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TMI Blog2019 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in two years by the authority below, therefore, the same requires consideration at the level of the Ld. CIT(A). We, accordingly, set aside the orders of the authorities below and restore the additional ground to the file of Ld. CIT(A) with a direction to decide this additional ground as per law, by giving reasonable and sufficient opportunity of being heard to the assessee and A.O. in all the three years. Disallowance u/s 14A - HELD THAT:- We find from the impugned order that assessee has merely submitted before CIT(A) that he has not earned any substantive exempt income, on which, no finding of fact have been recorded by the CIT(A) as well. It is well settled law that if the assessee did not earn any exempt income, no disallowance under section 14A could be made. We rely upon the Judgment in the case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT]. No finding of fact have been recorded by the CIT(A) on the same. Therefore, this issue also requires re-consideration at the level of the CIT(A) - since we have admitted additional ground which is purely legal in nature and directed the CIT(A) to decide the same as per Law, therefore, the issue on merit shall have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of these facts, we decide the appeals of the Department and Cross Objections of the Assessee as under. ITA.No.3855/Del./2015 - A.Y. 2008-2009 : 4. The Department has raised the following effective grounds of appeals : 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 8,78,816/- made by the AO on account of unexplained advertisement expenses. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 72,85,822/- made by the AO u/s 14A r.w.r 8D of the I.T. Rules. (The AO had made an addition of ₹ 2,86,42,275/- u/s 14A r.w.r 8D of the I.T. Rules which was subsequently reduced u/s 154 of the I.T. Act to ₹ 72,85,822/-) . 5. The assessee has filed the cross objections on the following grounds : 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in upholding the disallowance of ₹ 26.86.438/- under section 14A read with rule 8D of the Income Tax Act Rules respectively. 2. That the Ld. CIT (A) erred in holding that some expenses are to be allocated in earning exempt income. 3. That the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 also deleted the addition made under section 14A of the I.T. Act, 1961. The appeal of assessee was accordingly allowed. 8. The Revenue is in appeal challenging the deletion of additions on account of advertisement expenses and disallowance under section 14A of the I.T. Act. 9. The assessee in the cross objections has contended that since assessee did not earn any exempt income, therefore, no disallowance under section 14A could be made. The assessee in all the above three Departmental Appeals as well as Cross Objections have also raised legal ground which reads as under : 1. That on the facts and circumstances of case, additions made under section 153A of the Income Tax Act, 1961 is bad in law as the same were not made on the basis of incriminating material found during the course of search and seizure operation and the case of relevant assessment year has already been assessed under section 143(1)/143(3) which could not abate on the date of search. 10. The Learned Counsel for the Assessee submitted that since no incriminating material was found during the course of search and the additional ground is legal in nature, therefore, same may be admitted for hearing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears that Ld. CIT(A) has not considered the findings of the A.O. while deleting the addition. The Ld. CIT(A) merely followed his order for the A.Y. 2007-2008 and deleted the addition. Since in A.Y. 2007-2008, admittedly, the departmental appeal have been dismissed by the Tribunal on account of low tax effect, therefore, the same requires readjudication at the level of the Ld. CIT(A). We, accordingly, set aside the Orders of the authorities below and restore this issue to the file of Ld. CIT(A) with a direction to redecide this ground on merits giving reasons for decision in the same, by giving reasonable, sufficient opportunity of being heard to the assessee and A.O. 14. As regards disallowance under section 14A of the I.T. Act, 1961, the assessee has not raised any specific ground before the Ld. CIT(A) that assessee has not earned any exempt income. We find from the impugned order that assessee has merely submitted before Ld. CIT(A) that he has not earned any substantive exempt income, on which, no finding of fact have been recorded by the Ld. CIT(A) as well. The Ld. CIT(A) merely followed his order for the A.Y. 2007-2008 and deleted the addition, on which, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That the Ld. CIT (A) erred in holding that some expenses are to be allocated in earning exempt income. 3. That the CIT(A) ought to have appreciated that if there is no exempt income then no disallowance is to be made u/s 14A even if itself had offered the disallowance, the same was liable to be deleted in view of the interpretation of that provisions by Hon ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. I.T.A.No. 486 and other high court in various cases. 4. That the aforesaid cross objections on legal issue are admissible in view of the / judgment of Hon ble Supreme Court in the case of National Thermal Power Corporation Ltd. vs. CIT [1998] 229-ITR-383-SC. 18. The A.O. in the assessment order has made additions on account of disallowance of advertisement expenses, disallowance unexplained loan, disallowance of interest on loans, disallowance under section 14A of the I.T. Act. The Ld. CIT(A), similarly, deleted all the additions and allowed the appeal of assessee. The Revenue is in appeal only on two grounds as against the additions made by the A.O. on more items. The assessee on the cross objections has contended that since assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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