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12.
THEPR.COMMISSIONER OFINCOME TAX CENTRAL-3 Appellant
Through: Mr. Rahul Chaudhary and Mr. Ruchir Bhatia,Advocates.
Through: Ms. Kavita Jha and Ms.Roopali Gupta, Advocates.
16.
THEPR.COMMISSIONER OFINCOME TAX CENTRAL-3 Appellant
Through: Mr. Rahul Chaudhary and Mr. Ruchir Bhatia,Advocates.
Through: Ms. Kavita Jha and Ms. Roopali Gupta, Advocates.
30.10.2015 CM No.24906 of2015texemptionl in ITA No.823 of2015
ITA Nos.819&823of2015 Page1of3 2015:DHC:11745-DB
1.Exemptions allowed subjectto alljustexceptions.
2.The application is disposed of.
ITA Nos.819 of2015&823 of2015 3.These two appeals by the Revenue under Section 260A ofthe Income Tax
Act,1961('Act')are directed againsta common order dated 17* April 2015 passed by the Income Tax Appellate Tribunal('ITAT')in ITA Nos. 4364 and 4365/Del/2013 for AssessmentYear('AY')2009-10.
ORDER
4. Both the Assessees are non-banking finance companies. In the return of income both Assessees had shown dividend income and claimed that 1% of the expenses had been incurred as administrative and statutory expenses and, therefore, should not be disallowed for the purposes ofSection 14A ofthe Income Tax Act, 1961('Act')read with Rule 8-D ofthe Income Tax Rules, 1962('Rules').
5. The Assessing Officer('AO')formed an opinion that the Assessees had not furnished the correct particulars of income and proceeded to levy a penalty under Section 271 (1)(c)ofthe Act. The Commissioner ofIncome Tax (Appeals)['CIT (A)'] deleted the penalty levied by the AO and the Revenue went in appeal before the ITAT. The ground on which the ITAT ITA Nos.819&823of2015 Page2of[3] dismissed the Revenue s appeal wasthatnowhere in the assessmentorder or in the penalty order did the AO record thatthe Assessees'claims were false. It was noted thatthe Rule 8D ofthe Rules would come into play only when the AOrecords afinding that,having regard to the accounts ofthe Assessee, he was not satisfied with the correctness ofthe claims of the Assessee in respect ofthe expenditure in relation to income which does notform part of the total income. Reliance was placed by the ITAT on the decision ofthe Supreme Court in CIT v. Reliance Petro Products Pvt. Ltd.[2010]189 Taxman 322.
6. Having heard learned counsel for the Revenue and having considered the orders of the CIT (A) as well as the ITAT, the Court finds that both decisions are based on the correct understanding ofthe legal position and thatin the facts ofthe present case,no substantial question oflaw arises for determination.The appeals are dismissed.
S.MURALIDHAR,J VIBHU BAKHRU,J OCTOBER 30,2015/dn ITANos.8I9&823of201S Page3of[3]