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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony
This is assessee’s appeal for the A.Y 2013-14 against the order of the CIT (A)-3, Hyderabad, dated 13.07.2018.
Brief facts of the case are that the assessee company, engaged in the business of running of hotels, filed its return of income for the A.Y 2013-14 on 23.10.2013 admitting loss of Rs.1,89,87,555/- under normal provisions and book profit of Rs.31,29,451/- for the purpose of payment of Minimum Alternative Tax u/s 115JB of the Act. During the assessment proceedings u/s 143(3) of the Act, the AO made disallowance u/s 14A r.w.rule 8D and also u/s 40(a)(ia) of the Act. Aggrieved, the assessee preferred an appeal before the CIT (A). Since none appeared for the assessee before the CIT (A), the appeal of the assessee was partly allowed. Against the confirmation of the disallowance u/s 40(a)(ia) of the Act, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The Ld. Commissioner of Income Tax (Appeals)- 3, Hyderabad, erred both in law and on facts in passing the appellate order upholding the assessment order passed by the AO ul s 143(3) of LT Act, 1961 on dt 13.07.2018.
2. The Ld. CIT (A) ought to have allowed the appeal in full.
3. The Ld.CIT (A) erred in upholding the disallowance made by the AO ul s 40(a)(ia) towards interest expenses of Rs.6,60,899/-.
The Ld.CIT (A) ought to have appreciated the submissions and evidence furnished before her, before passing her order.
5. The Ld. CIT (A) ought to have appreciated the fact that the A.O erred in making addition ul s 40(a)(ia) of the Act, without declaring the appellant as the assessee in default under section 201 (1) of the Act. 6. The Ld.CIT(A) ought to have appreciated the fact that the payee's have filed their returns and admitted the payments as their income and paid taxes in and therefore provisions of section 40(a)(ia) are not applicable. 7. The Ld.CIT(A) ought to have appreciated the fact the AO cannot made addition ul s 40a (ia) without there being any proceedings uls 201(1) of Income Tax Act 1961. 8. The appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal”.
Further, the assessee has raised the following additional grounds of appeal: “9) Ad per the ratio laid down by the Hon'ble Supreme Court of India in the case of National Thermal Power Co. Ltd vs. CIT (1998) 229 ITR 383 (S.C) the ITAT has jurisdiction to examine the question of law though not arisen before the CIT (A) but has arisen before the ITAT for the first time. 10) The learned CIT (A) ought to have considered the settled position of law that, the amount disallowed u/s 14A of the I.T. Act, 1961 cannot be added to arrive at book profit for MAT Calculation u/s 115JB of the Act.
11) The learned CIT (A) erred in not following decision of the Hon'ble Supreme Court in the case of Apollo Tyres Ltd – 122 Taxman 562 wherein it is held that “AO erred AO does not have the jurisdiction to go behind the net profit shown I the profit and loss a/c except to the extent provided in the Explanation to section 115J”. 12) The appellant craves leave to add, alter or modify or substitute any other point to the Grounds of appeal at any time before or at the time of hearing of the appeal”.
4. We find that these additional grounds are legal grounds but were not raised by the assessee before either the AO or the CIT (A). Therefore, we are inclined to admit the additional grounds of appeal and remand them to the file of the AO for denovo consideration in accordance with law.
In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in the Open Court on 3rd March, 2021.