GANGADHAR NARSINGDAS AGRAWAL,MARGAO vs. INCOME TAX OFFICER, WARD - 2, , MARGAO

This appeal by the assessee is directed against the order 14-09-2018 passed by the CIT(A)-1, Panaji in relation to the assessment years 2012-13.

The only issue raised in this appeal is against the enhancement of addition by Rs.34,33,048/- u/s.14A read with Rule 8D(2)(iii) of the Act.

We have heard the rival submissions and gone through the relevant material on record. It is seen that the ld. CIT(A) has recorded on page 18 onwards of his order that disallowance u/s.14A read with Rule 8D(2)(iii) was liable to be enhanced by sum of Rs.34,33,048/-. He tabulated the direct expenses and administrative expenses forming part of the Profit and loss account to reach the conclusion that the disallowance was to be enhanced by Rs.34,33,048/-. The ld. AR submitted that the expenses taken out by the ld. CIT(A) for enhancing the addition were directly in relation to the taxable income and hence, could not have been so considered for the purposes of making disallowance u/s.14A qua the exempt income. Without going into further details and in the absence of any discussion made by the ld. CIT(A) on this score, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this score is set-aside and the matter is remitted to the file of the ld. CIT(A). We order accordingly and direct him to decide this issue afresh as per law after allowing a reasonable opportunity of hearing to the assessee.

In the result, the appeal is allowed for statistical purposes. Order pronounced in the Open Court on 11th July, 2023.