QUESTNET ENTERPRISES INDIA PVT LTD.,CHENNAI vs. ITO CORPORATE WARD 5(3), CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -3, Chennai, dated 29.09.2017 and pertains to assessment year 2014-15.

The assessee has raised two issues in this appeal. The first issue raised is with regard to differential duty and interest on differential duty to the extent of ₹ 21,42,227/- and the second issue is with regard to disallowance made under Section 14A of the Income-tax Act, 1961 (in short 'the Act').

Shri G. Seetharaman, the Ld. representative for the assessee, submitted that the customs duty was paid to the Customs Department by way of demand draft. Moreover, there was no investment during the year under consideration. The Ld. representative placed his reliance on the order of this Tribunal in the assessee's own case in and submitted that earlier these issues were remitted back to the file of the Assessing Officer.

We heard Shri B. Sahadevan, the Ld. Departmental Representative also. With regard to expenditure made on the payment of differential duty, this Tribunal is of the considered opinion that the matter can be examined by the Assessing Officer on the basis of the receipt issued by the Customs Department for payment of customs duty. Even otherwise, the Assessing Officer can get the details of payment from the Customs authorities.

With regard to the disallowance made under Section 14A of the Act, the assessee claims that there was no investment during the year under consideration and there was no expenditure in respect of the dividend income. The fact remains that the assessee has received dividend income, therefore, the expenditure has to be computed under Rule 8D of the Income-tax Rules, 1962. Therefore, the disallowance under Section 14A of the Act is also remitted back to the file of the Assessing Officer for re-examination.

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