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TMI Blog2024 (12) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... n writing as contemplated under section 14A of the Act. The requirement of section thus stands addressed in the present case as the satisfaction is duly discernible in the action of the AO. We are of the opinion that requisite satisfaction was expressed in unequivocal terms and was otherwise also subsisting for invoking section 14A and Rule 8D. Consequently, we hold that the objection of the assessee on this score is unfounded. Thus, we are of the considered opinion that the CIT(A) has rightly upheld the action of the AO with some modification towards exclusion of investments not yielding exempt income which is in accord with law. Hence, we decline to interfere with the order of the CIT(A) restricting the disallowance either to the extent of the exempt income claimed or computation of disallowance under Rule 8D with reference to investments yielding exempt income. The relief sought by the assessee for accepting the suo moto disallowance made by the assessee is thus not sustainable in law. Short credit of TDS granted by the AO - AO is directed to look into the grievance of the assessee and implement the directions provided in first appellate order on the issue in letter spirit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961. 2 ITA No.2658/Del/2023 CIT(A)- NFAC Delhi order dated 24.07.2023 Assessment order dated 29.12.2016 -do- 3. ITA No.2659/Del/2023 -do- Assessment order dated 30.12.2019 -do- 4. ITA No.2660/Del/2023 -do- Assessment order dated 15.06.2021 -do- 5. ITA No.2661/Del/2023 -do- Assessment order dated 21.09.2022 -do- 6. ITA No.2657/Del/2023 CIT(A)-NFAC Delhi order dated 18.07.2023 Assessment order dated 31.12.2016 -do- 7. ITA No.2645/Del/2023 CIT(A)-NFAC Delhi order dated 24.07.2023 Assessment order dated 29.12.2017 -do- 8. ITA No.2646/Del/2023 -do- Assessment order dated 30.12.2019 -do- 9. ITA No.2647/Del/2023 -do- Assessment order dated 15.06.2021 -do- 10. ITA No.2648/Del/2023 -do- Assessment order dated 21.09.2022 -do- 11. ITA No.2649/Del/2023 -do- Assessment order dated 28.12.2022 -do- 2. The issues being common and being related to the same assessee from different assessment years the respective appeals of the assessee as well as the Revenue have heard together and a common order is being passed hereunder. 3. We shall first take up the A.Y. 2014-15 for adjudication purposes. ITA No.2581/Del/2023 (Assessee s appeal) for A.Y. 2014-15 4. As per the grounds of appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income Tax (2015) 59 taxmann.com 295 (Delhi) and PCIT vs. Caraf Builders Constructions (P.) Ltd. (2019) 101 taxmann.com 167 for the purposes of the computation of disallowance qua the investment which have only yielded exempt income only and Investments not yielding exempt income cannot be reckoned. The assessee thus claims that in the absence of dissatisfaction of the AO on the suo moto disallowance, the disallowance carried out by the assessee under section 14A is not justified. Further, the upholding of part disallowance by re-computing the disallowance vis- -vis investment yielding exempt income as directed by the CIT(A) is also not justified in the absence of any satisfaction recorded by the AO as contemplated under section 14A of the Act. The learned Counsel thus insists for deletion of entire disallowance carried under section 14A under challenge. 4.3 We have considered the rival submissions with regard to the objection of the assessee on disallowance of expenditure incurred in relation to exempt income not forming part of total income in terms of section 14A of the Act. From the facts culled out above and on perusal of records before us, we note that Rule 8D prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 14A, as recorded by the AO, having regard to the accounts thus cannot be discredited. It would be pertinent here to say that phraseology employed in section 14A(2) of the Act suggests that what is required to trigger section 14A among others is that AO is 'not satisfied' with the correctness of the claim of the assessee having regard to its accounts. It nowhere strictly indicates that the satisfaction is required to be explicitly reduced in writing. The language employed in section 14A is not akin to 'record his reasons' employed in section 148(2) of the Act. When seen in the context, such difference in phraseology in the context of different clauses of the Act would permit us to draw inference that the expression is not satisfied is in variance with the expression record reasons as a jurisdictional requirement as noted with reference to section 148(2) of the Act. Thus, the indication of prima facie presence of satisfaction can be deemed to be substantial compliance of the provisions without there being any explicit assertion about the same. As noted, the affirmative steps by way of SCN on the issue in the first instance tantamount to subsistence of ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the AO, is still pending for disposal till date. This issue has been examined and it is seen that the appellant had claimed TDS of Rs. 36,30,15,406/- in it's original ITR and revised it at Rs. 26,29,08,452/- in the revised return of income. During the appellate proceedings, the appellant submitted copy of 26AS which shows amount paid/credited at Rs. 54,13,92,489/- and TDS collected at Rs. 35,42,32,411/- pertaining to FY 2013-14 and 2014-15. The appellant didn't furnished exact party-wise details for which TDS credit was not granted. Also, the appellant didn't segregate the TDS pertaining to the present financial year 2013-14 only. Thus, it is difficult to ascertain the quantum of TDS appearing in 26AS for FY 2013-14. Accordingly, the appellant is directed to furnish the details of TDS appearing in the 26AS statement pertaining to FY 2013-14 before the AO and then AO shall verify the details and allow the credit of TDS as per the provision of section 199 of the Act read with rule 37BA of the IT Rule. Thus, this ground of appeal is allowed for statistical purpose. 