SREEDHANYA CONSTRUCTION COMPANY,TRIVANDRUM vs. DCIT CIRCLE 1(1), TRIVANDRUM

It emerges during the course of hearing that the sole substantive issue which arises for our apt adjudication is that of correctness of both the learned lower authorities action making sec.14A read with Rule 8D disallowance of Rs.33,85,972/- which represents the interest expenditure claim on account of alleged diversion of funds for non-business purposes.

Learned CIT-DR invited our attention to the assessment findings dated 12.12.2022; in furtherance to sec.263 revision directions, that the Assessing Officer has duly examined the assessee’s case before arriving at the disallowance(s) figure forming subject matter of adjudication in the instant appeal.

Faced with this situation, learned invited our attention to the assessee’s stand adopted throughout and more particularly, in page-2 of the assessment order, terming his source of investments to the specified bank account(s) maintained with the Federal Bank and South Indian Bank only. Learned counsel further explains before us that it was only the corresponding “CC” limits in the said bank account(s) as well as it’s Managing Partners introduction of capital after disposing off

Faced with this situation, we are of the considered opinion that the instant assessee’s sole substantive grievance requires the Assessing Officer’s fresh factual verification once both the learned lower authorities having rebutted the assessee’s categoric explanation terming the source of investments to the foregoing twin heads. The Assessing Officer is directed to decide the issue afresh after giving three effective opportunities of hearing to the assessee subject to the rider that it is the assessee’s sole risk and responsibility to plead and prove his case with all relevant documents in consequential proceedings. Ordered accordingly.

This assessee’s appeal is allowed for statistical purposes in above terms.