Shri.Ashok Kumar Dhingra, Bangalore V. Deputy Commissioner of Income-Tax, Bangalore

ITA 644/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5377 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.644/BANG/2017 ASSESSMENT YEAR : 2012-13 SHRI. ASHOK KUMAR DHINGRA, NO. 63, VERSOVA LAYOUT, C. V. RAMAN NAGAR, OFF OLD MADRAS ROAD, BENGALURU-560093. PAN : AACPD9875G VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4(3)(1), BENGALURU, APPELLANT RESPONDENT ASSESSEE BY : SHRI. MUKESH KUMAR JAIN, CA REVENUE BY : SMT. SWAPNA DAS, JCIT DATE OF HEARING : 16.5.2017 DATE OF PRONOUNCEMENT : 19.5.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF CIT(A), INTERALIA, ON THE FOLLOWING GROUNDS: ITA NO. 644/BANG/2017 PAGE 2 OF 5 2. THOUGH VARIOUS GROUNDS ARE RAISED IN THIS APPEAL BUT THE MAIN ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO DIS ALLOWANCE OF EXPENSES BY INVOKING THE PROVISIONS OF SECTION 14A OF THE IN COME TAX ACT. THE FACTS IN BRIEFS BORNE OUT FROM THE RECORD IS THAT T HE ASSESSEE HAS EARNED THE EXEMPTED INCOME FROM THE INVESTMENT IN SHARES. BUT HE HAS NOT ITA NO. 644/BANG/2017 PAGE 3 OF 5 OFFERED ANY DISALLOWANCE OF EXPENSES IN COMPUTATION OF ITS INCOME. THE AO HAS TAKEN NOTE OF THESE FACTS AND HE ACCORDI NGLY INVOKED RULE 8D OF THE INCOME TAX RULES AND COMPUTED THE DISALLO WANCE OF EXPENSES INCURRED IN EARNING THE EXEMPTED INCOME. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A), BUT HE DID NOT FIND FAVOUR WITH HIM. NOW THE ASSE SSEE IS BEFORE US AND DURING THE COURSE OF HEARING, HE INVITED OUR ATTENT ION TO THE COPY OF THE BALANCE SHEET FILED DURING THE COURSE OF HEARING OF THE APPEAL WITH THE SUBMISSION THAT THE ASSESSEE ITSELF HAS DISALLOWED RS.37,275/- ON ACCOUNT OF EXPENSES IN EARNING THE EXEMPTED INCOME. DURING THE COURSE OF HEARING THE SPECIFIC QUERY WAS RAISED AS TO WHETHER THESE DETAILS OF EXPENSES WERE FURNISHED BEFORE THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. BUT NO CONCRETE EVIDENCE H AS BEEN PLACED BEFORE US IN THIS REGARD. THOUGH THE ASSESSEE HAS EARNED SUBSTANTIAL AMOUNT OF EXEMPTED INCOME BUT IT IS NOT CLEAR AS TO WHETHER HE HAS DISALLOWED THE EXPENSES RELATING TO THE EARNING OF EXEMPTED INCOME. 4. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CON TENDED THAT BEFORE MAKING THE DISALLOWANCE BY INVOKING THE PROV ISIONS OF SECTION ITA NO. 644/BANG/2017 PAGE 4 OF 5 14A OF THE ACT AND COMPUTING DISALLOWANCE AS PER R ULE 8D, THE AO HAS NOT RECORDED HIS SATISFACTION WITH REGARD TO IN CORRECTNESS OF THE COMPUTATION OF THE INCOME OF THE ASSESSEE. IN THIS REGARD, WE HAVE CAREFULLY EXAMINED THE ASSESSMENT ORDER AND FIND TH AT THE AO HAS CATEGORICALLY RECORDED THAT THE ASSESSEE HAS NOT CO NSIDERED ANY AMOUNT FOR DISALLOWANCE UNDER SECTION 14A OF THE ACT THOUG H HE HAS EARNED AN EXEMPTED INCOME. NOW THE ASSESSEE HAS COME UP WITH A PLEA THAT HE HAS OFFERED DISALLOWANCE OF RS.37,275/- WHILE COMPU TING THE TOTAL INCOME BUT NO EVIDENCE IS PLACED IN THIS REGARD. I N THE LIGHT OF THE FACT, I AM OF THE VIEW THAT LET THE ISSUE BE EXAMINED AFR ESH BY THE AO. 5. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO RE ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE EXPLANATIONS AND DETAILS TO BE FURNISHED WITH REGARD TO DISALLOWANCE UNDER SECTION 14A OF THE ACT . IF AO IS NOT CONVINCED WITH THE DETAILS FURNISHED BY THE ASSESSE E, HE MAY RECORD A SATISFACTION WITH REGARD TO INCORRECTNESS OF THE CA LCULATIONS FURNISHED TO THE AO AND THEREAFTER PROCEED THE FRESH CALCULATION S FOR DISALLOWANCE AS PER RULE 8D OF THE RULES. OTHER GROUNDS RAISED IN THIS APPEAL ARE CONSEQUENTIAL IN NATURE AND NEEDS NO INDEPENDENT AD JUDICATION. ITA NO. 644/BANG/2017 PAGE 5 OF 5 ACCORDINGLY, THE MATTER IS RESTORED TO THE FILE OF THE AO TO READJUDICATE THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE. DATED: 19 TH MAY, 2017. /NSHYLU/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.