Amin Equipments Pvt.Ltd., Ahmedabad v. The Dy. CIT.,Circle-1,, Ahmedabad

ITA 620/AHD/2014 | 2009-2010
Pronouncement Date: 29-09-2016 | Result: Partly Allowed

Appeal Details

RSA Number 62020514 RSA 2014
Assessee PAN AABCA5995J
Bench Ahmedabad
Appeal Number ITA 620/AHD/2014
Duration Of Justice 2 year(s) 6 month(s) 27 day(s)
Appellant Amin Equipments Pvt.Ltd., Ahmedabad
Respondent The Dy. CIT.,Circle-1,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 29-09-2016
Date Of Final Hearing 27-09-2016
Next Hearing Date 27-09-2016
Assessment Year 2009-2010
Appeal Filed On 03-03-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD JUDICIAL MEMBER) ITA. NO: 620/AHD/2014 (ASSESSMENT YEAR: 2009-10) AMIN EQUIPMENTS PVT. LTD. PLOT NO. 222 MAKARBA NR. SARKHEJ SANAND CROSS ROAD AHMEDABAD-382210 V/S THE DCIT CIRCLE-1 AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCA5995J APPELLANT BY : SHRI S.N. DIVETIA AR RESPONDENT BY : SHRI PRASOON KABRA SR. D.R. ( )/ ORDER DATE OF HEARING : 27 -09-201 6 DATE OF PRONOUNCEMENT : 29 -09-2016 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-6 AHMEDABAD DATED 13.12.2013 PERTAINING TO A.Y. 2009-10. ITA NO. 620/ AHD/2014 . A.Y. 2009-1 0 2 2. THE ASSESSEE IS AGGRIEVED BY THE DISALLOWANCE MADE U/S. 14A OF THE ACT AT RS. 1 43 724/- CONFIRMED BY THE LD. CIT(A). 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS THE A.O. NOTICED THAT THE ASSESSEE HAS EARNED DIVIDEND INCOM E OF RS. 13 09 529/- WHICH IT CLAIMED TO BE EXEMPT FROM TAX. THE A.O. WAS OF THE FIRM BELIEF THAT PROVISIONS OF SECTION 14A READ WITH RULE 8D ARE ATTRACTED ON THE FACTS OF THE CASE AND ACCORDINGLY PROPOSED TO MAKE DISALLOWANCE U/S. 14A READ WITH RULE 8D OF THE ACT. 4. THE ASSESSEE STRONGLY OBJECTED TO THIS PROPOSITION OF THE A.O. STATING THAT IT HAS NOT MADE ANY INVESTMENT FROM BORROWED F UNDS. IT WAS FURTHER EXPLAINED THAT THE INTEREST FREE FUNDS WITH THE ASSESSEE ARE FAR MORE IN EXCESS OF THE INVESTMENT; THEREFORE NO DIS ALLOWANCE SHOULD BE MADE. THE CLAIM OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE A.O. WHO PROCEEDED BY COMPUTING THE DISALLOWANCE AS PER THE FORMULA GIVEN IN RULE 8D AND COMPUTED THE DISALLOWANCE AT R S. 1 43 724/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 6. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE REITERA TED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. PER CONTRA TH E LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS AND RIVAL C ONTENTIONS. WE FIND THAT THE SHARE CAPITAL AND FREE RESERVES OF THE ASS ESSEE IS AT RS. 8.99 CRORES WHEREAS THE INVESTMENT MADE IN MUTUAL FUND I S 59.03 LACS. THIS CLEARLY SHOWS THAT THE ASSESSEE WAS HAVING SUFFICIE NT OWN FUNDS FOR ITA NO. 620/ AHD/2014 . A.Y. 2009-1 0 3 MAKING THE INVESTMENT. SINCE THE INTEREST FREE FUN DS ARE IN EXCESS OF THE INVESTMENT; THE PRESUMPTION IS THAT THE INVESTM ENT IS MADE OUT OF INTEREST FREE FUNDS. FOR THIS PROPOSITION WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF RELIANCE UTILITIES AND POWER 313 ITR 340 FOLLOWED IN THE CAS E OF HDFC LTD. 366 ITR 505. 8. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE H ONBLE HIGH COURT WE DO NOT FIND ANY REASON FOR MAKING THE DISALLOWAN CE OF RS. 95 480/- ON ACCOUNT OF INTEREST UNDER RULE 8D(2)(II). INSOFA R AS THE DISALLOWANCE OF ADMINISTRATIVE EXPENSE OF RS. 48 244/- UNDER RUL E 8D(2)(III) IS CONCERNED WE DECLINE TO INTERFERE. THE A.O. IS DIR ECTED TO DELETE THE ADDITION OF RS. 95 480/-. ADDITION OF RS. 48 244/- IS SUSTAINED. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 29 - 09- 2016 . SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHME DABAD