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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
The present Appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals)-53, Mumbai (‘CIT(A)’) vide order No. CIT(A)/53/DCCC-36/IT-137/2013-14 dated 30.12.2015 for AY 2008- 09. The assessment was framed by the Deputy Commissioner of Income Tax, Central Circle 36, Mumbai for AY 2008-09 vide order dated 28.03.2013 on the grounds mentioned herein below: -
“1. On the facts and in the circumstances of the case and in law the learned CIT(A)-53, Mumbai erred in part confirming the disallowance made by the Dy. CIT, Central Circle-5(3) (before reorganization formerly it was Dy. CIT C.C. 36),
Mumbai to the extent of Rs.6,95,339/- (out of Rs.17,32,644/-) under provisions of Sec.14A r.w.r. 8D of the Rules, 1962.
2. On the facts and in the circumstances of the case and in law the learned CIT(A)-53, Mumbai erred in computing the disallowance under Rule 8D(2)(iii) on the basis of gross interest of Rs.57,88,919/- instead of the actual expenditure by way of interest expenditure & brokerage amounting to Rs.7,52,609/- (gross interest expenditure + brokerage less interest receipts).”
Brief facts of the case are that the assessee is a partner and beneficiary in various concerns of Sumer Group. The assessee filed its original return of income on 29.12.2008 declaring total income of ₹ 6,53,500/-. A search and seizure operation was carried out under section 132 of the Act in Summer Group of cases including the appellant on 23.12.2010. Pursuant to the search action, notice under section 153A was issued and served on the appellant determining the total income of the appellant at ₹ 24,13,872/- after making disallowance under section 14A.
Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A). Ld. CIT(A) after considering the case of both the parties partly allowed the appeal filed by the assessee thereby restricting the disallowance of Rs. 6,95,339/-.
Aggrieved by the order of Ld. CIT(A), the assessee filed the present appeal before us on the grounds mentioned hereinabove.
At the very outset, the Ld. AR appearing on behalf of the assessee filed an application for raising additional grounds vide letter dated 24-11- 2017 and the same is reproduced below: -
“It is submitted that, in the facts and the circumstances of the case, and in law, no disallowance u/s. 14A of the Income - tax Act, 1961 ["the Act"] could have been made in assessment u/s. 153A read with section 143 (3) of the Act:
(a) On account of the very same addition already having made in earlier assessment order passed u/s. 143 (3); and (b) On account of absence of any incriminating material relating thereto.”
Vide application dated 21.11.17, assessee seeks admission of appeal on the ground mentioned in the application.
On the other hand, the Ld. DR refuted the claim of the assessee and submitted that no such ground was raised by the assessee before Ld. CIT(A).
We have heard the Counsels for both the parties on this application and after perusal of the contents of application dated 24-11-2017, we find that the ground raised by way of additional ground of appeal by the assessee is purely legal question of law. Apart from above, it is also submitted that the facts relevant for arguing the additional grounds are already in record and therefore, entertaining these additional grounds will not require investigation into any new or fresh facts.
Therefore, while keeping in view the principles laid down by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT 229 ITR 383 (SC), Jute Corporation of India Vs. CIT 187 ITR 688 (SC), Ahemdabad Electrical Vrs. CIT 199 ITR 351, wherein it has been held that the legal grounds, which goes to the roots of the case can be raised and allowed at any time /stage. Therefore, keeping in view the principles in mind, we allow the assessee to raise the additional grounds of appeal. Hence, the application dated 24-11-2017 is allowed and the additional grounds raised by the assessee are admitted.
7. On the perusal of the impugned order, we find that no such grounds were raised before Ld. CIT(A) and hence Ld. CIT(A) has not recorded any findings. Therefore considering the principle of natural justice, we remand the matter back to the file of Ld. CIT(A) for fresh adjudication of new /additional grounds raised before us. It is needless here to mention that before passing the order, the Ld. CIT(A) shall provide sufficient opportunity of hearing to the assessee. Before parting, we may make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.
In the result, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 12-01-2018.