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2018 (10) TMI 917 - AT - Income TaxRevision u/s 263 - section 14A disallowance - Held that:- The assessee has shown profit on sale on investment of ₹ 3,21,933/- in its statement of computation for assessment year 2011-12. The assessee in its reply to the show cause notice has specifically contended that the assessee has not earned any exempt income during the year. The amount of ₹ 3,21,933/- shown in the computation of income is not exempt income. It has been offered as short term capital gain - there is no question of apportioning the expenses on exempt income. The Hon'ble Delhi High Court in the case of Chemnivest Ltd. vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Further in the case of CIT vs. Chettinad Logistics (P.) Ltd. [2017 (4) TMI 298 - MADRAS HIGH COURT], also took a similar view that Section 14A cannot be invoked where no exempt income was earned by the assessee. Therefore, we find that the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. Therefore, no revision under section 263 of the Act is warranted for disallowance under section 14A of the Act. Deletion of assets from block of assets - Held that:- As seen that there is no reference in the assessment order about this issue. The assessee contended before the Ld. PCIT that value of lease hold improvement was completely extinguished or written off by the assessee, therefore, it should not be reduced from the block of assets for the purpose of computation of depreciation. The assessee has not given any explanation regarding the write off of “furniture and fixtures”. As we have noted above there is no reference about the issue in the assessment order, if it was examine by the AO or not, therefore, non consideration of the issue by the AO makes the order erroneous as well as prejudicial to the interest of the revenue. Therefore, the contention of the ld. AR of the assessee on this issue is not acceptable. Interest paid on late deposit of tax - Held that:- We have noted that this issue has not been examined by the Assessing Officer as there is no reference in the assessment order. Therefore, we uphold the order passed by ld. PCIT on this issue. Revised relates to packing material not routed through P&L Account - Held that:- Perusal of assessment order reveals that AO has not discussed the issue while allowing relief to the assessee. We have further noted that the PCIT has recorded that the submission of AR found to be acceptable, however, it was further observed by the PCIT that necessary details regarding opening stock, purchase, consumption/sale and the closing stock at the end of the year was not furnished. On the basis of his observation Ld. PCIT concluded that AO failed to made enquiry and proper application of mind, therefore, the order passed by the AO is erroneous and prejudicial to the interest of revenue. PCIT has accepted the submission of assessee on the issue and not identified as to which information or details were not furnished. Once the Ld. PCIT accepted the explanation and reasoning furnished by the assessee no further necessary details are required to be verified with regard to opening stock, purchase and consumption and closing stock. Therefore, in our view the order on this issue is not erroneous. - Appeal decided partly in favour of assessee.
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