ALLIED MULTIVISION PVT. LTD.,KOLKATA vs. ITO, WD-1(4), KOLKATA, KOLKATA

The assessee in the present case is an Investment Company, which filed its return of income for the year under consideration on 26.09.2012 declaring total income of Rs.15,23,821/-. In the Profit & Loss Account filed along with the said return, a sum of Rs.4,65,000/- was debited by the assessee under the head “Depreciation/Amortization expenses”. On the perusal of relevant details furnished by the assessee, the Assessing

Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging both the additions made by the Assessing Officer to its total income. During the course of appellate proceedings before the ld. CIT(Appeals), there was, however, no compliance on the part of the assessee to the notices issued by the ld. CIT(Appeals) fixing the said appeal for hearing from time to time. The ld. CIT(Appeals), therefore, proceeded to dismiss the appeal filed by the assessee vide his appellate order dated 16.03.2017 passed ex-parte.

Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal on the following grounds:- “(1) That the ld. CIT(Appeals)-9, Kolkata has erred in confirming the double addition made by the ld. Assessing Officer on account of amalgamation expenses amounting to Rs.4,65,000/- which were already disallowed by the appellant in the computation of taxable income for the assessment year 2012-13 without going in the details as submitted with required evidences and explanations even waiting for the submission of remand report by Assessing Officer.

I have heard the arguments of both the sides and also perused the relevant material available on record. At the time of hearing before the Tribunal, the ld. Counsel for the assessee has not pressed Ground No. 1 raised in the appeal of the assessee. The same is accordingly dismissed as not pressed.

As regards the issue raised in Ground No. 2 relating to the disallowance under section 14A, the limited contention raised by the ld. Counsel for the assessee is that there being no exempt dividend income earned by the assessee-company during the year under consideration, no disallowance under section 14A can be made as held by the Hon’ble Calcutta High Court in the case of REI Agro Limited in G.A. No. 3581 of 2013 dated 09.04.2014 (ITAT No. 220 of 2013). Although the ld. D.R. has relied on the CBDT Circular clarifying that disallowance under section 14A can be made even when there is no exempt dividend income earned by the assessee, I find that the said Circular is contrary to the decision of Hon’ble Jurisdictional High Court in the case of REI Agro Limited (supra), which is binding on the Tribunal. The ld. D.R. has also contended that there is no clear finding given either in the assessment order or even in the appellate order of the ld. CIT(Appeals) that no income from dividend, which is exempt from tax, was earned by the assessee during the year under consideration. In my opinion, this aspect requires verification by the Assessing Officer. Accordingly, I set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for verifying the claim of the assessee of having not earned any exempt dividend income during the year under consideration

In the result, the appeal of the assessee is tre ated as partly allowed for statistical purposes. Order pronounced in the open Court on June 13, 2018.