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TMI Blog2012 (7) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... ined this issue – matter remanded to AO - ITA No.6548/M/2009 - - - Dated:- 30-5-2012 - SHRI B. RAMAKOTAIAH, SHRI S.S. GODARA, JJ. Appellant by : Shri Sandesh Desai Respondent by: Shri V. V. Shastri O R D E R PER S.S. GODARA, J.M: The assessee has preferred the instant appeal against the order dated 3.8.2009 passed by the Ld. CIT (A)-XXI, Mumbai. 2. In the present appeal, total three grounds have been raised by the assessee. Ground No.1 is regarding applicability of Rule 8D of the income Tax Rules qua the disallowance of expenditure alleged to have been incurred by the assessee in earning exempted income. Similarly, ground no.2 impugns the Ld. CIT (A) order qua addition of rental deposit as income. Ground no.3 is regarding proportionate interest. 3. At the same time, during the pendency of appeal, on 24.3.2011 the assessee has filed an application seeking permission to leave additional evidence to place on record confirmation letters, copies of rent agreements, lease deed. Per assessee the application in hand seeking permission to lead evidence is liable to be accepted for just and appropriate adjudication of the case. Along with the application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no expenditure had been incurred in earning the said income. 10. The Assessing Officer did not accept the assessee s contention. Determined the expenditure incurred for earning exempt income @ 2% of the total income under the said head. Accordingly, made disallowance of Rs. 2,81,867/- by observing in the assessment order dated 17.3.2005, that the assessee had incurred certain interest amount, salaries over head expenses. 11. In appeal, the Ld. CIT (A) has directed the AO to recompute the expenses incurred in earning the exempt income in view of ITAT Mumbai (SB) decision in the case of ITO vs. Daga Capital Management (26 SOT 603). Remitted the matter back to the AO to recompute the expenditure under Rule 8D. Hence the assessee is before us. 12. In support of the ground raised, the Ld. AR submitted that the Ld. CIT (A) has erred in directing the AO to recompute the expenses in question by following Rule 8D which is only applicable w.e.f. AY 2008-09. Not applicable to cases of AY 2003-04. In this regard he relied on Godrej Boyce case 234 CTR 1 (Bombay High Court). 13. On merits, learned AR has vehemently contended that neither the AO not the Ld. CIT (A) has considered the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown this income of Rs. 13,07,740/- on account of deposit in the return of income for the year in question. The action of showing this income resulted from the write off of this amount as being payable to Ballarpur Industries Ltd. The return of income which showed this income was sought to be superceded by revised computation, which the AO has not considered. The return of income stands on part with sworn statement. The same can be superceded only by filing a revised return. In any case, it is difficult to understand the situation where within the same year, an amount which was considered as good enough for write back is once again brought back into the book, though the same was outstanding since 1992. The AO has therefore, rightly gone with the return of income and not considered the revised computation filed during the assessment proceedings. This is precisely the reason that the issue itself does not figure in the assessment order. The appellant has, of its volition, offered this amount for tax. No good reason has been cited to retract the fact that this amount was worthy of write off, as there is nothing to prove that the lessee has pressed for recovery after the amount has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged by the Hon ble Supreme Court judgment in the case of Goetz India Ltd. Hence, prayed for acceptance of the appeal. 26. On the other hand, learned DR has relied on the impugned order. Prayed for rejection of the ground. 27. We have heard both the learned representatives. Also perused the paper book including additional evidence allowed hereinabove. Undisputedly, neither the AO nor Ld. CIT (A) has doubted the amount of Rs. 13,07,740/- as interest from the security deposit payable back to the lessee at the time of termination of lease agreement. Although in the return in hand, the assessee has included the amount as miscellaneous income. But immediately after realizing the mistake it also filed its revised computation. 28. In our opinion, once it is clear that the amount in question is interest free security deposit to be paid back, the same can never termed as income. If that is so, it does not come under the purview of charging provision as well. At the same time, as is clear from the record, the AO has also not examined this issue. Hence, finding it fit case to exercise our jurisdiction u/s 254 of the Act, we deem it appropriate that the AO shall re-examine the matter in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed, which necessitate filing of revised return of income by the appellant for AY 2002-03, making such claim. Such claim then has to be examined by the AO, where the direction for AY 2001-02 can at best have a persuasive value. In many cases, directions are issued by the CIT (A) or the appellate authorities and yet the AO continues to make similar additions to be deleted only by the appellate authorities. In all such cases, it cannot be taken to mean that the direction is applicable perennially for all the subsequent years. The appellant never filed the revised return of income and therefore, the AO did not have the opportunity to examine the claim. Such claim cannot be made by merely filing revised computation of income. The AO has rightly not considered the same. This ground of appeal is, accordingly, dismissed. Hence the assessee is aggrieved. 32. In support of the ground, learned AR has argued that issued in hand is squarely covered by the ITAT Mumbai order regarding AY 2001-02 ITA No.7738/M/2003 (order available at page 83 of the paper book). Relying on the same order, learned AR has for acceptance of the ground. 33. Learned DR appearing for revenue has relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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