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ITAT upheld modification of impugned disallowance
ITAT upheld modification of impugned disallowance
Sh Ashokbhai Haribhai Gajera had exempt income of Rs 23 lakhs. He had debited interest sum of Rs 29 lakhs in P&L account. AO computed disallowances of Rs 33 lakhs under Rule 8D(2)(ii) (of Income Tax Rules, 1962) and (iii). CIT(A) partly modified impugned disallowance, taking into account assessee's investments in shares giving rise to exempt income only. ITAT upheld CIT(A)’s order. - 500449
1. Sh Ashokbhai Haribhai Gajera traded in shares and securities.
2. His exempt income pertaining to relevant previous year was Rs 23 lakhs.
3. He had debited interest sum of Rs 29 lakhs in profit and loss account.
4. AO computed disallowances of Rs 33 lakhs under Rule 8D(2)(ii) (of Income Tax Rules, 1962) and (iii).
5. CIT(A) partly modified the impugned disallowance.
On appeal, the ITAT held as under:
6. The Assessing Officer appears to have taken all investments made in shares and securities against the assessee's case that on pertaining to impugned exempt income only have to be adopted for the purposes of computing the disallowance in question.
7. There can hardly be any quarrel that section 14A (of Income Tax Act, 1961) applies only in case of exempt income and not qua any other income.
8. So is the case with Rule 8D (of Income Tax Rules, 1962) applicable w.e.f. the impugned assessment year 2008-09.
9. We accordingly hold in these facts and circumstances that the CIT(A) has righty taken into account assessee's investments in shares giving rise to above stated exempt income only.
10. We find no reason to in interfere with the same.
Case Reference - The Asstt. Commissioner of Income-tax Vs Shri Ashokbhai Haribhai Gajera.
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD "D" BENCH
Before: Shri Pramod Kumar, Accountant Member
and Shri S. S. Godara, Judicial Member
ITA No. 675/Ahd/2012
(Assessment Year 2008-09)
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