5.3 In the light of the submissions made on behalf of assessee, the Assessing Officer is directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been availed in any other year. The wrong mentioning of A.Y. in DDT Challan has occurred due to bonafide clerical error of the assessee and denial of credit due to mentioning of wrong assessment year in the Challan would lead to double payment of taxes and unjust enrichment. The assessee thus sought suitable relief in the matter. 7.2 On perusal of the first appellate order, it is seen that assessee claims to have committed mistake in putting A.Y. 2016-17 instead of A.Y. 2015-16 in DDT Challan and the AO has not granted credit of DDT in A.Y. 2015-16. 7.3 In view of the fact that the credit as per the DDT Challan appears in A.Y. 2016- 17, the AO has declined to accept the credit in relation to A.Y. 2015-16. The matter requires to be looked into administratively by the Competent Authority of the Income tax Department. It is not within the domain of the ITAT to examine such aspects. We are thus not in a position to give any direction in this regard. The issue requires to be resolved between the assessee and the Revenue in accordance with law. We thus decline to interfere with the order of the CIT(A) in the matter. 7.4 Ground No.2 pertaining to Short credit of DDT is thus dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in the Challan, the credit for which has not been availed in any year. 12.2 As noted earlier, the matter is required to be resolved administratively by the Competent Authority. It is not practicable for the Tribunal to express any view in the matter either way. The assessee is advised to take steps for correction of Challan in accordance with law and in the alternative take up the matter administratively with the Competent Authority in the Income-tax Department. 12.3 Ground No.2 is thus dismissed. 13. Ground No.3 relates to short credit of TDS to the extent of Rs. 38,42,652/-. 13.1 In consonance with the directions given for earlier years (supra), the AO may examine the grievance of the assessee in accordance with law in an expeditious manner. 13.2 The Ground No. 3 of the assessee is allowed for statistical purposes. ITA No.2660/Del/2023 for A.Y. 2018-19 (Assessee s Appeal): 14. Ground No.1 concerns disallowance of addition under section 14A of the Act. 14.1 In consonance with the view expressed in A.Y. 2014-15, 2015-16 2017-18 (supra), the AO shall determine the disallowance excluding the investment not yielding exempt income subject to upper limit to the extent of exempt inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue in A.Y. 2014-15 as under: 4.2 Ground No. 3 relates to disallowance of Rs. 35,35,76,158/- on account of Employee Stock Option Scheme Compensation: In this ground of appeal, the appellant's main contention is that the AO has disallowed the above expenditure merely relying upon the earlier years assessment orders wherein disallowance has been made on similar grounds. On verification of the assessment order as well as rectification order, it is noticed that the AO had inadvertently made a disallowance of Rs. 19,10,00,000 vis- -vis 19,07,072/- as charged in the Profit Loss Account. Vide rectification order dated 18.04.2017, this mistake has been rectified by the AO and the disallowance of Employee Stock Option Scheme Compensation was reduced from Rs. 353,576,158/- to Rs. 164,483,230/-. Besides, the appellant submitted that this issue is squarely covered in favour of the appellant in appellant's own case for . . 2007-08 to A.Y. 2013-14. During the course of appellate proceedings, the appellant had also relied on a number of jurisdictional as well as non-jurisdictional judicial pronouncements in support of its contention raised in the above ground of appeal. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Lemon Tree Hotels (P) Ltd [2019] 104 taxmann.com 26 (Delhi)), wherein the findings of the Delhi ITAT has been concurred in which it was held that ESOP compensation is allowable as revenue expenditure and in the case of New Delhi Television Limited [2018] 99 taxmann.com 401 (Delhi)/[2017] 398 ITR 57 (Delhi) wherein it was held that expenditure arising on account of ESOP compensation is an ascertained liability It is also seen that a SLP was filed by the Revenue before the Hon'ble Supreme Court against the order of the Delhi High Court in the case of Lemon Tree Hotels (P) Ltd, which was later on withdrawn by the Revenue (Diary No. 1580/2019). In view of the above facts and circumstances of the case, earlier decisions in the appellant's own case and decisions relied upon, I am of the considered view that the ESOP expenses claimed by the appellant is an allowable expenditure u/s 37 of the Act. Hence, the AO is directed to delete the above disallowance on account of Employee Stock Option Scheme. Thus, this ground of appeal is allowed. 18.3 It is observed that the CIT(A) has followed the decision of the Co-ordinate Bench wherein the additions on account of ESOP compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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