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TMI Blog2022 (8) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 (1) TMI 782 - ITAT MUMBAI] as has been held there that Ld. CIT(A) is not empowered to remove the deficiency in the order of AO. Alternatively also we hold that section 14A is not applicable in the present case as argued by the assessee vide para-12 above. Section 14A of the Act is applicable only those income which are prescribed in chapter-III. Any income which are part of total income but ultimately not chargeable to tax by virtue of chapter 6A or as in the instant case section 67, section 86 read with section 167B of the Act. As section 14A is not applicable in the case of assessee, hence, there is no question of suo moto disallowance by assessee on interest on TDS - As directed to the AO, for accepting revised computation to be filed by the assessee reversing suo moto disallowances made in anticipation of applicability of section 14A. - ITA No. 5709/Mum/2015 - - - Dated:- 5-8-2022 - Shri Aby T Varkey, Judicial Member And Shri Gagan Goyal, Accountant Member For the Appellant : None For the Respondent : Sh. R. A. Dhyani, Sr. DR ORDER PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of Ld. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on TDS of Rs. 2,55,738/- which is allowable in view of Hon ble ITAT decision in the case of DCIT Cir- 3(1) vs. Narayani Ispat Kolkata ITA No. 2127/Kol/2014 AY 2010-11 date of order 30.08.2017 and in the case DCIT Vs. Techno Electronics Ltd current tax online. ITA No. 2338/M/2016 Author Shri. Saktijit Dey Hon ble Member. 6. The Appellant had suo moto made disallowance under sec 14A in respect of share income from AOP, which is not disallowable as per law. Hence the appellant now claims that it should be fully allowed. 3. Brief facts of the case are that the assessee filed its e-return on 30.09.2011 declaring a total loss of Rs. (1, 45, 88,051/-). The case was selected for scrutiny and notice under section 142(1) 143(2) of the Income Tax Act, 1961 (for short the Act ) were issued. The assessee-company engaged in the business of builder and property development. A company had 50% ownership in joint venture M/s Akruti SMC JV. 4. The Assessing Officer (AO) during the assessment proceedings, made an addition under section 14A read with Rule 8D amounting to Rs. 3,63,166/-. This amount of addition, he made in addition to Rs. 59, 69,632/- suo moto disallowed by assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession of the space would be handed over to them only after entering into Lease Agreement between the Lesser (MSRTC) and the Lessee which had not been done in case of the appellant till 31.03.2011. Therefore, the A.O, is directed to disallow the appellant's claim for deduction of interest expenses of Rs. 1, 76, 36,246/- . 9. As per assessee both the JV partners have shared constructed area of shopping complex six months ago and had started receiving lease rental separately as discussed (supra). But, accounting entry was passed on the last day of accounting period. As per assessee, the fact is that constructed areas of Mall etc. were divided amongst to JV partners six months ago. 10. Other than the facts of the matter, one legal issue also emanated from the order of Ld. CIT(A), that the Ld. CIT (A) had not issued any notice for enhancement of income, as per section 251 the Ld. CIT(A) is empowered to confirm, reduce, enhance or annul the assessment but enhancement can be done only after giving a reasonable opportunity to the assessee of showing cause against such enhancement. In this case while dealing with this issue, he simply directed the AO to disallow the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded all income on which no income tax is payable under chapter VII. (5) Chapter VII contains section 86 which provides for manner of taxing income of member from AOP. Thus as per the scheme of Act, share income does form part of total income on which rebate of tax is allowable. (6) There is difference between two concepts that is income, which does not form part of total income and income on which tax rebate is allowable. Share income from AOP forms part of total income on which tax rebate is allowable. Hence section 14A cannot be invoked in respect of share income from AOP. (7) Share income from AOP is tax rebatable and not tax exempt. (8) Truly speaking, as per the scheme of assessment of AOP, tax by way of share income of member is charged from AOP and member is not charged to avoid double taxation. (9) Sec. 80.... provides that if AOP has got deduction u/s 80HH etc. ,member would not get it again. This shows that income of member has been taxed in the hands of AOP and member is being taxed only for rate purpose. It also means that income of member is assessable in the hands of member as if it is its own income from AOP. (10) If rate of tax in the hands of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, when the statutory provisions mandate a particular act to be done by a particular Authority in a particular manner, it has to be done by that authority in that manner only or not at all. The satisfaction to be recorded by the Assessing Officer under section 14A(2) cannot be substituted by the satisfaction recorded by the first appellate authority, even, accepting the fact that his power is co-terminus with that of the Assessing Officer. That being the case, the Assessing Officer could not have done any further disallowance under section 14A r/w rule 8D. 15. Considering the decision of Jurisdictional ITAT in assessee s own case as mentioned (supra) and argument of assessee as discussed in para-12 above. We are of the considered view that technically the action of AO was wrong and in defiance of the conditions prescribed in section 14A read with Rule 8D. Moreover, referring the decision of Jurisdictional ITAT (supra) as has been held there that Ld. CIT(A) is not empowered to remove the deficiency in the order of AO. Alternatively also we hold that section 14A is not applicable in the present case as argued by the assessee vide para-12 above. Section 14A of the Act is app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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