Deepen A Parekh, Mumbai vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER

आयकर अपील सं./I.T.A. No. 3308 /Mum/2013 ( नधा रण वष / Assessment Year : 2009-10

Shri Deepen A. Parekh, बनाम/ D.C.I.T. Central Cir. 20, 601 Auto Commerce Mumbai. Vs. House, Nana Chowk, Kennedy Bridge, Mumbai - 400 007. थायी ले खा सं . /PAN : AAIPP6817G (अपीलाथ /Appellant) .. ( यथ / Respondent)

Appellant by None Respondent by : Shri Love Kumar (D.R.)

ु वाई क तार ख / Date of Hearing सन : 25-05-2015 घोषणा क तार ख /Date of Pronouncement : 27-05-2015 [

आदे श / O R D E R PER R.C. SHARMA, A.M. :

This is an appeal filed by the assessee is directed against the order passed by the ld. CIT(A) -39,, Mumbai dated 14-01-2013 for the A.Y. 2009-10 in the matter of order passed u/s 143(3) of the Income Tax Act, 1961. !

2. At the time of hearing, nobody from assessee's side has appeared instead of giving notices to the assessee. The Bench, therefore decided to dispose of the appeal after hearing the ld. D.R. and considering the material placed on record.

2 ITA 3308/M/13

3. The only grievance of the assessee relates to the addition made u/s 14A read with Rule 8-D of the Income Tax Rules, 1962.

4. We have heard ld. D.R. and found that the disallowance has been made by the A.O. in respect of interest and administrative expenses on the plea that the assessee has earned exempt income of Rs. 6,11,945/-. The contention of the assessee before the A.O. was that he has incurred interest expenditure of Rs. 4,519/- only which was paid to the bank for overdraft facility. It was also the contention of the assessee that total expenses claimed in the P&L account was Rs. 1,94,511/-, therefore, the total disallowance could not exceed the expenses debited to the P&L account. However, the A.O. did not consider the assessee's contention and arbitrarily computed the disallowance at Rs. 6,19,220/-. By the impugned order, the ld. CIT(A) confirmed the disallowance, against which the assessee is in appeal before us.

5. We have considered the contentions of the ld. D.R. and gone through the orders of the authorities below and found that the assessee has debited total expenditure of Rs. 1,94,511/-. The disallowance u/s 14A read with Rule 8-D is being made in respect of expenditure attributable to earning of exempt income. However, in no case the disallowance can be more than the expenditure debited and claimed by the assessee. In this case, the A.O. has disregarded the total expenditure debited to the P&L account and worked out the disallowance at 25% of the dividend income as well as disallowance under Rule 8D(2)(iii). We do not find any merit in the order of the A.O. and accordingly the same is set aside and remit the matter back to the file of the A.O. to decide the same afresh after giving due opportunity of being heard to the assessee.

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6. In the result, appeal of the assessee is allowed in part for statistical purpose.

Order pronounced in the open court on 27th May, 2015.

आदे श क घोषणा खल ु े #यायालय म% &दनांकः 27-05-2015. को क गई ।

Sd/- sd/- (D. MANMOHAN) (R.C. SHARMA) VICE PRESIDENT ACCOUNTANT MEMBER मुंबई Mumbai; &दनांक Dated 17-05-2015

व.5न.स./ RK , Sr. PS

आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु6त(अपील) / The CIT(A) -39, Mumbai

4. आयकर आयु6त / CIT --Cent, 11, Mumbai

5. 9वभागीय 5त5न;ध, आयकर अपील य अ;धकरण, मुंबई / DR, ITAT, Mumbai D Bench

6. गाड? फाईल / Guard file.

ु ार/ BY ORDER, आदे शानस

स या9पत 5त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai