DCIT-10(2)(2), Mumbai v. M. Suresh Exports P. Ltd
[Citation -2019-LL-0917-57]

Citation 2019-LL-0917-57
Appellant Name DCIT-10(2)(2), Mumbai
Respondent Name M. Suresh Exports P. Ltd.
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 17/09/2019
Assessment Year 2012-13
Judgment View Judgment
Keyword Tags interest free fund • own fund • disallowance of expenses • excess amount • investment of surplus fund • low tax effect
Bot Summary: The only issue raised in this appeal is that learned CIT(A) erred in deleting the addition of Rs. 70,25,654/- made under Rule 8D(ii) under section 14A of the I.T. Act. Brief facts of the case are that the Assessing Officer in this case made the disallowance invoking the provisions of Rule 8D(ii) under section 14A of the I.T. Act. Against the above disallowance learned CIT(A) inter alia noted the reliance by the assessee on the decision of Hon'ble Jurisdictional High Court and deleted the addition by holding as under :- As per disallowance under Rule 8D is concern, I have gone through fie working of availability of interest free own fund available with the Appellant company when these investments have been made. Company is a squarely covered by the ratio of jurisdictional high course i e. Bombay High Court In case of HDFC Bank Limited- 366 ITR 555, HDFC Bank 383 ITR 529 and Reliance Utility Power Ltd 313 ITR 340. The hon ble Bombay High Court has laid down the proposition that when own Interest free fund is excess than the investment made by the appellant company then no disallowance u/s. In view of submission of the appellant company and ratio laid down by Hon'ble Bombay High Court in aforesaid cases, the disallowance of Rs. 70,25,654/- made under Rule 8D(2)(ii) is deleted. If the interest free funds available are more than the investment no disallowance under rule 8D(ii) is required.


THE INCOME TAX APPELLATE TRIBUNAL D Bench, Mumbai Before Shri Shamim Yahya (AM) & Shri Ravish Sood (JM) I.T.A. No. 5266/Mum/2017 (Assessment Year 2012-13) DCIT-10(2)(2) M/s. M. Suresh Room No. 216-A Vs. Exports P. Ltd. 2 n d Floor 419, Parekh Market Aayakar Bhavan Opera House M.K. Road Mumbai-400 004. Mumbai-400 020. PAN AAACD5693D (Appellant) (Respondent) Assessee by Shri B.V. Jhaveri Department by Shri D.G. Pansari Date of Hearing 27.6.2019 Date of Pronouncement 17.9.2019 ORDER Per Shamim Yahya (AM):- This appeal by Revenue is directed against order of learned CIT(A) dated 10.5.2017 and pertains to A.Y. 2012-13. 2. only issue raised in this appeal is that learned CIT(A) erred in deleting addition of Rs. 70,25,654/- made under Rule 8D(ii) under section 14A of I.T. Act. 3. Brief facts of case are that Assessing Officer in this case made disallowance invoking provisions of Rule 8D(ii) under section 14A of I.T. Act. Against above disallowance learned CIT(A) inter alia noted reliance by assessee on decision of Hon'ble Jurisdictional High Court and deleted addition by holding as under :- As per disallowance under Rule 8D (2) (ii) is concern, I have gone through fie working of availability of interest free own fund available with Appellant company when these investments have been made. Form this working it is clear that interest free own fund was in excess of investments made during particular year. If that is so then case of Appellant 2 M / s . M . S ur e s h E x p o r t s P. L td . company is squarely covered by ratio of jurisdictional high course i e. Bombay High Court In case of HDFC Bank Limited- (2014) 366 ITR 555 (Bom), HDFC Bank (2016) 383 ITR 529 (Bom) and Reliance Utility Power Ltd (2009) 313 ITR 340. hon ble Bombay High Court has laid down proposition that when own Interest free fund is excess than investment made by appellant company then no disallowance u/s. 14A of Act can be restored. In view of submission of appellant company and ratio laid down by Hon'ble Bombay High Court in aforesaid cases, disallowance of Rs. 70,25,654/- made under Rule 8D(2)(ii) is deleted . 4. Against above order Revenue is in appeal before us. 5. We have heard both counsel and perused records. We find that issue is squarely covered in favour of assessee by decision of Hon'ble Jurisdictional High Court in case referred above. We note that since assessee has sufficient interest free funds to make investment Hon'ble High Court decision as referred above duly supported view taken by learned CIT(A). We find that on touchstone of above said case laws assessee is not required to make any reconciliation of investment with interest free funds available. If interest free funds available are more than investment no disallowance under rule 8D(ii) is required. Accordingly, in background of aforesaid discussion and precedent we do not find any infirmity in order of learned CIT(A). Hence, we uphold same. 6. Before partying we also note that tax effect in this case is below limit fixed by CBDT for filing appeals before ITAT as per its latest order. 7. In result, appeal filed by Revenue stands dismissed. Order has been pronounced in Court on 17.9.2019. SD/- SD/- (RAVISH SOOD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai Dated 17/9/2019 Copy of Order forwarded to 1. Appellant 2. Respondent 3 M / s . M . S ur e s h E x p o r t s P. L td . 3. CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, (Assistant Registrar) PS ITAT, Mumbai DCIT-10(2)(2), Mumbai v. M. Suresh Exports P. Ltd
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