ANGLO COMMOTRADE PVT. LTD.,HOWRAH vs. DCIT, CIRCLE - 1(1), KOLKATA, KOLKATA

Ground No.1 is relating to confirmation of disallowance made on account of expenses under section 14A for the purpose of earning exempt income in the facts and circumstances of the case. We find no finding whatsoever given by the CIT(A) as there is no representation on behalf of the assessee in the first appellate proceedings. Ld.AR prayed to remand the matter to the file of AO instead of CIT(A) for denovo adjudication. He submits that there was no exempt income earned by the assessee during this year and hence no disallowance can be made u/s 14A of the Act by placing reliance in the case of Maxopp Investment Ltd. of Hon’ble Supreme

(ASSESSMENT YEAR-2012-13) Court in para 40. Ld. DR did not report any objection and in view of the same, we deem it proper to remand the matter to the file of AO for its verification in respect of examining the accounts of the assessee in computing the disallowance u/s 14A with respect to earning of exempt income. In any event, the disallowance cannot exceed the exempt income earned as held by the Hon’ble Calcutta High Court in the case of CIT vs Ashika Global Securities Ltd. ITAT 100/2014 [G.A.2122/2014] order dated 11.06.2018. Thus, Ground No. 1 raised by the assessee is allowed for statistical purposes.

Ground No.2 is relating to confirmation of disallowance made on account of sundry balances written off in the Profit & Loss A/c in the facts and circumstances of the case. It is noted from the assessment order in para 2 that the assessee could not produce any details in respect of sundry balances which were written off in the P&L A/c. It was pleaded before us that no proper opportunity was given. Therefore, we deem it proper to remand the matter to the file of AO for its verification on the ground of violation of principles of natural justice and the assessee is liberty to file all evidences, if any in support of its claim. Thus, Ground No.2 raised by the assessee is allowed for statistical purposes.

Ground No.3 is relating to confirmation of the addition made on account of expenditure incurred u/s 14A of the Act while computing the book profit u/s 115JB of the Act. It is noted from the record that the total income of the assessee was assessed under the normal provisions of the Act wherein the AO added disallowance to expenditure u/s 14A of the Act. Again, the said expenditure was added to the book profit computed u/s 115JB of the Act. In view of the judgement of the Special Bench of the Tribunal in the case of Vireet Investment Pvt. Ltd. where no such adjustment of disallowance u/s 14A of the Act is permissible while

In the result, the appeal of the assessee is allowed for statistical purposes.