M/S. SOYUZ TRADING CO. LTD.,,KOLKATA vs. DCIT, CIRCLE - 8(1), KOLKATA, KOLKATA

ORDER

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER This appeal filed by the assessee against the order dated 20.03.2017 passed by CIT(A)-17, Kolkata for AY 2011-12. The assessee raised additional ground of appeal

which reads as under:- 2. “For that on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeal) should have appreciated that since the aforesaid traveling expenses of Rs.42,77,443/- were directly attributable to taxable income, the same should have been kept out of purview of expenses disallowable u/s 14A of the Act and the disallowance u/s 14A should have been computed reducing such expenses.

2. We admit the above said additional ground raised by the assessee as it involves legal issue which requires no examination of new facts.

3. Heard both parties and perused the material available on record. It is noted that the AO invoked Rule 8D(2) and computed the disallowance under Rule 8D(iii) to the extent of Rs.67,76,087/- for the purpose of section 14A of the Income Tax Act, 1961 (in short “Act”). We find that the assessee also disallowed amount of Rs.4,94,420/- on its own. The contention of the Ld.AR before us is that the disallowance should be to the (ASSESSMENT YEAR-2011-12) extent of investments which yielded exempt income and placed reliance in the case of REI Agro Ltd. of Hon’ble High Court of Calcutta. Taking into consideration the said facts and the submissions of Ld.DR & Ld.AR and in the interest of justice, we deem it proper to remand the matter to the file of AO to compute disallowance in respect of those investments yielded exempt income in terms of decision of Hon’ble High Court of Calcutta in the case of REI Agro Ltd. (supra). The additional ground No.2 raised by the assessee is allowed for statistical purposes. The remaining ground raised by the assessee are become academic in view of our decision in addition of Ground No.2 as discussed above.

4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19.12.2018.