TMI Blog2018 (6) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... RSUS DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] which is relevant to the instant case, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to recompute the disallowance u/s 14A r.w. Rule 8D. Deduction of lower of brought forward business loss or depreciation as per books of accounts while calculating the book profit u/s 115JB - Held that:- the issue involved herein requires verification at the level of the AO. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO for examination and passing an order, after giving reasonable opportunity of being heard to the assessee. - ITA No. 1101/MUM/2016 And ITA No. 1363/MUM/2016 - - - Dated:- 30-5-2018 - SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Revenue : Mr. V. Justin, DR For The Assessee : Mr. Vijay Mehta, AR ORDER PER N.K. PRADHAN, AM The captioned cross appeals- one by the Revenue and the one by the assessee are directed against the order of the Commissioner of Income Tax (Appeals)-10, Mumbai [in short CIT(A) ] and arise out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. counsel of the assessee relies on (i) order of the Mumbai Bench of the Tribunal assessee s own case for the AY 2009-10 being ITA No. 423/Mum/2015, (ii) order of the Mumbai Bench of the Tribunal assessee s own case for the AY 2009-10 being ITA No. 58/Mum/2015, (iii) order of the Mumbai Bench of the Tribunal assessee s own case for the AY 2010-11 being ITA Nos. 2650 and 3747/Mum/2015, (iv) order of the Mumbai Bench of the Tribunal assessee s own case for the AY 2005-06 being ITA No. 5852/Mum/2009 and (v) decision of the Hon ble Bombay High Court in assessee s own case for AY 2005-06 in ITA No. 1432 to 2011 and the order of the Ld. CIT(A) for the AY 2011-12. 6. We have heard the rival submissions and perused the relevant materials on record. We find that the same issue arose before the Tribunal in earlier assessment years as mentioned at para 5 hereinbefore. For ready reference, we may mention here the order dated 29.02.2008 of the Co-ordinate Bench in assessee s own case for AY 1997-98 and AY 2001-02 (ITA No. 2328/Mum/2004 3464/Mum/2005) and extract the decision as under: We have duly considered the rival contentions and gone through the record carefully. Except AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted and there is abundant authority reiterating that principle. Thirdly, the same principle namely that of a setting to rest rights of litigants, applies to the case where a point fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant has not been traversed in that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. Similarly, the Hon ble Delhi High Court in 245 ITR 492 found that if rental income from the factory building assessed as business income for earlier assessment years consistently and there is no material change in facts then AO is not supposed to assess such income all of a sudden as income from house property in one of the year in isolation. The other decisions cited by the assessee supra are also on the same line. The ld. Counsel for the assessee has demonstrated that this is the only assessment year in which rental income has been assessed as income from house property, otherwise in earlier assessment years as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med as exempt income. During the course of assessment proceedings, the AO asked the assessee to explain as to why disallowance u/s 14A r.w. Rule 8D should not be made. In response to it, the assessee explained to the AO that it had not incurred any expenses to earn exempt income and hence there is no question of making any disallowance on account of expenses incurred for earning the exempt income. However, the AO was not convinced with the said explanation of the assessee and made a disallowance of ₹ 2,83,60,930/- under Rule 8D(2)(iii) of the Income Tax Rules, 1963 (the Rule). 9. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) agreed with the reasons given by the AO. However, as the assessee has disallowed ₹ 45,200/- under Rule 8D, the Ld. CIT(A) directed the AO to give credit to this amount while making disallowance u/s 14A. 10. Before us, the Ld. counsel of the assessee submits that for the purpose of disallowance u/s 14A of the Act only those investments are to be considered from which exempt income has been received during the year. Reliance is placed by him on the decision in (i) Asst. CIT v. Vireet Investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superintendence, and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. In the instant case neither the AO nor the Ld. CIT(A) had the benefit of the above two decisions of the Hon ble Supreme Court on the date of passing the assessment/appellate order. Also the assessee was not having the benefit of the above two decisions while submitting its case before the above two authorities. In view of the above position of law, which is relevant to the instant case, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to recompute the disallowance u/s 14A r.w. Rule 8D by following the decisions of the Hon ble Supreme Court and Hon ble Bombay High Court delineated above. We direct the assessee to file the relevant documents/evidence before the AO. Needless to say the AO would give reasonable opportunity of being heard to the assessee before finalizing the order. In view of the above decision of the Hon ble Supreme Court and Hon ble Bombay High Court, we are not adverting to the decisions relied on by the Ld. counsel. Thus the 1st ground of appeal is allowed for statistical purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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