SH. R.N. SAHNI,NEW DELHI vs. ADDL. CIT, NEW DELHI

The only ground raised by the assessee in this appeal reads as under:-

We have heard the arguments of both the sides and perused the material placed before us. We find that the Assessing Officer disallowed the interest of `16,56,886/- on the ground that the borrowed money has been utilized for investment in the shares of M/s Alps Hotels Pvt.Ltd. In our opinion, in such circumstances, the 2 ITA-496/Del/2014 disallowance, if any, should have been considered as per provision of Section 14A. The Assessing Officer has not at all applied Section 14A. It was also claimed by the assessee that no dividend income was received and, therefore, on application of Section 14A, there would be no disallowance in view of the decision of Hon'ble Delhi High Court in the case of Cheminvest Limited Vs. CIT-VI in order dated 2nd September, 2015 and CIT-IV Vs. Holcim India P.Ltd. in ITA No.486/2014 & 299/2014, order dated 5th September, 2014. In our opinion, the entire matter needs re-examination from the angle of Section 14A. We, therefore, set aside the orders of authorities below and restore the matter to the file of the Assessing Officer and direct him to re-examine the issue from the perspective of Section 14A and make the disallowance in accordance with law, if any. Needless to mention that he will allow adequate opportunity of being heard to the assessee.

In the result, the appeal of the assessee is deemed to be allowed for statistical purposes. Decision pronounced in the open Court on 27.05.2016.