TMI Blog2022 (11) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... rns exempt income or not is only prospective and does apply to the relevant assessment year. In this context, we rely on the order of Bajaj Capital Ventures (P) Ltd. [ 2022 (7) TMI 23 - ITAT MUMBAI] . It is ordered accordingly. Addition u/s 40(a)(ia) which were year-end provisions reported in the Form 3CD - HELD THAT:- We find on identical facts and circumstances, the co-ordinate Bench of the Tribunal in assessee s own case for assessment years 2013-2014 [ 2022 (6) TMI 1433 - ITAT BANGALORE] has restored the issue to the A.O. with specific directions to verify the details of payments and tax deducted and allow the expenditure where the TDS is remitted to the Government account on or before the due date for filing the return of income. Addition u/s 43B - Assessee did not remit statutory dues [CST, excise duty on closing stock] before the due date of filing of return of income - AO rejected the contention of the assessee and held that the CST, excise duty on closing stock collected and paid are included in the valuation of purchase, sale and inventory, then effect will be nil only if the said amounts are paid within the due date of filing return in terms of section 43B - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic reasons, it were to be held that the income of the Trust is the income of the Assessee, given the provisions of section 10(38) of the I.T. Act, there is no reason why the benefit of the exemption cannot be extended to the assessee as well. With respect to the provisions of section 115JB of the I.T. Act, the lower authorities have sought to include the subject amount as a part of 'book profits' though the same is added to the General Reserves and not in the profit and loss account. In the event of books of accounts being prepared in accordance with the provisions of the relevant Companies Act, it is well accepted that the AO has no jurisdiction to go behind net profit shown in the profit and loss account except to the extent provided therein. As it has been held above that the said amount is not the income of the Assessee but of the Trust, there is no question of considering it as a part of book profits. On going through the impugned orders there is no effort to establish the same. Given the same, the CIT(A)/AO have erred in disturbing the book profit as considered by the Assessee. Short credit of taxes - We restore the issue raised in ground to the files of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust to the assessee as long term capital gain and assessed the same to tax. The A.O. accordingly assessed the income of the assessee at Rs.377, 15, 30, 101 under the normal provisions of the I.T. Act against the income of Rs.132, 92, 94, 900 declared by the assessee in the revised return of income. Accordingly, the A.O. raised demand of Rs.80, 38, 85, 646 (including interest) in the said assessment order. 4. Aggrieved, the assessee filed an appeal before the first appellate authority. The CIT(A) vide the impugned order dated 20.12.2017, disposed of the appeal of the assessee. The CIT(A) partly allowed the appeal of the assessee. 5. Aggrieved by the order of the CIT(A), the assessee has filed the present appeal before the Tribunal, raising the following grounds:- 1. Grounds relating to Depreciation on Goodwill: 1.1 The learned CIT{A) erred in confirming the action of the AO in disallowing Depreciation of INR 3, 73, 88, 587 on Goodwill arising on acquisition of Karnataka Breweries and Distilleries Limited; 1.2 The learned CIT{A) erred in confirming the action of the AO in disallowing Depreciation by blindly relying on the earlier year order, without apprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e book profits for the purpose of 115JB of the Act. 3. Grounds relating to Disallowance under section 40(a)(ia): 3.1 The learned CIT(A) has erred in confirming the action of the AO in making disallowance under section 40(a)(ia) amounting to INR 7, 34, 77, 951 by observing that TDS was not made on the year end provisions; 3.2 The learned CIT(A) has erred in confirming the action of the AO in making disallowance under section 40(a)(ia) without appreciating the fact that there was no requirement of making TDS on year end provisions when no credit was given to the identified party; 3.3 The learned CIT(A) has erred in confirming the action of the AO in making disallowance under section 40(a)(ia) without appreciating the rationale of the provisions of the Act and without appreciating that TDS is required only when the income is credited to identified party; 3.4 . The learned CIT(A) has erred in confirming the action of the AO in making disallowance under section 40(a)(ia) without appreciating the fact that the year end provisions made by the Assessee is reversed in the subsequent year and the TDS is deposited based on the actual credit given tc the party; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Promotion expenses to Force India Formula One Team Limited, by holding the payment to be capital in nature 6.2 The learned CIT{A) has erred in confirming the action of the AO in making addition in respect of payment towards Brand Promotion expenses, ignoring the commercial and economic rationale of the business of the Assessee; 6.3 The learned CIT{A) has erred in confirming the action of the AO in making addition in respect of payment towards Brand Promotion expenses, by erroneously holding that the objective is enhancement of brand and creation of brand entity and without appreciating the fact that these expenses are to promote the brand and increase the sale of the product 6.4 The learned CIT{A) has erred in confirming the action of the AO in making addition in respect of payment towards Brand Promotion expenses by erroneously holding the assessee gained a new advantage of enduring nature, which conclusion is based on surmises and presumptions without any iota of evidence 6.5 The learned