Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI PRAMOD KUMAR, VP & SHRI ABY T. VARKEY, JM
PER ABY T. VARKEY, JM: This is an appeal preferred by assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-48, Mumbai dated 24.02.2022 for assessment year 2016-17. 2. The grounds of appeal preferred by assessee are as under: - “Disallowance of Interest under section 36(1) (iii) of the income-tax Act the Act - Rs.149.80 crores
The learned Assessing officer (AO) and learned CIT(A) erred in disallowing interest of Rs.149.80 crores pertaining to loans of Rs.1253.53 crores granted to related parties contending them to be interest free without appreciating the fact, that out of the total amount, only security deposits of Rs.96.53 crores are interest free refundable
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. deposits, provided in routine course of business and the balance Rs.1157 crores are loans given at arms length rate of interest
The learned AO and CIT(A) erred in considering the loans as interest free loans when in fact the Appellant has received an interest of Rs.25.69 crores on such loans which has been credited to profit and loss account and AO himself has referred to this amount while reducing it from the proposed adjustment.
The learned AO and CIT(A) has erred in disregarding submissions made wherein party wise details of loans taken, Inter Corporate Deposits (ICDs) given, etc. along with rate of interest charged and paid has been submitted. The Appellant prays that the adjustment made by the learned AO and upheld by the learned CIT(A) in respect of partial disallowance of interest expense claimed in excess of interest income earned on ICDs be deleted.
Disallowance under section 14A r.w.r. 8D - Rs 18.50 crore
The learned AO and CIT(A) erred in disallowing 0.5 percent on entire investment as administrative expense without appreciating the fact that Appellant has not earned any exempt income during the year from the said investments.
The learned AO and CIT(A) erred in making an adhoc disallowance under section 14A without appreciating the fact that, no specific borrowings were made for the aforesaid investment and no expense is incurred on the same.
The learned AO and CIT(A) has erred in disregarding the Appellants detailed submissions and the Supreme Courts decisions representing the law of the land to the effect that under the facts and circumstances of the case no disallowance can be made in the case of the Applicant.
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd.
The learned CIT(A) has erred in law in making disallowance based on proposed Explanation in section 14A vide Finance Bill 2022 and applying explanation retrospectively for the year under consideration without appreciating the fact that on the day the CIT(A) order was passed it was a Finance Bill 2022 and not an Act. Further, learned CIT(A) has not considered that memorandum explaining the provisions of the Bill clearly specifying that the said explanation is applicable from April 1, 2022 i.e. from Assessment 2022-23 and also overlooking various judicial decisions including that of Hon’ble Supreme Court in this regard. The Appellant prays that the disallowance made by the learned AO and upheld by the learned CIT(A) in respect disallowance under Section 14A of the Act read with Rule 8D of the Income tax Rules be deleted. Disallowance of operation & Maintenance O & M Expenses and other expenses under section 37 Rs.11.53 crores
The learned AO and CIT(A) erred in making an adhoc disallowance of 10 percent of operating and maintenance expenses and others under other expenses citing lack of details provided by Appellant
The learned AO and CIT(A) has erred in considering a sum of Rs.100.91 crores as operating and maintenance expenses as against Rs.15.39 crores, and a sum of Rs.14.48 crores as others under other expenses as against Rs.2.23 crores
The learned AO and CIT(A) has erred in disregarding the explanation made during the course of assessment proceedings that these are actual business expenditure incurred wholly and exclusively for business purpose, and since neither the appellant nor the receiving entity of O & M expenses claim any tax holiday, the transaction under reference is tax neutral.
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. The Appellant prays that the disallowance made by the learned AO and upheld by the Learned CIT(A) of O&M and other expenses be deleted. Order bad in law in the absence of an opportunity for personal
The learned CIT(A) erred in passing the order without providing an Opportunity of personal hearing, though requested by the Appellant. The Appellant prays that the order being passed in violation of principles of natural justice and against the provisions of Income Tax Act, 1961 is bad in law and should be quashed. The Appellant craves leave to add to, alter, amend or withdraw all or any of the grounds of appeal herein above and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per law.”
In respect of the Ground nos. 1 to 3 (supra), the AO during assessment proceedings had noted that he had issued notice u/s 142(1) of the Act on 11.10.2018 and in response the assessee filed its submissions on 05.12.2018, 13.12.2018 & 25.12.2018 (refer PB) and the following facts are discerned. That during the year, the assessee company had an integrated oil terminal at Vadinar in Jamnagar, a product berth crude oil tanks, refined petroleum product and intermediate tanks. The assessee had filed return of Income on 30.11.2015 declaring total loss of Rs.9,83,93,382/-. Subsequently the case was selected for scrutiny under CASS and notice u/s. 143(2) dated 20.07.2017 was issued and served on the assessee company. Subsequently the assessee filed revised return of income declaring total loss of Rs.9.63,42,037/- under normal provisions and ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. Rs.19,10,72,441/- u/s.115JB of the Act. The assessee has stated that the revised return of income was filed as certain details/deductions in computation of income were missed out in the original return of income. Notices u/s 142(1) were issued by the AO to the assessee on 11.10.2018 calling for various details and in response to the notices, the assessee company filed various submissions before the AO on 05.12.2018, 13.12.2018 & 25.12.2018 (refer PB) and the AO framed the assessment order dated 27.12.2018 by computing the total income at Rs. 170,21,08,438/- by making certain additions which are noted as under;-.
On the issues raised by assessee in ground no. 1 to 3, the AO had disallowed Rs.149,80,13,000/- u/s 36(1)(iii) of the Act by holding as under:
“4. Interest u/s 36(1) (iii) of the Income-tax Act, 1961 On perusal of the Balance Sheet of the Assessee Company, it is seen that the assessee had advanced loans to its subsidiary companies /group concerns amounting to Rs.1253.53 crores. Further, from the profit and loss statement it is seen that the assessee company has recovered an amount of Rs. 25.69 crores as interest on above loan and advances. During the course of assessment proceedings, the assessee company was asked to provide statements showing details of loans taken along with the rate on which such loans were availed along with details of loans given alongwith the rate on which such loans were advanced. Further the assessee was asked to give its reasons as to why
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. disallowance of interest cost should not be made in accordance of section 36(i)(iii) based on its average cost of interest on loan. The assessee filed its reply vide its letter dt. 25.12.2018 which is perused and placed on record. The assessee has made a plea that the assessee has received interest on advances given at the rate of 13% which is at arm’s length interest rate and therefore no disallowance u/s 36(i)(iii) should not be made. The assessee has not submitted any details as to on which loans/advances the assessee has earned such interest. The assessee has also not submitted the statement of loans/advances as called for. . The onus of proving that the borrowed money had not been utilised for non business purpose was on the assessee. The Madras High Court decision in the case of CIT Vs Coimbatore Salem Transport Pvt. Ltd. (61 ITR 480,487) may be referred to in this regard. Further, the Madras High Court in the case of Mir Mohammad Ali (38 ITR 413,418) held that it is for the assessee to prove that each of the loans on which he paid the interest was utilised for the purpose of his business. The said decision has been affirmed by the Supreme Court in the case reported 52 ITR 165. The Delhi High Court decision in the case of R Dalmia Vs. CIT (133 ITR 169) and the Orissa High Court decision in the case of Indian Metals and Ferro Alloys Ltd. vs. CIT (193 ITR 344) also support the above proposition. In this connection, reliance is also placed on the judgement of Bombay High Court in the case of Phalton Sugar Works Limited Vs CIT 208 ITR 989 the operative part of the said judgement is reproduced as under: “Section 36(1) (iii) of the Income-tax Act, 1961, provides for deduction for payment of interest only if the assessee borrows capital for its own business. The business of the subsidiary company cannot be considered in law as the business of the assessee. The finding of the Tribunal based on commercial expediency appears to us to be ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. incorrect. The fact remains that the moneys borrowed were utilised for business of the subsidiary company and not for the business of the assessee as such. in this view of the matter, we hold that the Tribunal was not justified in holding that the interest on loans borrowed for advancing to its subsidiary company was allowable under section 36(1)(m) of the