RIG CONSULTANTS PRIVATE LIMITED,KOLKATA vs. INCOME TAX OFFICER, WARD-4(1), KOLKATA, AAYAKAR BHAWAN

This appeal of the assessee for the assessment year 2014-15 is directed against the order dated 27.01.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee has raised the following grounds of appeal:

Brief facts of the case are that the assessee filed its return of income for the A.Y. 2014-15 by declaring loss of Rs. 29,80,712/-. The case of the assessee was selected for scrutiny under CASS followed by notices issued u/s 143(2) and 142(1) of the Act. In pursuance to notices, ld. AR appeared before the AO from time to time. However, the assessing officer while framing the assessment, the assessed income due to not disclosing the following interest income which are as under: “i. U/s 194A Rs. 2,25,464/- ii. U/s 193 Rs. 9,97,617/- iii. U/s 194C Rs. 19,146/- Rs. 4,037/-” iv. U/s 194J Besides the ld. AO disallowed sum of Rs. 18,27,590/- u/s 14A of the Act and also miscellaneous expenses of Rs. 21,27,089/- in the hands of assessee.

Dissatisfied with the above order, assessee went into appeal before the ld. CIT(A) where the appeal of the assessee was dismissed.

Feeling aggrieved by the above order, assessee is in appeal before the Tribunal.

The first ground of appeal is that ld. CIT(A) erred in sustaining the addition made u/s 14A of the Act though the assessee company is not received any exempt income during the year under consideration. Therefore, the ld. AR prayed before the bench for deleting the addition made by the authorities below. On this issue, ld. DR submitted that the assessee is not received any exempt income during the year but has made substantial investment during the year. In this context reliance

On the other hand, ld. DR supports the decision rendered by the authorities below.

We, after hearing the rival submissions of the parties and perusing the material available on record, find that assessee had not earned any exempt income during the year under consideration and it was also accepted by the ld. AO while framing the assessment order that no such exempt income was earned by the assessee. Therefore, in view of the various judicial pronouncements, the addition made by the AO cannot be sustained and we respectfully following the decision rendered by the Hon’ble Supreme Court in the case of PCIT vs Oil Industry Development Board (supra), the instant ground of appeal is hereby allowed. Further, we direct the AO to delete a sum of Rs. 18,25,590/- as made in the case of assessee.

We after hearing the rival submission of the parties and on perusal of the record along with document filed by the assessee, notice that the ld. AO has made an addition of Rs. 12,46,264/- in the hands of assessee. However, while going through the documents placed before us by the ld. AR, we observe that Rs. 12,27,114/- has been clearly shown in its financial statement. However, from the facts of the case, we find that there is still remain a difference of Rs. 19,150/-. Accordingly, we direct the AO to delete a sum of Rs. 12,27,114/- in the hands of assessee as it has already been shown as income in the financial statement of assessee and sustain the remaining sum of Rs. 19,150/-. In terms of above, the issue is partly allowed as indicated above. Since remaining grounds no. 3, 4 and 5 are not pressed by the assessee therefore need not required to adjudicate any more.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 09.10.2023