2016 (6) TMI 881 - AT - Income Tax

Disallowance u/s 14A - CIT (A) has deleted the disallowance on the ground that it has been held by the coordinate Bench in assessee s own case pertaining to A.Y. 2002-03 that provisions of section 14A are not applicable - Held that - Since the facts are identical in the year under appeal also, the contention of the assessee throughout has been that the investment wherefrom it has earned exempt income were made for the purpose of maintaining the controlling interest. Therefore, in view of the decision of the Tribunal, provisions of section 14A would not be applicable. The coordinate Bench in assessee s own case in the assessment year 2002-03 had deleted the addition on the basis that provisions of section 14A would not be applicable in the case of the assessee as the investment has been made solely for the purpose of having the controlling interest. There is no change into the facts in this year as well. - Decided in favour of assessee Addition on account of expenses claimed against income received from the BCCI - Held that - We find that ld. CIT (A) has deleted the disallowance merely on the basis of presumption that the assessee might have incurred certain expenditure. In our considered view, this approach of ld. CIT (A) is not justified. Since the assessee himself has claimed certain income earned from other sources and claimed set off of expenditure incurred for earning such income, it was incumbent upon the assessee to furnish supporting evidence qua its claim for expenditure. Therefore, on this issue, we hereby set aside the order of ld.CIT (A) and sustain the disallowance made by the AO - Decided in favour of revenue

Summary

Issues Involved:
- Disallowance under section 14A of the Income Tax Act for assessment years 2008-09 and 09-10
- Deletion of expenses claimed against income received from BCCI

Analysis:

Issue 1: Disallowance under section 14A of the Income Tax Act
- The appeals filed by the Revenue for assessment years 2008-09 and 09-10 were against the orders passed by the ld. CIT (Appeals) in Jaipur.
- The Revenue raised grounds related to the disallowance of certain amounts under section 14A of the Income Tax Act.
- The AO disallowed amounts under section 14A and Rule 8D of the IT Rules, which was challenged by the assessee before the ld. CIT (A).
- The ld. CIT (A) deleted the disallowances based on the argument that the investments were made for maintaining controlling interest, rendering section 14A inapplicable.
- The Tribunal upheld the decision of the ld. CIT (A) citing previous rulings and lack of contrary binding precedent brought by the Revenue.
- The Tribunal found no reason to interfere with the order of the ld. CIT (A) and upheld the deletion of disallowances.

Issue 2: Deletion of expenses claimed against income received from BCCI
- The second ground of appeal was against the deletion of expenses claimed against income received from BCCI.
- The ld. CIT (A) deleted the disallowance of expenses based on the presumption that the assessee might have incurred certain expenditure.
- The Tribunal, however, found this approach unjustified as the assessee failed to provide supporting evidence for the claimed expenditure.
- Consequently, the Tribunal set aside the order of the ld. CIT (A) and sustained the disallowance made by the AO, allowing this ground of the Revenue's appeal.

Conclusion:
- The Tribunal partly allowed the appeal for assessment year 2008-09 and dismissed the appeal for assessment year 2009-10.
- The decision was based on the application of section 14A, the relevance of supporting evidence for claimed expenses, and the specific circumstances of each assessment year.
- The orders were pronounced on 13/06/2016 by Shri Kul Bharat, JM, and Shri Vikram Singh Yadav, AM.