Income-tax Act, 1961. The plain language of section 36(4) (iii) of the Income-tax Act, 1961, militates against the submissions urged on behalf of the assessee.” The Hon'ble Kerala High Court in the case of C.IT. vs. V. I. Baby & Co. 254 ITR 248 has held that the disallowance on account of proportionate interest was proper. In the above case the assessee had given advances to partners, their relatives and sister concerns. The assessee had made the above investments in sister concerns and was not charging any interest. The Hon'ble High Court held that the assessee with liquidity cannot claim that it can give interest free advances to the partners and others and then borrow funds from the Bank on interest for business purpose. Such borrowings will not be for business purpose but for supplementing the cash diverted by the assessee without any benefit to it. Therefore, so long as assessee is not the beneficiary of the investments made by the partners, their relatives and sister concerns and so long as the advances are interest free, the Assessing Officer is perfectly justified in disallowing the interest in proportion to the advances made. The above decision is squarely applicable in the assessee's case considering the facts discussed in the earlier paragraphs. In view of the same the average Finance Cost Procurement rate of interest = long term borrowings + Short term borrowings * 100 i.e. 3175601000 *100 18859411000 + 3197366000
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. = 14% In view of the same interest u/s 36(1)(iii) of the Act, is disallowed with respect to following interest free loans granted to parties mentioned below: S. No. Total interest free loans granted to related parties Disallowance u/s 36(1)(iii) @ 14% 1 Rs.12535300000 @ 14% Rs.175,49,42,000 2 Less: Amount credited to P/L Rs.25,69,29,000/- 3 Rs.149,80,13,000
Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) wherein the assessee brought to the notice of the Ld. CIT(A) that the appellant needed funds to avoid being declared NPA (Non- performing asset) by the Lender Financial Creditors. It was brought to the notice of Ld. CIT(A) that appellant had set up Terminal facilities at Vadinar in Gujarat and was providing Crude/Product handling services to Nayara Energy Limited (hereinafter in short “Nayara”) including receipt, storage, handling, and dispatch of crude oil and petroleum products. These facilities were for the exclusive use of Nayara; and hence it can be seen that Appellant has been solely dependent on Nayara for it revenues.
In March 2015, the appellant/assessee company faced challenges in servicing the, financial obligations and raising funds for new projects. And as per the appellant/assessee, there was a likely default of lenders’ obligations and consequently, being declared as an NPA, which fact according to appellant/assessee was also reflected in Auditors report wherein there is reference of delay in repayment of ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. external loans and interest thereon. And it was common knowledge that any default of loan or interest repayment was likely to have an adverse impact on the current operations and consequently would hamper its fund raising ability for the new Project, and therefore Appellant/assessee resorted to Internal accruals and borrowings. According to Appellant/assessee it has total gross block of Rs.3.065.72 crores and shareholder funds is 784.07 crores as on 31 March 2016. And that appellant Company has taken various secured and unsecured loans from various banks at the weighted average interest rate of 10.5% and utilized the same for construction and operation of above stated facilities. Further according to appellant/assessee these borrowings were under the Master Restructuring agreement (MRA) and as per the terms of MRA such money could not have been utilized for any other purpose other than construction or operation of ports and handling business.
In the aforesaid circumstances, Appellant requested Nayara to provide inter corporate deposits (ICDs) at the interest rate of 13% and Security Deposit to enable to continue its operations and the proposed projects unhindered.
According to appellant/assessee it resorted to temporary lending from the borrowings to earn income on the temporary idle funds. And since, not all the borrowed funds could be immediately put to use, the appellant/assessee company in turn lended a portion of these ICDs to ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. related parties for which interest rate of 13.25% was charged (in one case 13.10%). This according to appellant/assessee enabled the Company to utilize the funds which would otherwise have remained temporarily idle, and earned a decent interest income at a rate higher than what was incurred in obtaining those funds.
