ITAT has directed A.O to examine the interest free funds available and grant relief under rule 8D(iii) in case of Mehta Financial Services Ltd.

Last updated: 22 January 2021

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The Income Tax Appellate Tribunal (ITAT) Mumbai has instructed the Assessing Officer (AO) to re-examine the availability of interest-free funds. This is in relation to a disallowance of Rs 8,55,173 made under Section 14A read with Rule 8D. The tribunal suggests that relief should be granted under Rule 8D(iii) after this examination.

Court :
ITAT Mumbai

Brief :
This appeal by the assessee is directed against order of learnedCommissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 8.11.2019 and pertains to assessment year 2013-14.

Citation :
I.T.A. No. 515/Mum/2020

THE INCOME TAX APPELLATE TRIBUNAL
“SMC” Bench, Mumbai

Shri Shamim Yahya (AM) & Shri Ramlal Negi (JM)

I.T.A. No. 515/Mum/2020 (Assessment Year 2013-14)

Mehta Financial Services
Limited
903, Lodha Supremus
Dr. E. Moses Road
Worl i Naka
Mumbai-400 018.
PAN : AAACR4142D
(Appellant)

Vs.

DCIT-4(2) (2)
Aayakar Bhavan
M.K. Road
Churchgate
Mumbai-400 020.
(Respondent)

Assessee by Shri Rajiv Khandelwal
Department by Shri Jeetendra Kumar

Date of Hearing 20.10.2020
Date of Pronouncement 01.01.2021

O R D E R

Per Shamim Yahya (AM) :-

This appeal by the assessee is directed against order of learnedCommissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 8.11.2019 and pertains to assessment year 2013-14.

2. The grounds of appeal read as under :-

1. The Commissioner of Income-tax (Appeals)-9, Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the action of the Deputy Commissioner of Income-tax-4(2)(2), Mumbai (hereinafter referred to as the Assessing Officer) in making a disallowance of a sum of Rs 8,55,173 by invoking the provisions of section 14A read with Rule 8D.

2. The appellants contend that on the facts and in the circumstances of thecase and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as he has not correctly appreciated the factsin its entirety and the disallowance is not in accordance with the prescription of section 14A read with Rule 8D(2)(ii); hence, the impugned disallowance needs to be deleted.

3. Brief facts on the issue are as under :-

To know more in details find the attachmen file

FAQ :

The appeal concerned a disallowance of Rs 8,55,173 made by the Assessing Officer under Section 14A of the Income Tax Act, read with Rule 8D, which the assessee argued was incorrect.

The ITAT directed the Assessing Officer to examine the interest-free funds available to the assessee.

The ITAT directed that relief should be granted under Rule 8D(iii) of the Income Tax Act.

The assessment year for this judgement is 2013-14.

The appellant was Mehta Financial Services Limited, and the respondent was the DCIT-4(2), Mumbai.