ANNASWAMY SURESH,CHENNAI vs. ITO NON CORPORATE WARD 3(1), CHENNAI

The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-11, Chennai in 21.02.2019 for the assessment year 2013-14.

While making the assessment for assessment year 2013-14 in Shri Annaswamy Suresh, the assessee’s case, the AO found, inter alia, that the assessee had investment portfolio as on 31.03.2012 at Rs.2 crore. Since, he has not made any disallowance U/s.14A r.w.r.8D, the AO after due consideration made a disallowance of Rs.5,85,439/-. Aggrieved, the assessee filed an appeal before the CIT(A). The ld.CIT(A) dismissed the appeal. Aggrieved against the order of the ld.CIT(A), the assessee filed this appeal.

The ld.AR submitted that the assessee had lent money to the sister concern out of his own funds and hand not invested in shares. Since, the assessee has not earned any exempt income during the relevant assessment year, no disallowance is warranted. Per contra, the ld.DR submitted that the AO held that Rs.2 crore was an investment. Before the ld.CIT(A), the assessee submitted that the impugned sum was an advance and no shares were allotted till 31.03.2013. Therefore, it is clear that the facts and circumstances associated with this issue has not been brought on record clearly for a due consideration and hence the appeal may be decided accordingly.

We heard the rival submissions. It is clear from the above, since the facts and associated circumstances have not been enquired duly, we deem it fit to set aside the order of the ld.CIT(A) and remit this issue back to the AO for a fresh examination. The assessee shall lay all material in support of his contentions before the AO and comply with the requirements of the AO in accordance with law. The AO, after affording due opportunity to the assessee, shall pass due order in accordance with law.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.