ITAT restored matter to AO for verification of details to compute disallowance
ITAT restored matter to AO for verification of details to compute disallowance
Assessee submitted a revised return of income showing exempt income on loss on sale of mutual fund of which had been deducted from the dividend income. O assessee's failure to furnish details of expenditure relating to exempt income as disallowance, AO applied proportionate method and disallowed Rs 9146980 u/s 14A (of Income Tax Act, 1961). CIT(A) deleted the addition. ITAT restored the matter to AO for verification of details and then compute disallowance.-501221
1. The assessee filed return of income declared total income of Rs.583929411/. The assessee had earned exempt income of Rs.9201123.53 during the year and the assessee submitted a revised computation of income showing that the exempt income is Rs.11838675/- for the reason that loss on sale of mutual fund of Rs. 2637551/- had been deducted from the dividend income. On 21.11.2012 AO asked the assessee to furnish details of expenditure relating to exempt income as disallowance was show by assessee to be NIL. Therefore the AO applied proportionate method and disallowed Rs. 9146980/- u/s 14A (of Income Tax Act, 1961).
2. CIT(A) deleted the addition. Disallowance u/s 14A (of Income Tax Act, 1961) was deleted by CIT(A).
3. On appeal, the ITAT held as under:
"4. Further the calculation of expenses submitted by the assessee prima facie does not show that how average value of investment can be NIL. These facts require verification from the side of revenue. If the average value of investment is NIL then the computation of disallowance made by the assessee may be correct. Before us neither the ld DR nor the ld AR of the assessee submitted any details about the working of Rule 14A (of Income Tax Rules, 1962) and relevant documents as the balance sheet etc of the assessee. The learned Commissioner of Income-tax (Appeals) has also not looked into the facts as to how the average value of investment can be nil when the assessee has earned such a huge amount of exempt income. Therefore in the interest of justice the whole issue of disallowance u/s 14A (of Income Tax Act, 1961) as well as revised computation of total income furnished by the assessee is set aside to the file of AO for details verification and then compute disallowance u/s 14A (of Income Tax Act, 1961) and grant the revision in income as shown by the assessee, if found in accordance with law. Needless to say that AO shall consider all the judicial pronouncement available and also given the adequate opportunity of hearing to the assessee.”
Case Reference - ACIT, Haryana Gramin Bank.
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "C": NEW DELHI
BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No.587/Del/2014
(Assessment Year: 2010-11)
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