9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 1291 - AT - Income TaxEligibility for deduction u/s 80P(2)(e) - CIT-A allowed claim - HELD THAT - CIT(A) allowed the assessee s claim u/s 80P(2)(e) noting that the Hon'ble Jurisdictional High Court in the case of assessee itself 2011 (3) TMI 615 - PUNJAB AND HARYANA HIGH COURT had held that the deduction u/s 80P(2)(d) of the Act was allowable on rental income earned from outsiders. It was on appreciating this legal proposition that the I.T.A.T. in the first round has restored the matter back to the CIT(A) to adjudicate the issue of allowance of claim u/s 80P(2)(e) after verifying the evidences filed by the assessee. CIT(A) has gone through all the evidences filed by the assessee and found the claim of the assessee to be in accordance with law. DR has been unable to controvert this factual finding of the CIT(A). In view of the same, we find no reason to interfere in the order of the CIT(A). Disallowance of interest expenditure u/s 14A calculated as per Rule 8D(2)(ii) - HELD THAT - where sufficient own interest free funds are available, no disallowance of interest is warranted. The CIT(A) has given a factual finding that sufficient interest free funds were available with the assessee. DR was unable to distinguish the decision of the I.T.A.T. relied upon by the Ld.CIT(A) and was also unable to controvert the factual finding of the CIT(A) vis- -vis the deletion of interest expenses as per Rule 8D(2)(ii) of the Rules. As far the directions of the CIT(A) to calculate the disallowance of administrative expenses as per Rule 8D(2)(iii) of the Rules by taking into consideration only those investments which had earned interest and dividend income, we find that the CIT(A) had relied upon the decision of the I.T.A.T. in the case of the assessee itself for assessment year 2013-14 on identical issue. DR was unable to distinguish the same. In view of the same, we do not find any reason to interfere in the order of the CIT(A) in this regard also.
Issues Involved:
1. Deduction under Section 80P(2)(e) of the Income Tax Act for rental income from letting out warehouses. 2. Disallowance of interest and administrative expenses under Section 14A read with Rule 8D of the Income Tax Rules. Issue-wise Detailed Analysis: 1. Deduction under Section 80P(2)(e) for Rental Income: ITA No.1611/Chd/2018: - The Revenue challenged the CIT(A)'s decision allowing the assessee’s claim of deduction under Section 80P(2)(e) for rental income from letting out warehouses. - The ITAT had previously remanded the issue to the CIT(A) to decide it in accordance with law after considering the evidences. - The CIT(A) found that the assessee had provided sufficient evidence to substantiate its claim, including lease deeds and Form 26AS reflecting rental income from entities like FCI, IFFCO, and NAFED. - The CIT(A) noted that the Hon'ble Jurisdictional High Court had previously held that rental income from letting out warehouses was eligible for deduction under Section 80P(2)(e), while income from storage of foodgrains owned by the assessee was not. - The CIT(A) concluded that the assessee had correctly claimed the deduction amounting to ?8,69,01,552. - The ITAT upheld the CIT(A)'s decision, finding no reason to interfere, as the Revenue could not controvert the factual findings. ITA No.1612/Chd/2018 & ITA No.1613/Chd/2018: - The Revenue raised similar grounds for assessment years 2014-15 and 2015-16. - The ITAT applied its decision from ITA No.1611/Chd/2018, dismissing the Revenue's appeals for these years as well. 2. Disallowance of Interest and Administrative Expenses under Section 14A read with Rule 8D: ITA No.1612/Chd/2018: - The Revenue challenged the CIT(A)'s decision to delete the disallowance of interest expenses and administrative expenses related to dividend and interest income eligible for deduction under Section 80P(2)(d). - The CIT(A) held that the AO was correct in applying Section 14A but found that no disallowance of interest was warranted as the assessee had sufficient interest-free funds. - For administrative expenses, the CIT(A) directed that the disallowance should be calculated only on investments that earned income during the year, following precedents set by the ITAT in the assessee's own cases for earlier years. - The ITAT upheld the CIT(A)'s decision, noting that the Revenue could not distinguish the precedents or controvert the factual findings. ITA No.1613/Chd/2018: - The Revenue raised similar grounds for assessment year 2015-16. - The ITAT applied its decision from ITA No.1612/Chd/2018, dismissing the Revenue's appeal for this year as well. Conclusion: - The ITAT dismissed all the appeals filed by the Revenue, upholding the CIT(A)'s decisions on both issues: the allowance of deduction under Section 80P(2)(e) for rental income and the deletion of disallowance of interest and administrative expenses under Section 14A read with Rule 8D.
|
