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2019 (4) TMI 287

T:- Since in A.Y. 2007-2008, admittedly, the departmental appeal have been dismissed by the Tribunal on account of low tax effect, therefore, the same requires readjudication at the level of the CIT(A). We, accordingly, set aside the Orders of the authorities below and restore this issue to the file of CIT(A) with a direction to redecide this ground on merits giving reasons for decision in the same, by giving reasonable, sufficient opportunity of being heard to the assessee and A.O. - Admission of additional ground - addition is not permissible if no incriminating material found - HELD THAT:- we are of the view that additional ground raised in all the matters are legal in nature and there is no need to investigate into fresh facts, therefore, additional ground shall have to be admitted. - Since the additional ground raised for the first time and have not been adjudicated in two years by the authority below, therefore, the same requires consideration at the level of the Ld. CIT(A). We, accordingly, set aside the orders of the authorities below and restore the additional ground to the file of Ld. CIT(A) with a direction to decide this additional ground as per law, by giving r .....

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es on 27.03.2012. Warrant of authorisation under section 132 of the I.T. Act was also issued in the name of the assessee company. Notice under section 153A of the I.T. Act was issued to the assessee and in response thereto, assessee filed returns of income for all the years. The assessee deriving income from house property, income from business and profession and income from capital gains. The assessee filed details which were examined by the A.O. The A.O. noted that during the course of search, it was observed that Group has booked substantial expenses under the Head Advertisement Expenses . Some of the expenses do not appear to be genuine/justified. The A.O. accordingly, framed assessments under section 153A r.w.s. 143(3) of the Income Tax Act, 1961, in all the above years and made several additions against the assessee. In the back ground of these facts, we decide the appeals of the Department and Cross Objections of the Assessee as under. ITA.No.3855/Del./2015 - A.Y. 2008-2009 : 4. The Department has raised the following effective grounds of appeals : 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 8,78,816/- mad .....

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in assessment year under appeal. Therefore, ₹ 50 lakhs was added to the income of assessee. The A.O. further made addition on account of interest on loans in a sum of ₹ 6 lakhs. The A.O. further made addition on account of disallowance under section 14A read with Rule 8D of the I.T. Act in a sum of ₹ 2,86,42,274/- and computed the income of assessee accordingly. 7. The assessee challenged all these additions before Ld. CIT(A). the submissions are noted in detail in the impugned order of the Ld. CIT(A). The Ld. CIT(A) following the order for A.Y. 2007-2008, deleted the addition on account of disallowance of advertisement expenses. The Ld. CIT(A) also deleted the addition of ₹ 50 lakhs and ₹ 6 lakhs. The Ld. CIT(A) following his order for A.Y. 2007-2008 also deleted the addition made under section 14A of the I.T. Act, 1961. The appeal of assessee was accordingly allowed. 8. The Revenue is in appeal challenging the deletion of additions on account of advertisement expenses and disallowance under section 14A of the I.T. Act. 9. The assessee in the cross objections has contended that since assessee did not earn any exempt income, therefore, no disallowance .....

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in the case of CIT vs. Kabul Chawla 380 ITR 573 (Del.) and Pr. CIT vs. Meeta Gut Gutia 395 ITR 526 (Del.). Since the additional ground raised for the first time and have not been adjudicated in two years by the authority below, therefore, the same requires consideration at the level of the Ld. CIT(A). We, accordingly, set aside the orders of the authorities below and restore the additional ground to the file of Ld. CIT(A) with a direction to decide this additional ground as per law, by giving reasonable and sufficient opportunity of being heard to the assessee and A.O. in all the three years. 13. As regard addition on merit considered by the Ld. CIT(A) on account of advertisement expenses and disallowance under section 14A of the I.T. Act, 1961, it appears that Ld. CIT(A) has not considered the findings of the A.O. while deleting the addition. The Ld. CIT(A) merely followed his order for the A.Y. 2007-2008 and deleted the addition. Since in A.Y. 2007-2008, admittedly, the departmental appeal have been dismissed by the Tribunal on account of low tax effect, therefore, the same requires readjudication at the level of the Ld. CIT(A). We, accordingly, set aside the Orders of the author .....

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377; 11,27,042/- made by the AO on account of unexplained advertisement expenses. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 2,49,74,701/- made by the AO u/s 14A r.w.r 8D of the I.T. Rules. (The AO had made an addition of ₹ 7,08,92,279/-/- u/s 14A r.w.r 8D of the I.T. Rules which was subsequently reduced u/s 154 of the I.T. Act to ₹ 3,44,32,432/-/) . 17. The assessee in the C.O.No.52/Del./2016 has raised the following grounds : 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in upholding the disallowance of ₹ 51,12,178/- nder section 14A read with rule 8D of the Income Tax Act & Rules respectively. 2. That the Ld. CIT (A) erred in holding that some expenses are to be allocated in earning exempt income. 3. That the CIT(A) ought to have appreciated that if there is no exempt income then no disallowance is to be made u/s 14A even if itself had offered the disallowance, the same was liable to be deleted in view of the interpretation of that provisions by Hon ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. I.T.A.No. 486 and other high court in various case .....

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appreciated that if there is no exempt income then no disallowance is to be made u/s 14A even if itself had offered the disallowance, the same was liable to be deleted in view of the interpretation of that provisions by Hon ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. I.T.A.No. 486 and other high court in various cases. 4. That the aforesaid cross objections on legal issue are admissible in view of the / judgment of Hon ble Supreme Court in the case of National Thermal Power Corporation Ltd. vs. CIT [1998] 229-ITR-383-SC. 23. In this year, the A.O. made additions on account of disallowance of advertisement expenses, unexplained loan, disallowance of interest and disallowance under section 14A of the I.T. Act, 1961. The Ld. CIT(A) allowed the appeal of assessee. The department has raised only two issues in the departmental appeal and assessee has raised the issue in the cross objection that since no exempt income has earned, therefore, no disallowance under section 14A could be made. 24. We have already admitted additional ground of appeal in all the matters. Therefore, following the reasons for decision for the A.Y. 2008-2009 and 2009-2010, we set aside the Ord .....

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