IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.6370/Mum/2024 JaikishanBhagchandka, Vs. ^{ACIT, 24(2),} 503, Highland Park, Mumbai –400012 New Link Road, Lokhandwala Complex Andheri (W), Mumbai –

400053.

PAN/GIR No. ADJPB1765F (Applicant) (Respondent)

Assessee by Sh. Ashok Bansal, Revenue by Sh. Sunil Mathews, Sr. DR क(cid:2) /Date of Hearing 15.01.2025 सुनवाई तारीख क(cid:2) /Date of Pronouncement 25.02.2025 घोषणा तारीख आदेश / ORDER PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the assessee challenging the impugned order u/s 250 dated 11.11.2024, of the Income Tax Act, 1961 (‘the Act’), by the Ld. Commissioner of Income Tax (Appeal)-11, Delhi, (‘Ld. CIT(A)’), for the assessment year 2017-18. The grounds of appeal are as under:

“1. The Id. CIT (A) erred in confirming the disallowance u/s 14A of the Act r.w.r. 8D of the IT Rules, 1962 though restricting it to Rs, 162215/-.

ii. The AO and the Id. CIT (A) erred in relying on CBDT Notification No. 43 / 2016 dt. 02.06.2016 without appreciating that the said Notification cannot be applied simpliciter and that the AO has to be first satisfied that the appellant has incurred expenses some of which relates to exempt income & the same has been claimed as deduction in the return of income filed which is not the facts of the instant case.

iii. The Id. CIT (A), in doing so, erred in not following the binding decision of the Hon. ITAT in the appellant's own case allowing his appeal for A.Y. 2016-17 having exactly the identical facts.”

2. The brief facts of the case are that the assessee is engaged in trading in equity, currency and commodity derivatives. For the year under consideration, the assessee has shown business income, short-term capital, gain, and interest income under the head, ‘income from other sources’. 2.1 However, Ld.AO noticed from the computation of total income that assessee has claimed interest income, dividend income from long-term capital gain under section 10(38) of the Act as exempt from income. Assessee had not made any disallowance under section 14 A of the Act on the assertion that expenses related to investments, generating exempt income were debited to the capital account, with no expenses claimed as deduction in the profit and loss account.

2.2 But the Ld. AO after providing opportunity of hearing made a disallowance of Rs.5,29,150/- under section 14 A read with rule 8D based on a calculation of 1% of the average monthly investment balance as stipulated in CBDT notification no. 43/2016 dated 02/06/2016.

3. Aggrieved by the said order, assessee preferred appeal and the same was partly allowed by confirming but restricting the disallowance to Rs.1,62,215/- as per the rate on total expenses claimed in the profit and loss account.

4. Aggrieved by the impugned order passed by Ld. CIT(A), the assessee has preferred the present appeal before us on the grounds mentioned hereinabove.

5. All the grounds raised by the assessee before us are interconnected and interrelated and pertains to Challenging the order of ld CIT (A) in restricting the disallowance, therefore, we have decided to take up all these grounds together and dispose of the same through the present consolidated order.

6. The Ld.AR appearing on behalf of the assessee, reiterated the same arguments as raised by him before the lower authority‘s and also submitted that the lower authority has erred in relying upon CBDT notification no. 3 of 2016 dated 02/06/2016, without appreciating, as the said notification cannot be applied simpliciter, and that the Ld.AO has to be first satisfied that the appellant has incurred expenses some of which relates to exempt income and the same has been claimed as deduction in the return of income. 6.1 It was further submitted that the issue in question is squarely covered in favour of the assessee by the decision of the ITAT in assessee’s own case in ITA No.299/Mum/2022 and the same