M/S. ASPIRE SYSTEMS INDIA PRIVATE LIMITED,CHENNAI vs. ADL. CIT, COMPANY RANGE-1, CHENNAI

These appeals filed by the Revenue as well are assessee are directed against different orders of the ld. Commissioner of Income Tax (Appeals) 1, Chennai, dated 29.03.2019 relevant to the assessment year 2014-15 and order dated 30.07.2020 for the assessment year 2011-12.

The appeal filed by the Revenue for the assessment year 2014-15 is delayed by four days in filing the appeal, for which, the Department has filed a petition for condonation of the delay in the form of an affidavit, to which; the ld. Counsel for the assessee has not raised any serious objection. Consequently, since the Department was prevented by sufficient cause, the delay of four days in filing of the appeal stands condoned and the appeal is admitted for adjudication.

Brie facts of the case are that for both the assessment years 2011- 12 and 2014-15, the assessee has claimed expenses towards payment of Professional charges. During the course of assessment proceedings, the Assessing Officer asked the assessee to furnish details of expenses debited to P & L account along with compliance to TDS provisions as per the provisions of Chapter XVII-B. After considering the submissions of the assessee, the Assessing Officer disallowed ₹.18,22,76,102/- for the assessment year 2014-15 and ₹.4,54,82,254/- for the assessment year 2011-12 under section 40(a)(i) of the Income Tax Act, 1961[“Act” in short]. On appeal, after considering the submissions of the assessee, the ld. CIT(A) deleted the addition made by the Assessing Officer.

Against the disallowance made under section 14A of the Act for the assessment year 2014-14, the ld. CIT(A) directed the Assessing Officer to verify the interest expenditure and re-compute the disallowance under section 14A of the Act.

Against the appellate orders for the assessment year 2014-15 and 2011-12, the Department preferred further appeals before the Tribunal. The ld. DR has submitted that with regard to the disallowance under section 40(a)(i) of the Act, similar issue was subject matter in appeal before the Tribunal for the assessment year 2009-10 and the Tribunal in its order in dated 25.02.2015 remitted the issue back to the file of the Assessing Officer to consider the entire facts of the case and pass orders in accordance with law. Accordingly, for the assessment year 2009-10, the Assessing Officer has already passed the order and the appeal is pending before the ld. CIT(A) and thus, the ld. DR pleaded that the issue under appeals may be remitted back to the file of the ld. CIT(A) for fresh adjudication. With regard to the disallowance under section 14A of the Act for the assessment year 2014-15, the ld. DR has submitted that by considering the fresh evidence, the ld. CIT(A) has remitted the matter to the file of Assessing Officer to verify the interest expenditure, which is in violation of Rule 46A of the Income Tax Rules, 1962.

On the other hand, the ld. Counsel for the assessee also submitted that all the issues may be remitted back to the ld. CIT(A) for fresh adjudication.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. With regard to the disallowance made under section 40(a)(i) of the Act, vide order in & CO No. 137/Mds/2013 dated 25.02.2015, the Tribunal has noted that neither the Assessing nor the ld. CIT(A) discussed the factual aspects of the issue and therefore, the issue has been remitted back to the file of the Assessing Officer to examine all the facts and decide the issue afresh in accordance with law. It appears according to the submissions made by both the parties that the Assessing Officer has already passed the order for the assessment year 2009-10 and the appeal is pending before the ld. CIT(A). In view of the above facts, we are of the considered opinion that similar issue raised in the appeals for the assessment year 2014-15 and 2011-12 should also go back to the ld. CIT(A) to a decision on facts and also on law. In view of the above, we set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh in 5 I.T.A. Nos. 2000/Chny/19 & 762 & 785/Chny/20 accordance with law.

With regard to the disallowance under section 14A of the Act for the assessment year 2014-15, the ld. CIT(A) is directed to decide the issue afresh after obtaining remand report on the fresh evidences produced by the assessee during the course of appellate proceedings.

With regard to the appeal filed by the assessee for the assessment year 2011-12 in , the assessee has challenged the order of the ld. CIT(A) on confirmation of disallowance of ₹.3,17,656/- under section 14A of the Act as well as confirmation of disallowance of ₹.3,16,795/- under section 40(a)(ia) of the Act. After considering the rival contentions, both the grounds raised by the assessee are also remitted back to the file of the ld. CIT(A) for fresh adjudication.