KAILASH MOTORS,KANPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, RANGE- II, KANPUR

ITA 695/LKW/2017

AI Insights

The case involves multiple appeals filed by different appellants against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)] concerning disallowances made on interest expenses claimed for various assessment years. The primary legal issue was the disallowance of Rs.30,07,117/- out of interest expenses under section 14A of the Income Tax Act, which was later reclassified under section 36(1)(iii) by the CIT(A). The appellants contested this reclassification and the associated disallowance, leading to the appeals. The Income Tax Appellate Tribunal (ITAT) decided to restore the matter back to the CIT(A) for a de novo hearing, emphasizing the need for a fair opportunity for the appellants to present their case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360546 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KUMAR
• Assessee Lawyers: RAKESH GARG
• Keywords: Set aside
• Section: 14A

Judgement Text

"I.T.A. No.237/Lkw/2017 etc. 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER I.T.(SS)A. Nos.237, 238 & 239/Lkw/2017 Assessment Years:2010-11, 11-12 & 12-13 Danish Khan, 536/265/3/7, Madheyganj, Thana Hasanganj, Lucknow. PAN:BGEPK5770N Vs. Dy.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) I.T.(SS)A. Nos.240, 241 & 242/Lkw/2017 Assessment Years:2010-11, 11-12 & 12-13 Rahat Ejaz Siddiqui, 536/265/3/7, Madheyganj, Thana Hasanganj, Lucknow. PAN:DELPS9491R Vs. Dy.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) I.T.(SS)A. Nos.243 & 244/Lkw/2017 Assessment Years:2011-12 & 12-13 Shafaat Ejaz Siddiqui, 536/222, Madheyganj, Khadra Thana Hasanganj, Lucknow. PAN:DEMPS0142L Vs. Dy.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) I.T.(SS)A. Nos.245 & 246/Lkw/2017 Assessment Years:2011-12 & 12-13 I.T.A. No.237/Lkw/2017 etc. 2 Tabish Mansoor 536/265/3/7, Madheyganj, Sitapur Road, Lucknow. PAN:AXQPM2842P Vs. Dy.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) I.T.(SS)A. Nos.255, 256 & 257/Lkw/2017 Assessment Years:2010-11, 11-12 & 12-13 Danish Khan, 536/265/3/7, Madheyganj, Khadra Thana, Hasanganj, Lucknow. PAN:BGEPK5770N Vs. A.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) I.T.(SS)A. Nos.258, 259 & 260/Lkw/2017 Assessment Years:2010-11, 11-12 & 12-13 Rahat Ejaz Siddiqui, 536/222, Madheyganj, Khadra Thana, Hasanganj, Lucknow. PAN:DELPS9491R Vs. A.C.I.T., Central Circle-1, Lucknow. (Appellant) (Respondent) O R D E R PER BENCH: These appeals have been filed by the assessee against the impugned appellate orders of learned Commissioner of Income Tax (Appeals) Appellant by Shri Rakesh Garg, Advocate Respondent by Shri Amit Kumar, D.R. I.T.A. No.237/Lkw/2017 etc. 3 [“CIT(A)” for short] dated 03/10/2016 for assessment year 2006-07, dated 03/10/2016 for assessment year 2012-13 and dated 14/08/2017 for assessment year 2013-14 respectively. 2. First we will take up appeal in I.T.A. No.15/Lkw/2017 for assessment year 2006-07. The only issue in dispute in this appeal is regarding the disallowance amounting to Rs.30,07,117/- out of interest expenses claimed by the assessee. The Assessing Officer, in the assessment order dated 27/02/2015 passed u/s 143(3)/254 of the I. T. Act, made the aforesaid disallowance u/s 14A of the Act. Being aggrieved, the assessee preferred appeal before the learned CIT(A). The assessee’s appeal against the aforesaid disallowance of Rs.30,07,117/- out of interest expenses claimed, was dismissed by the learned CIT(A) who upheld the aforesaid disallowance. However, the learned CIT(A) opined that the aforesaid disallowance was to be made u/s 36(1)(iii) and not u/s 14A of the Act. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 03/10/2016 of the learned CIT(A). 3. At the time of hearing before us, learned Counsel for the assessee submitted that the learned CIT(A) invoked the provisions of section 36(1)(iii) of the Act without giving opportunity to the assessee, as far as applicability of section 36(1)(iii) was concerned. He submitted that the issue regarding aforesaid disallowance of Rs.30,07,117/- should be set aside to the file of the learned CIT(A) with the direction to pass de novo order in accordance with law after providing reasonable opportunity to the assessee. The learned Departmental Representative for Revenue expressed no objection to this. In view of the foregoing, as representatives of both sides are in agreement on this, the disallowance of Rs.30,07,117/- is restored back to the file of the CIT(A) with the direction to pas de novo order in accordance with law after providing reasonable opportunity to the assessee. 4. On merits, facts of I.T.A. No.16/Lkw/2017 and I.T.A. No.695/Lkw/2017 are also similar to facts of appeal vide I.T.A. No.15/Lkw/2017. Facts being similar in pari materia, these two appeals vide I.T.A. No.16/Lkw/2017 and I.T.A. No.695/Lkw/2017 also deserve to be restored back to the file of the CIT(A) as the same reasoning would apply mutatis mutandis in these two appeals, as in I.T.A. No.15/Lkw/2017. In view of the foregoing, the appeal vide I.T.A. No.16/Lkw/2017 and I.T.A. No.695/Lkw/2017 are also is restored back to the file of the CIT(A) with the direction to pass de novo order in accordance with law after providing reasonable opportunity to the assessee. I.T.A. No.237/Lkw/2017 etc. 4 5. In the result, all the appeals of the assessee are allowed for statistical purposes. (Order pronounced in the open court on 23/05/2025) Sd/. Sd/. (ANADEE NATH MISSHRA) (SUBHASH MALGURIA) Accountant Member Judicial Member Dated:23/05/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow "