The Assessing Officer (AO) disallowed the claim by applying Rule 8D, resulting in a disallowance of ?6,82,00,000/-. The CIT(A) upheld this disallowance, stating that the AO applied the most reasonable method in computing the disallowance under Section 14A. However, the tribunal noted that in the assessee's case for the preceding year, the disallowance was deleted due to the AO's failure to record satisfaction regarding the correctness of the assessee's claim. The tribunal held that Rule 8D would not apply for the assessment year 2007-08 and that the AO did not record any satisfaction for rejecting the disallowance claimed by the assessee. Consequently, the tribunal reversed the orders of the lower authorities and allowed the assessee’s appeal on this issue. 2. Non-granting of TDS Credit: The second issue involves the AO's failure to grant TDS credit amounting to ?38,06,399/-. The AO did not allow credit for TDS of ?11,95,766/- and ?26,10,633/- because the TDS certificates were received after filing the return of income. The tribunal noted that the assessee had filed a rectification letter and the relevant TDS certificates during the assessment proceedings. The tribunal directed the AO to allow the TDS credit as claimed by the assessee, amounting to ?11,95,766/- and ?26,10,633/-, and to decide the claim immediately. 3. Charging of Interest under Section 234C: The third issue concerns the charging of interest under Section 234C of the Income Tax Act. The assessee argued that the interest was charged due to the non-granting of TDS credit and advance tax credit. The tribunal directed the AO to grant credit for the TDS and advance tax amounts and to recompute the interest under Section 234C accordingly. The tribunal noted that the assessee should not be charged excess interest due to the pending rectification of TDS and advance tax credits. Other Related Issues: - For the assessment years 2008-09 and 2009-10, the tribunal found that the facts were identical to the earlier years, and the AO had not recorded any satisfaction for disallowing expenses under Section 14A. Therefore, the tribunal allowed the assessee’s appeals on this issue for these years as well. - The tribunal directed the AO to verify and allow the TDS credit and advance tax credit claims for the assessment years 2008-09 and 2009-10. - The tribunal allowed the assessee's appeal regarding the verification of an amount reflected in ITS-TDS information. - The tribunal directed the AO to recompute the interest under Section 234C after granting the TDS and advance tax credits. Conclusion: In conclusion, the tribunal partly allowed the assessee's appeals for statistical purposes, directing the AO to grant the TDS and advance tax credits and to recompute the interest under Section 234C accordingly. The tribunal reversed the disallowance of expenditure relating to exempt income for the relevant assessment years due to the AO's failure to record satisfaction regarding the correctness of the assessee's claim.
|
