BRITANNIA INDUSTRIES LTD.,KOLKATA vs. DCIT, CIR-7(1), KOLKATA, KOLKATA

At the outset, it is noted that there is a delay of 9 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, the Authorized Representative of the assessee-Company has moved an application seeking condonation of the said delay and keeping in view the ./2015 Assessment year: 2008-2009 Page 2 of 3 reasons given therein, we are satisfied that there was a sufficient cause for the delay on the part of the assessee in filing this appeal before the Tribunal. We, therefore, condone the said delay and proceed to dispose of the appeal of the assessee on merit.

The assessee in the present case is a Company, which is engaged in the business of manufacturing and sale of biscuits and other confectionary. In the assessment originally completed for the year under consideration vide an order dated 24.12.2010 passed under section 143(3), the total income of the assessee was determined by the Assessing Officer at Rs.98,84,67,140/-. On examination of the records of the said assessment, the ld. CIT found that the disallowance of expenses in relation to the earning of exempt income as required by the provisions of section 14A was not computed by the Assessing Officer by applying Rule 8D of Income Tax Rules and the assessment order passed under section 143(3) thus was erroneous as well as prejudicial to the interest of the Revenue. He, therefore, revised the said order by exercising the powers conferred upon him under section 263 with a direction to the Assessing Officer to compute the disallowance to be made under section 14A as per Rule 8D of Income Tax Rules. As per the direction of the ld. CIT, the Assessing Officer passed a fresh assessment order under section 143(3) read with section 263 on 20.03.2014 making a further disallowance of Rs.2,00,09,437/- under section 14A read with Rule 8D. Against the said order of the Assessing Officer, an appeal was preferred by the assessee before the ld. CIT(Appeals) and after considering the submissions made by the assessee as well as the material available on record, the ld. CIT(Appeals) restricted the disallowance made by the Assessing Officer under section 14A read with Rule 8D to Rs.85,04,464/-. Still aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. counsel for ./2015 Assessment year: 2008-2009 Page 3 of 3 the assessee, an appeal was preferred by the assessee before the Tribunal against the order passed by the concerned ld. CIT under section 263 directing the Assessing Officer to make a further disallowance under section 14A by applying Rule 8D and the Tribunal vide its order dated 02.03.2016 passed in has quashed the order passed by the ld. CIT under section 263 thereby allowing the appeal of the assessee. Consequently the order passed by the Assessing Officer under section 143(3) read with section 263 making a further disallowance under section 14A has become non-est in the eyes of law and the impugned order of the ld. CIT(Appeals) upholding partly the said order is liable to be cancelled. We order accordingly and allow this appeal of the assessee.