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2016 (4) TMI 1336 - AT - Income TaxDisallowance u/s 14A r.w. rule 8D - establishment of nexus between the expenses incurred and the exempt income - Held that:- As relying on assessee's own case we restore the issue of disallowance under section 14A of the Act r.w. Rule 8D of the IT Rules to the file of the AO with a direction to consider the issue afresh, after affording the assessee adequate opportunity of being heard and to submit details/submissions required in the matter, and to then adjudicate the matter afresh. Claim of loss from derivative transactions (futures and options trading) - CIT(A) giving directions to the AO to verify the assessee’s claim - power of CIT-A - Held that:- As clearly evident that the learned CIT(A) in issuing the directions, he did to the AO, went beyond the grounds raised in the assessee’s appeal and the issues which were the subject matter of the order of assessment, thereby clearly exceeding his jurisdiction in the matter. As decided in the case of CIT vs. Sardari Lal and Co. [2001 (9) TMI 1130 - DELHI HIGH COURT] has held that the CIT(A) has no power to direct the AO to bring to tax a new source of income, which was not considered by the AO in the order appealed against him. Wherever the question of taxability of income from a new source of income is concerned, which has not been considered by the AO, the jurisdiction to deal with the same in appropriate cases may be dealt with under section 147/148 and 263 if requisite conditions are fulfilled. It was also observed that in the presence of such specific provisions, the learned CIT(A) had no power to tax a new source of income not considered by the AO in the order of assessment which was appealed against before him - we delete the directions/observations issued by the learned CIT(A) to the AO - Decided in favour of assessee Loss from derivatives (future & options) trading - enhancement of assessment without affording the appellant reasonable opportunity of showing cause against such enhancement as provided u/s 249(2) - Held that:- From the observations and directions of CIT(A) it is not clear as to how the business loss from derivatives (futures and options) trading has been allowed by the AO, expressing his disagreement therewith and further directing the AO to re-examine this issue, in our view, can lead to a possible enhancement of assessment and/or levy of penalty as the case may be. As contemplated under section 251(2) of the Act, the learned CIT(A), in not affording the assessee reasonable opportunity to show cause against such adverse findings/directions to the AO for examination of a fresh issue that could lead to possible enhancement, etc., committed an error - we hold that the learned CIT(A) erred in rendering such observation and directions on the issue of losses from derivatives (futures and options) trading without affording the assessee reasonable opportunity of being heard as contemplated under section 251(2) - Decided in favour of assessee
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