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TMI Blog2021 (10) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... eeded with the formula of Rule 8D i.e. 0.5% of the total investment. He disallowed taking a lead from there. We, therefore, find force in the ground of appeal raised by the assessee and the statement of facts made therein. Therefore, the Ground No.2 3 of the appeal are allowed. Disallowance of travelling expenses - Expenditures were incurred in Assessment year 2012-13 - as crystallized in that year. Therefore, according to the Revenue Authorities, it should have been claimed in the earlier year - assessee has pleaded that since there is a same rate of taxes; therefore, this expenditure should be allowed in this year also - HELD THAT:- No force in this contention of the assessee; because if that be so, then it will be at the sweet wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 169 & 170/Ahd/2019 - - - Dated:- 5-10-2021 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Assessee by : None Revenue by : Shri R.R. Makwana, Sr DR ORDER PER RAJPAL YADAV, VICE PRESIDENT : The present two appeals are directed at the instance of the assessee against separate orders of learned Commissioner of Income-Tax (Appeals)- 8, Ahmedabad ( CIT(A) in short) dated 03.12.2018 and 19.12.2018 passed for Assessment Years 2013-14 and 2014-15 respectively. 2. First we take up the appeal for Assessment Year 2013-14, i.e. ITA No.169/Ahd/2019. 3. It is pertinent to observe that these appeals were listed on earlier occasion, i.e. on 20th April 2021. The assessee filed a letter requesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, learned First Appellate Authority has to decide the appeal ex-parte. We do not find any error in the order of the learned CIT(A) on this point; hence, this ground of appeal is rejected. 6. In Ground Nos. 2 3, the assessee has pleaded as under:- 2. The Ld. CIT(A) has erred in upholding the disallowance of administrative expenses pertaining to investment made in partnership firm as the assessee having been taxed on interest received from such partnership firm, the provision of Section 14A is not application. 3. That the Ld. CIT(A) has erred in upholding the disallowance of administrative expenses on investment in shares totaling to ₹ 32,000/-, as the assessee having not received any dividend, in view of decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect expenses - Rs. NIL/- (B) Disallowances out of interest - Rs. NIL/- (C) Half percent of average investment - 0.5% of 4,71,38,527/-. = ₹ 2,35,692/- Disallowance u/s. 14A = A+B+C = ₹ 2,35,692/- In view of the above an amount of ₹ 2,35,692/- is added to the income of the assessee. [Addition of ₹ 2,35,692] 8. Though this aspect does not throw much light on the reasoning what weighed with the Assessing Officer while calculating the disallowance for the purpose of Section 14A; however, a perusal of his reliance upon the decision of Special Bench of the Tribunal in the case of Cheminvest Ltd vs. ITO, reported in 124 TTJ 577 (Del) (SB) as well as his findings in AY 2014-15, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Assessing Officer has worked out the disallowance at ₹ 2,21,640/-, i.e. more than the exempt income. This aspect gives us guidance that the Assessing Officer has not considered the figure; he simply proceeded with the formula of Rule 8D i.e. 0.5% of the total investment. He disallowed taking a lead from there. We, therefore, find force in the ground of appeal raised by the assessee and the statement of facts made therein. Therefore, the Ground No.2 3 of the appeal are allowed. The disallowance made under Section 14A of the Act and confirmed by the learned CIT(A) in Assessment Year 2013-14 is thus deleted. 9. In Ground No.4, the assessee has pleaded that the learned CIT(A) has erred in confirming the disallowance of travelli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e qua the assessee. 13. As far as Ground No.1 is concerned, the assessee has challenged the ex-parte proceedings taken by the learned First Appellate Authority. After going through the records, we do not find any error in the findings of the learned First Appellate Authority. Ground No.1 is, therefore, rejected. 14. In Ground Nos. 2 3, the assessee has challenged the disallowance made under Section 14A of the Income-tax Act. In this year, we find that the assessee has claimed tax-free income of ₹ 1,81,315/-. The Assessing Officer has worked out the disallowance at ₹ 2,21,640/- with the help of formula provided in Rule 8D. The Assessing Officer has worked out only administrative expenses @ half percentage of average inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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