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TMI Blog2025 (1) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... of NFAC, Delhi [hereinafter referred to as "AO" u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred as "the Act") vide his order dated 28.09.2021 for AY 2019-20. ITA No.838/Del/2023 - Revenue's appeal 2. The only issue in this appeal of revenue is as regards to order of the CIT(A) deleting the addition of disallowance made by AO by invoking the provisions of Section 14A of the Act under Rule 8D of the Income Tax Rules, 1962 [hereinafter referred to as "Rules)" in regard to the expenditure relatable to exempt income. For this, the Revenue has raised various grounds which are argumentative and exhaustive and hence, need not to be reproduced. 3. The brief facts of the case are that the assessee in its return of income d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the decision in AY 2012-13 and other years in assessee's own case, deleted the disallowance by observing that interest free fund available with the assessee are more than the investment made and, for this, he relied on the decision of the Hon'ble Supreme Court in the case of South Indian Bank Ltd. v. Commissioner of Income Tax [(2021) 438 ITR 1 (SC)]. Aggrieved, revenue is in appeal before us. 5. We have heard rival submissions and gone through facts and circumstances of the case. We noted that w.e.f. 02.06.2016, the legislature by 14th amendment has amended the Rules and sub clause (ii) of Rules 8D(2) has been substituted as against the disallowances of interest against 1% of average value of monthly average opening and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of computation of disallowance of average value of investment the AO has to take only the instrument which gives rise to exempt income and not the investment which does not give rise the investment. In terms of above, we set aside the order CIT(A) on this issue and remand the issue back to the file of the ld AO in the following terms:- i. that the AO will find out the investment which gives rise to exempt income. ii. then the AO will re-compute the disallowance by taking those investment which give rise to exempt income @1% on average value of investment. iii. the AO will also verify the expenditure as described in proviso to Rule 8D(2)(ii) wherein, it is referred that the amount referred to in clause 1 and clause 2 would not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so, please furnish details." 10. In response to the above question, the assessee filed detailed reply vide letter dated 26.08.2021 explaining that concessional fee of Rs. 232.67 from AAICLAS Company Ltd, which is a subsidiary of the assessee, has been offered to tax in AY 2018-19. The assessee provided details at page No. 1902 of assessee paper book where Rs. 544.63 crores which includes Rs. 232.67 crores out of Miscellaneous Income is disclosed. The AO while framing assessment has assessed total income as admitted by assessee at Rs. 50,63,57,60,580/-. 11. At the stage of CIT(A), the assessee moved additional grounds and the additional grounds as raised before the CIT(A) are reproduced in the order of CIT(A) at page 28 in para 11 which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,02,88,14,859/- which pertains to AY 2019-20, which is already offered for taxation in AY 2018-19. Before us, he stated that part belongs to AY 2018-19 and part belongs to 2019-20 but he could not submit bifurcation of the same. He also stated that the CIT(A) simply confirmed the action of the AO by stating that the AO has no power to entertain fresh claim made by the assessee after filing the original return of income other than by filing the revised return. He also relied on the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd Vs. CIT (2006) 157 taxman 1(SC). For this, the CIT(A) observed as under:- "I have considered the assessment order, additional grounds of appeal raised by the Appellant, submissions fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above facts, the additional grounds of appeal No. 1 to 3 raised by the Appellant are dismissed." 13. We, after hearing both the sides and going through the facts of the case, notice that the income of Rs. 102.88 crores as claimed by the assessee is included in Rs. 232.67 crores which is already offered for taxation in AY, needs verification. Before us, the ld counsel for the assessee could not explain how this income of Rs. 102.88 is included in this income of Rs. 232.67 offered in AY 2018-19. At one point of time, the ld counsel made submission that part income falls in AY 2018-19 and part falls in AY 2019-20. The entire controversy raised by assessee seems plausible and there should not be double taxation of an income. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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