It was also admitted by the appellant/assessee that it has given interest free refundable deposits of Rs.96.63 crores to related parties in ordinary course of business. These being refundable deposits, which are not applied to invoices raised under the contract no interest was charged on them because according to appellant/assessee it was a routine business practice.
The Appellant admitted to have given loans worth Rs.1,157 crores to related parties at an interest rate which is higher than the interest rate paid by Appellant to Banks and related party lender. And the total interest income of Rs 25.69 crores has been credited to P&L and which is reflected in Note no 35 of audited financials. Appellant submitted that AO has made adhoc disallowance of interest expense in excess of interest income earned presuming that interest was not charged on ICDs given. However, the Ld. CIT(A) did not accept the aforesaid submission of assessee/appellant and held as under: - “5.10 During the appellate proceedings, the assessee made various arguments against AO’s adjustments and filed submission as made before the AO. The brief of the issue is that, the appellant had set up Terminal facilities at Vadinar in Gujarat, and was providing
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. Crude/Product handling services to Nayara Energy Limited ("Nayara") including receipt, storage, handling, and dispatch of crude oi] and petroleum products. These facilities were for the use of Nayara hence as contended, Appellant has been dependent on Nayara its revenues. In March 2015, the company was facing with challenges in servicing their financial obligations and raising funds for new projects. There was a likely default of lenders’ obligations and consequently, being declared as an NPA. The assessee was in need for funds as any default on loan or interest repayment was likely to have an adverse impact on the current operations and may hamper its fund raising liability for the new Project.
11 Therefore, to overcome this crises the Company has taken various secured and unsecured loans from various banks at the weighted average interest rate of 10.5% and utilized the same for construction and operation facilities. In these circumstances the appellant requested Nayara to provide inter corporate deposits (ICDs) at the interest rate of 13% and Security Deposit to enable to continue its operations and the proposed projects unhindered and to earn income on temporary idle funds: Since, not all the borrowed funds can be immediately put to use and in turn the Company a portion of these ICDs to related parties for which interest rate of 13.25% was charged (in one case 13.10%). The appellant contended that this enabled the Company to utilize the funds which would otherwise have remained temporarily idle and earn a decent interest income at a rate higher than what was incurred in obtaining those funds. However, it can be pointed out that appellant has charged average cost of interest on loans and advances given to its subsidiary companies. Further, Appellant has stated having given interest free deposits of Rs.96.63 crores to related parties in ordinary course of business which was refundable. Though, the deposits are refundable, such huge amount running in crores of rupees cannot be ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. accepted as given without charging any interest on it. The appellant company itself state that it was running the business in financial crises and over and above, in such a challenging situation how it can afford of giving interest free deposits to related parties.
12 Once it is established that the assessee had raised certain loans for his business purposes, on which interest liability is incurred and on the other hand the funds were advanced to sister concern for non business purposes on interest free or on average interest basis, then the interest payable by the assessee to the financial institutions cannot be held to be use of funds for business purposes and no deduction accordingly can be permitted under section 36(1)(iii) of the Act. The appellant has casually claimed that the said funds are used for business purpose. The criteria that capital should have been borrowed for the purpose of business or profession is not established by the appellant during the appellate proceedings as well during the course of assessment proceedings. Appellant’s contention that AO has considered the weighted average rate of borrowings and presumed that entire amount of loans given are out of it borrowed funds without appreciating the fact that the company has shareholders fund of approx. Rs. 784.07 cr. as at March 31, 2016 the same should have also been considered for giving loans cannot be accepted in the absence of any credible evidence brought before the undersigned. Further, from the facts of the case, it appears that in its critical financial condition there not much difference in paid interest on borrowed funds and received interest on loan issued so that assessee can earn remarkable profit on it The assessee has not submitted any details in respect of loan availed and loan issued and thus failed to establish the genuineness of the transactions. No new evidence is placed before the undersigned except making various contentions. The onus of proving that the borrowed
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. money had not been utilised for non -business purpose was on the assessee
13 Further, appellant has relied upon the decision of Hon’ble Supreme Court in the case of S.A. Builders Ltd. v/s. CIT, Chandigarh that, money can be said to be advanced to sister concern for commercial expediency. The test, in my humble opinion, in such a case is really whether this was done as a measure of commercial expediency for which appellant has failed. No details of bifurcation of amount is submitted before me at appellate stage. Assessing Officer had taken right view of the comment and disallowed interest on the amount advanced to the said company. In view of overall facts as discussed above, this ground of appeal is Dismissed.”
