9911796707
TMI Blog2018 (1) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A r/w rule 8D. 3. Brief facts are, the assessee a company is engaged in the business of builder and property developer. For the assessment year 2010-11, the assessee filed its return of income on 29th September 2009, declaring total income of Rs..60,52,460. During the assessment proceedings, the Assessing Officer noticing that the assessee has debited an amount of Rs. .(-) 1,54,24,888, as share from joint venture which is not taxable, whereas, the assessee has debited expenditure towards interest and finance charges amounting to Rs..2,56,70,226, called upon the assessee to explain why expenditure attributable to earning exempt income should not be disallowed. In response to the query raised by the Assessing Officer, the assessee made de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributable to earning of exempt income, however, at the same time, he expressed the view that such lapse or omission on the part of the Assessing Officer is procedural lapse and can be corrected by the first appellate authority, since, his powers are co-terminus with that of the Assessing Officer. Accordingly, he proceeded to quantify the disallowance under section 14A r/w rule 8D at Rs..1,08,29,111 for Assessment Year2009-10 and, thereby, allowing partial relief to the assessee. In Assessment Year2010-11 the Commissioner (Appeals) enhanced the disallowance to Rs..1,22,66,185. Being aggrieved of the aforesaid decision of the learned Commissioner (Appeals), assessee is in appeal before us. 5. In grounds no.1 and 2 of the revised Form no.36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As could be seen from the factual matrix of the case, the assessee in the relevant previous year has earned interest income from the capital invested in the joint venture which has been offered to tax in the return of income filed. That besides, the assessee has shown his portion of the share in the loss suffered by the joint venture during the year. It is also a fact that assessee has suo-motu disallowed an amount of Rs..1,08,00,000 under section 14A of the Act in Assessment Year2009-10. In the course of assessment proceedings, in response to the query raised by the Assessing Officer, the assessee has justified the disallowance made by it under section 14A through detailed submissions. However, the Assessing Officer except recording a vag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer. As could be seen from the language of section 14A(2) r/w rule 8D(1), it is the Assessing Officer who has to record his satisfaction with regard to the correctness of assessee's claim before proceeding to disallow expenditure under section 14A. In the facts of the present case, the Assessing Officer has failed to do so. The learned Commissioner (Appeals) has given a clear and categorical finding in this regard which has not been challenged by the Department. Therefore, when the statutory provisions mandate a particular act to be done by a particular Authority in a particular manner, it has to be done by that authority in that manner only or not at all. The satisfaction to be recorded by the Assessing Officer under section 14A(2) cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the suo-motu disallowance made by the assessee even has to be deleted is a completely new issue raised for the first time before us. Therefore, for the purpose of giving a fair opportunity to the Department to have its say on assessee's aforesaid claim, we restore the matter back to the file of the Assessing Officer for adjudication after considering the submissions of the assessee and keeping in view the judicial precedents that may be cited before him and in accordance with the relevant statutory provisions. It is open for the assessee to raise all contentions regarding applicability of section 14A to the share in the Profit & Loss derived from the joint venture. With the aforesaid observations, no separate adjudication of ground no1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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