TMI Blog2021 (11) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... and supposed to have been considered by the Assessing Officer while passing the Assessment Order u/s.143(3) of the Act had totally ignored the balance-sheet. If at all he has considered, he has not even passed the assessment order by ignoring the provisions of law, i.e. Section 14A r.w.R.8D of the Income Tax Rules, 1962 - As in this case, tangible material is clearly available to the Assessing Officer and therefore the Assessing Officer validly reopened the assessment. In view of the above, we upheld the reopening made by the Assessing Officer u/s.147. - Decided against assessee. Addition u/s 14A r.w.r.8D - In the assessment order, the Assessing Officer has not discussed details of the own and borrowed funds. In the order of the Commissioner of Income Tax (Appeals), CIT(A) has categorically given a finding that the Assessee has not maintained separate books of account, year-wise to prove that only interest-free source has been utilized for investments. By considering the above findings Commissioner of Income Tax (Appeals) and by keeping in view the facts and circumstances of the case, we are of the opinion that one more opportunity should be given to the Assessee to substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Computer Assisted Scrutiny Selection [CASS], and a notice u/s.143(2) was issued to the Assessee. The assessment was completed u/s.143(3) on 30.03.2015. Subsequently, a notice u/s.148 was issued on 31.03.2017 on the ground that there is a reason to believe that the income chargeable to tax has escaped assessment. The reasons for reopening by the Assessing Officer vide order dated 07.09.2017 recorded by the Assessing Officer is as under: On verification of records, it is found that the Assessee Bank made a disallowance of ₹ 24,93,305/- u/s.14A. It is observed that the disallowance u/s.14A is to be calculated as per the methodology prescribed in the Rule 8D of the Income Tax Act, 1961. The Assessee Bank did not follow the methodology prescribed by the Section 14A red with Rule 8D. The disallowance u/s.14A read with Rule 8D is calculated as follows: 1) Amount of expenditure directly relating to income which does not form part of total income NIL 2) Expenditure by way of interest A*B/C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed u/s.14A read with Rule D. Hence, I have the reasons to believe that the income of ₹ 3,37,31,452/- chargeable to tax has escaped assessment for the assessment year 2012 2013. 3. The Assessee has raised an objection vide letter dated 13th October, 2017 by stating that there is no tangible material to reopen the assessment and requested to drop the assessment. 4. The Assessing Officer has considered the objections raised by the Assessee and rejected the same by order dated 23.11.2017 by observing that the Assessing Officer has not considered the issue of Section 14A of the Income Tax Act, 1961 and therefore there is no change of opinion. So far as the tangible material is concerned, the Assessing Officer has observed that based on the existing material available on record, assessment is reopened. Accordingly, the objection raised by the Assessee is rejected. 5. Before us, the learned Counsel for the Assessee has submitted that there is no tangible material available before the Assessing Officer to come to a conclusion that there is an escapement of income and submitted that the reopening is not valid. 6. The learned Counsel for the Assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave heard both the sides, perused the materials available on record and gone through the orders of the authorities below. In the assessment order dated 05.12.2017, the Assessing Officer has noted that the Assessee himself had made a disallowance of ₹ 24,93,305/- u/s.14A of the Income Tax Act, 1961. However, the disallowance u/s.14A of the Act should be made as per the methodology prescribed in Rule 8D of the Income Tax Rules, 1962. Further, it is found that the disallowance u/s.14A of the Income Tax Act, 1961 r.w.R.8D of the Income Tax Rules, 1961 was not made by the Assessee during the computation of income as per the methodology mentioned in Section 14A of Rule 8D. 11. From the above, it is clear that the Assessing Officer had recorded the satisfaction with the quantum of suo-motu disallowance made by the Assessee is not correct and not in accordance with the methodology provided in Rule 8D. Accordingly, by reopening the case of the Assessee, the assessment was completed. In our opinion, the satisfaction recorded by the Assessing Officer is in consonance with the judgement of the Hon ble Supreme Court in the case of M/s. Maxopp Investment Limited Vs. Commisioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere investments yield exempt income and submitted that the order passed by the learned Commissioner of Income Tax (Appeals) has to be set aside. 16. On the other hand, the learned Departmental Representative has submitted that the Assessee has not given any details in respect of the borrowed funds and own funds and therefore the Assessing Officer and the learned Commissioner of Income Tax (Appeals) has rightly decided on the issue. 17. In so far as the investments which yield exempt income, no such arguments were placed, neither before the Assessing Officer nor before the learned Commissioner of Income Tax (Appeals). He further strongly supported the orders passed by the authorities below. 18. We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below. In the assessment order, the Assessing Officer has not discussed details of the own and borrowed funds. In the order of the learned Commissioner of Income Tax (Appeals), the learned CIT(A) has categorically given a finding that the Assessee has not maintained separate books of account, year-wise to prove that only interest-free source has been utilized f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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