Assailing the aforesaid action of Ld. CIT(A) the Ld. AR of the assessee brought to our notice that an amount of Rs.230 crores and Rs. 927 crores (i.e. total Rs.1157 crores) was given to the related party only for two (2) days and the assessee had levied rate of interest @ of 13.25% on Rs. 230 crores and 13.10% for Rs.927 crores (refer page no. 114 of the P.B); and that only Rs.96.5 crores was given towards security deposit which is refundable and which was for the purpose of business. Moreover, it was also brought to our notice that the assessee had own fund to the tune of Rs.784.06 crores. And therefore, according to Ld. AR that it may be presumed that the amount of Rs.96.53 crores which was given as security deposits (interest-free) for business purpose was sourced from its own funds and for that preposition relied upon the decision of the Hon’ble Bombay High
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 313 ITR 340 wherein the Hon’ble Bombay High Court held that “when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn”. However, the Ld. CIT(A) did not agree and confirmed the additions. Aggrieved, the assessee is before us. Per contra the Ld. CIT-DR relied on the order of the Ld. CIT(A) and contended that assessee failed to produce relevant details/documents despite asked for by both AO/Ld. CIT(A). So the Ld. CIT(A) rightly confirmed the action of AO. Therefore, he doesn’t want us to interfere with the order of Ld. CIT(A).
We have heard both the parties and perused the records. The Ld AR drew our attention to page no. 144 of the P.B to show that the assessee had given Rs.230 crores and 927 crores [i.e. total Rs.1157 crores] only for two (2) days and that also on interest at the rate of 13.25% and 13.10 respectively (refer page 114 P.B). Further, it was brought to our notice that the assessee had own funds to the tune of Rs.784.06 crores. And therefore, according to Ld. AR in such a back- ground, it may be presumed that the amount of Rs.96.53 crores which was given as security deposits (interest-free) for business purpose was sourced from its own funds. Therefore, relying on the decision of the Hon’ble Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd. (supra) wherein it was held “when the assessee is possessed of mixed funds which include its own funds in sufficient
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. quantity, a presumption that its own funds were utilized for the advances is to be drawn”. Thus, according to Ld. AR, therefore, no disallowance of interest was warranted in this case. However, we note that AO as well as Ld. CIT(A) has observed that assessee has merely stated that the interest expenditure was for business purposes and did not bring any material or details to substantiate the same. We note that other than the averment there was no evidence/material placed before AO/Ld CIT(A) to substantiate that that the interest expenditure was for business purposes. We also note that AO has framed the assessment on 27.12.2018 and the assessee’s grievance before the Ld. CIT(A) was that no proper opportunity was given to it for producing the details/documents (refer ground no. 4) “AO has disregarded the fact that the appellant having filed the submission dated 25.12.2018 with reference to the show cause notice regarding by it only on 24.12.2018, adequate opportunity was not given.” We note that before us also appellant/ assessee had raised ground which reads as under: - “Order bad in law in the absence of an opportunity for personal hearing
The learned CIT(A) erred in passing the order without providing an opportunity of personal hearing, though requested by the appellant. The appellant prays that the order being passed in violation of principles of natural justice and against the provisions of Income Tax Act, 1961 is bad in law and should be quashed.”
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd.
