WALCHANDNAGAR INDUSTRIES LTD,MUMBAI vs. DCIT CEN CIR 8(3), MUMBAI

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ITA 569/MUM/2015Status: DisposedITAT Mumbai05 October 2016AY 2010-113 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the file of the AO for fresh consideration. The AO was directed to determine if any expenditure was actually incurred for earning exempt income, considering the balance sheet figures and the assessee's claim of using own funds.

What were the facts?

The assessee company filed its return of income, which was selected for scrutiny. The Assessing Officer (AO) disallowed expenditure under Section 14A of the Income Tax Act. The assessee appealed this disallowance.

What were the issues?

Whether the disallowance under Section 14A was justified without proper consideration of the assessee's submissions and balance sheet figures regarding the source of investments.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENCH “G”, MUMBAI

Hearing: 05.10.2016

O R D E R PER PAWAN SINGH; 1. This appeal u/s. 253 of Income Tax Act (,Act’) is directed by the assessee against the order of Commissioner of Income Tax (Appeals)-38, Mumbai dated 18.09.2014 for Assessment Years (AY) 2010-11. The assessee has substantially raised only one ground of appeal

against the disallowance u/s. 14 A of the Act.

1.

2. The brief facts of the case are that assessee-company filed its return of income for relevant assessment year on 4th October 2010, declaring total income of Rs.26,02,10,825/-. The return of income was selected for scrutiny. While making assessment the AO besides other disallowance made the disallowance of expenditure under section 14A of the Act at Rs.18,93,178/-. Aggrieved by the order of AO the assessee filed appeal before first appellate authority wherein the disallowance was confirmed. Further aggrieved, the assessee filed this second appeal before this Tribunal.

3.

We have heard the ld AR of the assessee and the ld DR for the revenue and perused the material available on record. At the outset, it was submitted by the ld AR of the assessee that this ground of appeal

is squarely covered in favor of the assessee in assessee’s own case for earlier assessment year. The ld AR of the assessee placed on record the copy of order of the Tribunal in 2013 for AY 2009-10. The Learned DR for revenue has no objection if the similar order is passed and the matter is restored to the file of AO to reconsider the same in accordance with the order dated 21st of August 2014, passed in ITA No. 3826/M/2013.

4. We have seen the order of this Tribunal in ITA No. 3826/M/2013, wherein the similar grounds of appeal was s considered by the Coordinate Bench of this Tribunal wherein the following order was passed: “10. We have carefully perused the orders of the authorities below. We find force in the contention of learned counsel. The AO has not referred the balance-sheet figures of the assessee. The AO has also not given any finding whether the borrowed fund were also used for making the investments. The AO has also not considered the claim of assessee that the investments have been made out of own funds. In the interest of Justice, in our considered opinion, this issue needs to be re-adjudicated afresh. We, accordingly set-aside this issue to the file of AO. The AO is directed to show the assessee has actually incurred certain expenditure for earning the exempt income considering the facts and the figures of the balance-sheet of the assessee. The assessee is directed to file necessary details before the AO. Needless to mention, the AO shall give a reasonable and fair opportunity of being heard to the assessee. This ground of appeal is allowed for statistical purpose.”

5.

Thus adhering the principle of consistency and the order of the order of coordinate bench in assessee’s own case for earlier assessment year, we deem it appropriate to restore this ground of appeal

to the file of AO to reconsider it afresh and passed order in accordance with law considering the direction contained in order dated 21 August 2014 in ITA No. 3826/M/2013.

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