TAMIL NADU FISHERIES DEVELOPMENT CORPORATION LIMITED,CHENNAI vs. DCIT CORPORATE CIRCLE 3(1), CHENNAI

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ITA 2865/CHNY/2017Status: DisposedITAT Chennai15 June 2022AY 2013-147 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in sustaining the disallowance of the claim of expenses towards investment written off without proper reasons. The Tribunal also noted that the CIT(A) failed to adjudicate the issue of non-granting of tax credit under Section 115JAA.

What were the facts?

The assessee claimed an expenditure of Rs. 2,40,000 towards investment written off. The Assessing Officer disallowed this claim, treating it as capital expenditure. The CIT(A) upheld this disallowance.

What were the issues?

Whether the write-off of investment is a deductible expense and whether the CIT(A) properly adjudicated the issue of tax credit under Section 115JAA.

Which sections of the Income-tax Act were involved?

Section 115JAA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI G. MANJUNATHA, HON’BLE & SHRI ANIKESH BANERJEE

Hearing: 26.05.2022Pronounced: 15.06.2022

PER G. MANJUNATHA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-11, Chennai, dated 29.08.2017

and pertains to assessment year 2013-14. 2. The assessee has raised the following grounds of appeal:

1.

The common order of The Commissioner of Income Tax (Appeals) 11, Chennai dated 29.08.2017 in I.T.A.Nos.117 & 196/CIT(A)-11/2016-17 in so far as the Assessment Year 2013-14 is contrary to law, facts, and in the circumstances of the case. ·

2.

The CIT (Appeals) erred in sustaining the disallowance of the claim of expenses towards investment written off to the extent of Rs.2,40,000/- in the computation of taxable total income without assigning proper reasons and justification.

3.

The CIT (Appeals) failed to appreciate that the misreading of the government order dated 14.09.2012 would vitiate the decision in para 8.3 of the impugned order.

4.

The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law.

5.

The Appellant craves leave to file additional grounds/arguments at the time of hearing.

3.

The assessee had also filed a petition for admission of additional

grounds of appeal, which is re-produced as under:

The CIT (Appeals) erred in not adjudicating the issue raised on the non-granting of tax credit allowable u/s.115 JAA of the Act, amounting to Rs.27,99,500/- brought forward from the Assessment Year 2012-13 as mentioned in the return of income filed for the Assessment Year under consideration in Schedule MATC in the computation of taxable total income without assigning proper reasons and justification.

4.

The brief facts of the case are that the assessee is engaged in the business of management of reservoirs, marketing of fish & fish net, diesel

bunks, etc., filed its return of income for the AY 2013-14 on 01.10.2013

declaring income of Rs.7,20,01,780/-. During the course of assessment

proceedings, the AO noticed that the assessee has claimed expenditure

towards investment written off of Rs.2,40,000/- and after considering

relevant details filed by the assessee, has disallowed a sum of Rs.2,40,000/- on the ground that said expenditure is in the nature of capital

expenditure, which cannot be allowed as deduction. The assessee carried

the matter before the First Appellate Authority, but could not succeed. The Ld.CIT(A) for the reasons stated in his appellate order dated 29.08.2017

sustained additions made by the AO by holding that the expenditure

claimed towards write off investment in capital loss and therefore, the same

cannot be allowed as deduction. Aggrieved by the order of the Ld.CIT(A),

the assessee is in appeal before us.

5.

The Ld.AR for the assessee referring to the Government Order vide

GO (Ms) No.159 dated 14.09.2012, submitted that the assessee has written

off investment in equity share capital in joint venture company promoted

by the assessee under the name of M/s.Tamil Nadu Marine Plast Pvt. Ltd.,

because, said company has closed business and the name has been stricken

off by the

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