Expenses on exempted income

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCH ‘J’ MUMBAI

BEFORE SHRI D.K. AGRAWAL, JUDICIAL MEMBER AND

SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

ITA No.5811/Mum/2011

Assessment Year-2007-08

The ITO 8(2)(1),

Aayakar Bhavan,

Mumbai-400 020

(Appellant)

Vs.

M/s. Jagruti Resigns Pvt. Ltd.,

Room No. 14, Dhawal Bldcg,

2 Pathan Street,

5, Khumharwada,

Mumbai-400 004

PAN-AAACJ 1726D

 (Respondent)

Appellant by: Shri Mohit Jain

Respondent by: None

Date of Hearing: 30.08.2012

Date of pronouncement: 05.09.2011

O R D E R

PER N.K. BILLAIYA, AM:

With this appeal, the Revenue has challenged the correctness of the order of the Ld. CIT(A)-17 dt. 8.6.2011 pertaining to assessment year 1007- 08.

2. None appeared on behalf of the assessee therefore we heard the Ld. Departmental Representative and dispose of this matter ex-parte on merit.

3. The sole grievance of the Revenue is that the Ld. CIT(A) erred in directing the AO to make a reasonable estimate of expenses attributable to earning of exempt income in respect of disallowance of Rs. 10,06,974/- u/s. 14A of the I.T. Act.

4. We have heard the rival submissions and perused the orders of lower authorities. We find that during the year under consideration, the assessee has received dividend income amounting to Rs. 6,59,174/-. We find that the AO has applied provisions of Sec. 14A r.w. Rule 8D and has made a

disallowance of Rs. 10,06,974/-. While deciding the appeal, the Ld. CIT(A) has relied upon the judgement of the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs DCIT 328 ITR 81. The Ld. CIT(A) has directed the AO to recompute the disallowance u/s. 14A of the Act in accordance with the ratio of the judgement of the Hon’ble Jurisdictional High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs DCIT (supra). In our humble opinion, the findings of the Ld. CIT(A) are in accordance with the ratio laid down by the Hon’ble Jurisdictional High Court (supra). We, therefore do not find any reason to tinker to the findings of the Ld. CIT(A), accordingly the order of the Ld. CIT(A) is confirmed.

5. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on this 5th day of September, 2012

                                                     Sd/-                        Sd/-

                                       (D.K. AGRAWAL  ) (N.K. BILLAIYA)

                                          Judicial Member    Accountant Member

Mumbai, Dated 5th September, 2012

Rj

Copy to:

1. The Appellant

2. The Respondent

3. The CIT-concerned

4. The CIT(A)-concerned

5. The DR ‘J’ Bench

True Copy

By Order

Asstt. Registrar, I.T.A.T, Mumbai