9911796707
TMI Blog2014 (4) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. - Decided in favor of assessee. - I.T.A. No. 5146/M/2012, I.T.A. No. 5147/M/2012 - - - Dated:- 30-4-2014 - Vivek Varma ( Judicial Member ) And D. Karunakara Rao ( Accountant Member) For the Appellant : Yogesh A Thar For the Respondent : Sanjeev Jain, DR ORDER D. Karunakara Rao ( Accountant Member) There are two appeals under consideration. Both the appeals are filed by the assessee against the separate orders of the CIT (A)-9, Mumbai dated 14.5.2012 for the assessment years 2008-2009 and 2009-2010. Since, the issues issues raised in both the appeals are identical, therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, Ld Counsel mentioned that an identical issue came up for adjudication before the Tribunal vide ITA 7292/M/2011 (AY 2008-2009), dated 29th November, 2013 in the case of ACIT vs. M/s. Jayshree Petrochemicals Pvt. Ltd and read out the relevant portions from the said order of the Tribunal (supra), wherein the Tribunal has discussed and adjudicated the issue at length vide paragraphs no.4 to 7. Further, before us Ld Counsel filed a working showing the maximum possible disallowance should not exceed the sum of ₹ 66,404/- (for the AY 2008-09) and ₹ 71,773/- (for the AY 2009-2010). 4. On the other hand, Ld DR relied on the orders of the Revenue Authorities. 5. We have heard both the parties and perused the orders of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. At the outset we note that the CIT(A) has completely ignored the fact that Rule 8D is applicable for the year under consideration and therefore, the finding of the CIT(A) is not sustainable even in the light of the decision of Hon ble Jurisdiction High Court in case of Godrej Boyce Mfg. Co. Ltd. Vs DCIT 328 ITR 81. However, the underlined principle of Section 14A is to ensure that the tax incentive given by way of exemption of certain categories of incomes shall not reduce the tax payable on non-exempt income by debiting the expenses incurred to earn the exempt income against the taxable income. Thus, the expenses incurred to earn exempt income cannot be allowed and only the expenses relatable to the earning of taxable income shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees 1500 900 Legal Professional Charges 28000 100000 Loading Unloading Expenses 23522 55115 Packing Charges 84530 101326 Postage, Telegramme Telephone Charges 50331 49988 Printing Stationery 25214 81011 Profession Tax 2500 2500 Repairs Maintenance Expenses 21512 80256 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orming part of the total income. Therefore, the disallowance of expenditure is always in relation to the claim of expenditure and it cannot be more than the claim itself. An identical issue has been considered by the Delhi Benches of the Tribunal in case of Gillette Group India Pvt. Ltd. Vs ACIT and concluded in para 6 as under: 6. From the above, it is evident that as per sub-section (1) of Section 14A, no deduction is to be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of total income. Sub-section (2) of Section 14A provides the procedure for determination of such expenditure by the Assessing Officer. The Board has also prescribed Rule 8D for determining the expenditure inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are prima facie unconnected to the exempt income. Such expenses should also need to be exempted. Considering the above order of the Tribunal, we are of the opinion that the matter should be remanded to the files of the AO to examine the expenses debited to the P L Account and exclude the unconnected expenses for the purpose of quantifying the disallowance u/s 14A of the Act. Accordingly, we remit the matter to the file of the AO. He shall examine if the Ld AR s claim of disallowance of ₹ 66,404/- (for the AY 2008-09) and ₹ 71,773/- (for the AY 2009-2010). AO shall adjudicate the issue afresh in accordance with the set principle of the law after affording a reasonable opportunity of being heard to the assessee. Accordingly, g ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
