2013 (3) TMI 814

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..... assessee has not pressed the first legal issue that the assessment order is barred by limitation. On query from Bench, the Ld. Sr. DR stated that he has no objection of the assessee not pressing this issue. Hence, the same is dismissed being not pressed. 3. The second jurisdictional issue raised by the assessee by way of ground nos. 1 and 3 is that the reopening of assessment u/s. 147 of the Act is bad in law as the assessee has jurisdiction to reassess other than the issues in respect of which proceedings were initiated but here he was not justified with the reasons for initiation of those proceedings ceased to survive. For this, assessee has raised following ground nos. 1 and 3: 1.For that in the facts and circumsta .....

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..... there is mentioned that the assessee has borrowed capital and invested in shares and deducted interest on loan from salary income. Hence, according to him, the reassessment is bad in law. For this, he relied on the decision of Hon ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT (2011) 336 ITR 136 (Del) and also relied on the decision of Hon ble Bombay High Court in the case of CIT Vs. Jet Airways India Ltd. 331 ITR 236 (Bom). On the other hand, Ld. Sr. DR supported the orders of the lower authorities. 5. We find that this is a purely jurisdictional issue and being a legal issue but factually the AO has made disallowance while invoking the provisions of section 14A of the Act but reasons recorded for issuance .....

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..... re in the present case also, AO recorded the reason for disallowance of expenses by invoking the provisions of section 14A of the Act but made addition entirely on new issue i.e. disallowance of interest on borrowed funds. As cited by Ld. counsel for the assessee the issue is squarely covered by the decision of Hon ble Delhi High Court in the case of Ranbaxy Laboratory Ltd. (supra) as well as the case law of Hon ble Bombay High Court in the case of Jet Airways India Ltd. (supra). Respectfully following the same, we allow the appeal of assessee on jurisdictional issue. Once we have allowed the jurisdictional issue in favour of the assessee, there is no need to adjudicate the remaining issues on merits. Appeal of assessee is allowed. .....

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