M/S TEAMLEASE SERVICES PVT LTD,MUMBAI vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-3(3)(2), MUMBAI

In this appeal, the assessee has raised several grounds and three additional grounds. Learned AR of the assessee submitted that Ground No. 4 is not pressed and this ground is rejected as not pressed. She also submitted that there are only two issues to be decided. First issue is about disallowance of Rs. 175,756/- u/s 14A and the second issue raised by way of additional ground is about disallowance of Rs. 54,59,156/- claimed by the assessee as ESOP expenses. There is one more ground about disallowance of Rs. 41,38,909/- as capital expenditure but for this ground, no argument was advanced by the learned AR of the assessee and hence, we infer that this ground is not pressed and we reject it as not pressed.

In course of hearing, learned AR of the assessee submitted that the assessee has not earned any exempt income in the present year and therefore, no disallowance can be made u/s 14A. The bench observed that Schedule 20 of the audited accounts is about other income and it includes an item “Other Income” Rs. 33,14,484/- but its details are not available. In reply, learned AR of the assessee submitted that such details are not readily available and hence, the matter may be restored to AO for a fresh decision and if it is done, the assessee will furnish the required details. About additional ground in respect of ESOP expenses, she submitted that this issue was not raised before CIT (A) and therefore, on this issue, there is no decision of CIT (A) but this issue is raised before the tribunal by way of an additional ground in view of subsequent development of law in the form of several judgments and therefore, the additional ground should be admitted and the matter may be restored to CIT (A) for a decision. Learned DR of the revenue supported the orders of the lower authorities. 4. We have considered the rival submissions. We feel it proper to restore both these issues i.e. the issue about disallowance u/s 14A and disallowance of ESOP expenses to CIT (A) because this fact is not clear as to whether the assessee earned any exempt income in the present year or not. About ESOP expenses disallowance, we admit the additional ground because the issue involved is a legal issue and facts are available on record but there is no decision of CIT (A) on this issue as the same was not raised before CIT (A). We order accordingly. Learned CIT (A) should provide adequate opportunity of being heard to both sides. 5. In the result, the appeal of the assessee is partly allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page.