In the light of the discussion as well as taking note of the facts noted (supra), we note that there was change of incumbent AO during assessment proceedings and notice u/s 142(1) of the Act was issued only in Oct, 2018 and assessment was framed in Dec,2018. And the AO has remarked that the assessee did not file the relevant details of loans/advances on which the assessee has earned interest and the statement of loans/advances and further the Ld. CIT(A) has observed that at para no. 5.12 of his order “The appellant has casually claimed that the said funds are used for business purpose. The criteria that capital should have been borrowed for the purpose of business or profession is not established by the appellant during the appellate proceedings as well during the course of assessment proceedings.”[emphasis given by us].
In the light of the above discussion, we are of the considered view that assessee did not get proper opportunity before the AO during assessment stage itself. So we relying on the decision of Hon’ble AO during the assessment proceedings to furnish details/documents called for by the AO. Therefore, we are of the considered view that this issue may be denovo assessed by the AO. Needless to say that AO to give proper opportunity to assessee and liberty is given to it to file written submission/document/details to ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. substantiate its claim as the issue. Ground no. 1 to 3 are are allowed for statistical purposes.
Coming to the ground no. 4 to 7 which are regarding disallowance u/s 14A r.w.r. 8D of the Income Tax Rules (hereinafter “the Rules”) of Rs.18.50 crores.
At the outset, the Ld. AR of the assessee brought to our notice that the assessee did not receive any exempt income. This fact, could not be controverted by Ld. CIT-DR even before us. In such a scenario, the assessee relied on the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd. vs CIT (378 ITR 33) wherein their Lordship’s has held that when the assessee had not earned exempt income then no disallowance u/s 14A of the Act was warranted. However, the Ld. CIT(A) relying on the amendment brought in by Finance Act, 2021 did not accept the contention of assessee. So the appeal before us. The facts are undisputed. We do not countenance this impugned action of Ld. CIT(A) on this issue. We note that similar contention of Ld. CIT(A) (amendment by Finance Act 2022) has been dealt by us in a recent decision of this Tribunal in the case of CIT Vs. V.K. Raheja Corporate Services Pvt. Ltd (ITA. No. 1970/Mum/2021 & ITA. No. 2218/Mum/2021 dated 03.08.2022) wherein the Tribunal has also dealt with the amendment inserted in Section 14A of the Act vide Finance Act, 2021 and held it to be prospective in operation w.e.f. 01.04.2022. So therefore, since we are dealing with AY. 2016-17, on ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. the issue in hand, the decision of the Hon’ble Delhi High Court in Cheminvest Ltd. holds the field; and therefore we hold the action of Ld. CIT(A) to be erroneous and hold that if no exempt income is received by the assessee, no disallowance u/s 14A of the Act was warranted. Therefore, these grounds of appeal of the assessee are allowed.
Ground no. 8 to 10 are regarding disallowance of operation & maintenance (O & M) expenses and other expenses under section 37 of the Act to the tune of Rs.11.53 crores.
At the outset, the Ld. AR submitted that the AO has incorrectly taken note of the expenses. According to him, the assessee had filed rectification petition dated 14.08.2019 and drew our attention to page no. 94 to 96 of the P.B. However, it is admitted fact that assessee could not furnish the details of the expenses before the lower authorities due to which the AO had resorted to ad hoc disallowance and the CIT(A) has followed the same. Taking into consideration the aforesaid facts, we note that the AO had made ad hoc disallowances (figures taken by AO are disputed) on the grounds that the assessee did not furnish the details of ibid expenses. In such a scenario, we are inclined to set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the AO with a direction to the assessee to furnish the details of the ibid expenses; and therefore we set aside the impugned order of Ld. CIT(A) and restore this issue back to the file of AO and direct him
ITA Ns. 777/Mum/2022 A.Ys. 2016-17 Nayara Energy Ltd. to decide the allowability of expenses in accordance to law after looking into the details and explanation and documents filed to substantiate its claim of expenses. Needless to say, that AO to give assessee proper opportunity and the assessee is at liberty to file details/explanation/supporting evidence/documents/written submission etc. to substantiate its claim of expenses.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on this 10/10/2022. (PRAMOD KUMAR) JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 10/10/2022. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //// उि/सहधयक िंजीकधर /(Dy./Asstt.