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Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU : JM
The Revenue has filed this Appeal against the impugned Order dated 07.2.2014 passed by the Ld. CIT(A)-XVIII, New Delhi relevant to assessment year 2008-09.
The grounds raised in the Revenue’s Appeal read as under:-
“1. On the fact and in the circumstances of the case, the Ld. CIT(A) has erred in remitting the matter regarding disallowance of 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 to the file of AO for verification and at the same time also expressing that the disallowance should be restricted to Rs. 3,49,56,059/- as contended by the assessee.
2. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing.
3 The brief facts of the case are that the return of income was filed on 30.9.2008 declaring total loss of Rs. 1,02,59,853/-. The return was selected for scrutiny under CASS and accordingly, statutory notices were issued and duly complied with. In response to the notice, the AR of the assessee company attended the assessment proceedings on behalf of the assessee and furnished the details in support of return filed by the assessee as well as in response to queries raised during the assessment proceedings. The assessee company is engaged in the business of Trading in IT Products & IT services which were examined by the AO and AO observed that assessee company had investments, income from which does not or shall not form part of total income and made the addition of Rs. 3,29,57,253/- u/s. 14A of the I.T. Act, 1961 read with Rule 8D of Income Tax Rules and added back the same to the total income of the assessee. The AO passed the assessment order u/s. 143(3) of the I.T. Act,1961 and assessed the income at Rs. 2,84,06,589/-.
Against the said order of the AO, assessee appealed before the Ld. CIT(A), who vide his impugned Order dated 07.2.2014 has partly allowed the appeal of the assessee.
Aggrieved with the aforesaid order of the Ld. CIT(A), Revenue is in appeal.
Ld. DR relied upon the Order of the AO and reiterated the contentions raised in the grounds of appeal and stated that the Ld.CIT(A) has wrongly remitted the issue in dispute to the file of the AO.
7. On the contrary, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A).
We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities. We find that Ld. CIT(A) has elaborately discussed the issue in dispute in vide para no. 9.1 to 9.2 at page no. 32-33 in his impugned order dated 07.2.2014 which reads as under:-
“9.1 I have gone through the finding of the AO and submissions filed by Learned Authorized Representative of the appellant and I found that there is substance in argument of the Learned Authorised Representative of the appellant that disallowance should be restricted to Rs. 3,49,56,059/- under section 14A r.w.r. 8D. The Assessing Officer is directed to verify the claim and allow it after proper verification. In this regard, reliance is placed on the judgment of Hon’ble Income Tax Appellate Tribunal, Delhi, in the case of TSL Defense Technologies Pvt. Ltd. in wherein vide para 12 of the order, Hon’ble ITAT has held as under:-
Upon careful consideration, we find that Ld. Commissioner of Income Tax (Appeals) has remitted the matter to the files of the AO to examine the issue afresh by referring to the books of account to be produced by the assessee. In our considered opinion, the Revenue’s interest is fully protected in this regard as the AO has been granted permission to examine the books of accounts afresh. Accordingly, we do not find any infirmity or illegality in the order of the Ld. Commissioner of Income Tax (Appeals) on this issue. Hence, we uphold the same.
9.2 In view of the reliance on the above mentioned judgment, Assessing Officer is directed to verify the claim and allow. For this limited purpose, matter is remitted back to the file of Assessing Officer. Grounds of appeal Nos. 5 to 7 are partly allowed.”
8.1 On perusing the above finding of the ld. CIT(A), we find that Ld. CIT(A) has rightly observed that there is substance in argument of the Learned Authorised Representative of the assessee that disallowance should be restricted to Rs. 3,49,56,059/- under section 14A r.w.r. 8D. Hence, Ld. CIT(A) has rightly directed the Assessing Officer to verify the claim and allow it after proper verification by placing the reliance of the decision of Income Tax Appellate Tribunal, Delhi, in the case of TSL Defense Technologies Pvt. Ltd. in wherein vide para 12 of the order, ITAT has held as under:-
Upon careful consideration, we find that Ld. Commissioner of Income Tax (Appeals) has remitted the matter to the files of the AO to examine the issue afresh by referring to the books of account to be produced by the assessee. In our considered opinion, the Revenue’s interest is fully protected in this regard as the AO has been granted permission to examine the books of accounts afresh. Accordingly, we do not find any infirmity or illegality in the order of the Ld.
Commissioner of Income Tax (Appeals) on this issue. Hence, we uphold the same.
8.2 In view of the reliance on the above mentioned decision, we do not find any infirmity in the action of the Ld. CIT(A) in directing the Assessing Officer to verify the claim and allow and for this limited purpose, matter was remitted back to the file of Assessing Officer, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and accordingly, dismiss the ground raised by the Revenue in its Appeal.
In the result, the Appeal filed by the Revenue stands dismissed. Order pronounced in the Open Court on 17/04/2017.