Anant Overseas P.Ltd, New Delhi V. ACIT, Central circle-27, New Delhi

ITA 6585/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2601 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-09-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 07-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Proportionate interest; TDS; Rule 8D
• Section: 143(3); 14A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA No. 6585/Del/2019 Assessment Year: 2010-11 Anant Overseas P. Ltd., 305, 3 rd Floor, Bhanot Corner Pamposh Enclave, Gr. Kailash-I, New Delhi PAN: AAACA0234B VersuS ACIT, Central Circle-27, New Delhi (Appellant) (Respondent) Appellant by: Sh. M.P. Rastogi, Ld. Adv. Sh. Rajeev Kumar, Ld. CA Respondent by : Sh. R.K. Gupta, Ld. CIT/DR Date of hearing : 28.09.2022 Date of order : 04.10.2022 ORDER PER N.K. CHOUDHRY, J.M. This appeal has been preferred by the Assessee against the order dated 30.07.2019, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-31, New Delhi (in short “Ld. Commissioner”), u/s. 250 of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2010-11. [Type the document title] 2 2. The brief facts, relevant for adjudication of the instant appeal, are that the Assessing Officer vide order dated 04.01.2013u/s 143(3) of the Act, completed the assessment, by assessing total loss at Rs. 1,36,59,562/- as against the returned loss of Rs. 4,01,53,861/-and making addition of Rs. 2,64,94,305/- on account disallowance u/s 14A of the Act of. 3. Being aggrieved with the aforesaid assessment order, the Assessee filed an appeal before the ld. Commissioner, who vide order dated 4.10.2013 in Appeal No. 68/12- 13/CIT(A)- III, restricted the disallowance at Rs. 12,589/- as against the disallowance of Rs. 1,70,087/- made by the Assessing Officer u/r. 8D(2)(iii) of the Income Tax Rules 1962 (is short ‘the rules’) . 4. The Revenue Department preferred an appeal before the Hon'ble ITAT against the order of the Ld. CIT(A) and the coordinate Bench of this Tribunal vide order dated 16.06.2017 in ITA No. 59/DEL/2014 remanded the case back to the file of Assessing Officer for recalculation of disallowance u/r 8- D(2)(iii) of the Rules. The Coordinate bench also directed the Assessing Officer to consider the interest received on loans amounting to Rs. 1,85,73,040/- after giving relief of Rs.99,505/- spent towards circulation charged, ROC filing fee, secretarial audit expenses of CA and TDS filing fee etc. as held by the Ld. CIT(A). 5. The Assessee being aggrieved, filed an application u/s. 254 of the Act before the Tribunal to rectify the order dated [Type the document title] 3 16.06.2017, stating that the ld. CIT(A) has nowhere observed that that the Assessee has himself disallowed Rs. 58,693/- u/s 14A of the Act and that the issue of netting of interest, the ld. Commissioner had already dealt with the disallowance of proportionate interest of Rs. 2,63,23,518/- based on utilization of borrowed funds and never discussed about the netting of interest received of Rs. 1,85,73,040/- while deleting the disallowances of Rs. 2,63,00,285/-. 5.1 In the meantime, the Assessing Officer initiated the assessment proceedings in compliance to the Tribunal’s remand order 16.06.2017, during which the Assessee requested to keep the proceedings in abeyance till the disposal of Misc. Application filed by it before the ITAT. The Assessing Officer did not accept the said request of the Assessee and vide assessment order dated 23.12.2018 made disallowance of Rs.1,74,89,193/- u/s. 14A of the Act and accordingly determined the loss of Rs.2,26,64,673/- as against Rs.4,01,53,867/- declared by the Assessee. 6. Being aggrieved, the Assessee preferred first appeal against the said assessment order dated 23.12.2018 before the ld. Commissioner, who vide impugned order affirmed the disallowance made by the Assessing Officer on the ground that the Assessing Officer had simply given the effect to the directions of the Hon’ble ITAT and thus, there is no error on the part of the Assessing Officer in giving effect to the order and directions of the Hon’ble ITAT. [Type the document title] 4 7. Aggrieved by the impugned order, the Assessee is in appeal before us, mainly on the ground that the lower authorities are wrong on facts and bad in law in disallowing the proportionate interest of Rs.1,74,76,604/- u/s. 14A read with Rule 8-D of the Rules. 8. Heard both the parties and perused the material available on record. A perusal of the record reveals that the Tribunal vide order dated 02.02.2021 in MA No. 453/Del/2017 allowed the Misc. Application (supra) filed by the Assessee, by recalling the Tribunal’s dated 16.06.2017 whereby the case was remanded to the file of the Assessing Officer and thereafter the Tribunal by passing fresh order dated 08.02.2022 remitted the issue under consideration, to the file of AO by holding as under: “5. The appropriate way to determine the disallowance is to compute in accordance with the provisions of Rule 8D(2) applicable for the relevant assessment year. Finance Act, 2006 revamped section 14A inserting sub-section (2) and (3) to section 14A with effect from 01.04.2007 thereby enabling to notify the method to compute the amount of disallowance under section 14A. It also provided the methodology for computing the disallowance under section 14A. We also hold that in any case, the disallowance out of administrative expenses cannot exceed the expenses claimed in the P&L account. With regard to the interest, the Assessing Officer is hereby directed to take into account the entire funds available with the assessee to determine the quantum of interest bearing, non-interest bearing own funds and recomputed the disallowance as per Rule 8D(2).” [Type the document title] 5 9. In view of the aforesaid series of facts, as on today the Assessment order against which the impugned order was passed, is not in existence, by efflux of order dated 08.02.2022 of the Tribunal. Consequently, the appeal of the Assessee is liable to be dismissed as infructuous. 10. In the result, the appeal filed by the Assessee is dismissed as infructuous. Order pronounced in the open court on 04/10/2022 Sd/- Sd/- (ANIL CHATURVEDI) (N.K. CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Assistant Registrar ITAT New Delhi