SSL CONSOLIDATED LIMITED,HOWRAH vs. I.T.O., WARD - 13(4), KOLKATA NOW WARD - 13(1), KOLKATA, KOLKATA

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of ₹33,41,021/- by the ld. CIT (A) as made by the ld. AO u/s 14A of the Act r.w.r. 8D of the Rules.

The facts in brief are that this is a second round of litigation before us. The order passed by the ld. CIT (A) is an ex-parte order, for which the assessee filed the affidavit stating therein that only single notice for both the assessment years, was issued by the ld. CIT (A) for which the adjournment was sought by the assessee on the ground that office of the ld. AR was closed since the whole country was reeling under Covid pandemic. Thereafter, no notice was issued by the ld. CIT (A).

Considering the issue involved being an open and shut case in favor of the assessee, we are not inclined to restore the issue to the file of the ld. CIT (A) though the ld CIT(A) decided these appeals ex-parte. The issue involved in the present case is that the assessee has earned exempt income of ₹13,18,219/- against which the ld. AO made disallowance u/s 40(A) Rule 8D of the Rules of ₹33,41,021/-. In our opinion, the disallowance cannot exceed the amount of exempt income as has been held in the cases of Principal commissioner of Income Vs Reliance Chemotex Industries Ltd (2022) 138 tamann.com 199 (Cal) and Deputy Commissioner of Income Tax Vs Jite Shipyard Ltd.(2023) 157 taxmann.com 733(Delhi).Therefore, we set aside the appeal to the file of the ld. AO with a direction to restrict the disallowance to the exempt income. Accordingly, the appeal of the assessee is allowed for statistical purpose.

The issue raised by the assessee is against the confirmation of disallowance of ₹43,65,537/- by the ld. CIT (A) as made by the ld. AO u/s 14A of the Act.