CIT{A) has erred in confirming the action of the AO in making addition in respect of payment towards Brand Promotion expenses, disregarding the various judicial decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneously relying on a decision which was on profit on sale of shares and distinguishable on facts, whereas there was no income element in the transaction of the assessee 8. Ground related to short credit of taxes 8.1 The learned CIT(A) has erred in not adjudicating on the ground raised by the assessee that the learned AO erred in not granting credit for tax deducted at source as claimed by the assessee in its return of income 9. Grounds related to demand of Dividend Distribution Tax 9.1 The learned CIT(A) has erred in not adjudicating on the ground raised by the assessee that the learned AO erred in raising a demand of Dividend Distribution tax on the assessee, without adducing any reason 10. Grounds related to additions to Book profit of amounts disallowed u/s 14A 10.1 The learned CIT(A) has erred in confirming the action of the AO in adding back to the book profit, the disallowance made u/s 14A, as was done in normal computation of income, ignoring the decisions relied upon by the assessee 11. The learned CIT(A) has erred in confirming the action of the AO in levying interest under section 234B/ 234C of the Act. The Assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the present AY also. The learned AR submits that the assessee has preferred appeal on the allowability of claim of depreciation before the Hon ble High Court of Karnataka in ITA No.61/2017 and the same is pending adjudication. The learned DR was duly heard. 6.4 In view of the above submission of the learned AR, ground No.1 (1.1 to 1.4) are rejected. Disallowance u/s 14A of the I.T. Act (Ground 2) (2.1 to 2.7) 7. The assessee had earned dividend income of Rs.19, 00, 000 in the previous year relevant to the impugned AY 2012-13. The assessee claimed the same as exempt under section 10(34) of the I.T. Act. The AO in the impugned assessment order has made disallowance of Rs.1, 31, 50, 663 under section 14A of the I.T. Act by invoking the provisions of Rule 8D of the Income-tax Rules, 1962 ( Rules ). The AO rejected the contention of the assessee that it had not incurred any expenditure in relation to income not includible in total income. 7.1 Aggrieved by the order of the A.O., the assessee raised this issue before the first appellate authority. The CIT(A) considered the submissions of the assessee and observed that the investments of the assessee for the AY 2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows:- 42. We have heard the rival submissions and perused the material on record. It is settled law that disallowance u/s. 14A cannot exceed the amount of exempt income earned by the assessee. The co-ordinate Bench of this Tribunal in the case of GMR Enterprises (supra) has held as under:- 3.4 We have heard rival submissions and perused the material on record. It is settled position of law that disallowance cannot exceed the amount of dividend income earned during the relevant assessment year. In this context, the following judicial pronouncements support the stand of the assessee:- (i) Joint Investments Pvt. Ltd. v. CIT (59 Taxmann.com 295) it was held that disallowance u/s 14A of the Act is to be restricted to the tax exempt income. (ii) Daga Global Chemicals Pvt. Ltd. v. ACIT [2015-ITRVITAT-MUM-123) has held that disallowance u/s 14A r.w. Rule 8D cannot exceed the exempt income. (iii) M/s.Pinnacle Brocom Pvt. Ltd. v. ACIT (ITA No.6247/M/2012) has held that disallowance u/s 14A cannot exceed the exempt income. (iv) DCM Ltd. v. DCIT (ITA No.4567/Del/2012) held that the disallowance u/s 14A of the Act cannot exceed the exempt income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese facts are akin to the case of Pragati Krishna Gramin Bank(2018) 95 Taxman.com 41 (Kar.) decided by Karnataka High Court. The legal position, as interpreted above by various judgments and again reiterated by us in this judgment, remains that the disallowance of expenditure incurred to earn exempted income cannot exceed exempted income itself and neither the Assessee nor the Revenue are entitled to take a deviated view of the matter. Because as already noted by us, the negative figure of disallowance cannot amount to hypothetical taxable income in the hands of the Assessee. The disallowance of expenditure incurred to earn exempted income has to be a smaller part of such income and should have a reasonable proportion to the exempted income earned by the Assessee in that year, which can be computed as per Rule 8D only after recording the satisfaction by the Assessing Authority that the apportionment of such disallowable expenditure under Section 14A made by the Assessee or his claim that no expenditure was incurred is validly rejected by the Assessing Authority by recording reasonable and cogent reasons conveyed to Assessee and after giving opportunity of hearing to the Assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) that the assessee had not deducted tax at source in respect of provisions created for expenses for the month of March and outstanding as on 31.03.2012. The total expenses quantified by the Auditor was Rs.36, 14, 498. Out of the year-end provisions of Rs.36, 14, 67, 498 made in the books of accounts according to the assessee, the amount of Rs.28, 79, 89, 551 did not require tax deduction at source. The tax was not deducted on the balance amount of Rs.7, 34, 77, 951, since according to the assessee, the payees were not identifiable. The assessee during the course of the proceedings before the AO had submitted that the taxes have been deducted and remitted before the due date of filing of the return of income and hence no disallowance is called for in respect of the expenditure. The AO disallowed the amount of Rs.8, 24, 77, 951 u/s 40(a)(ia) of the I.T. Act, which were yearend provisions reported in the Form 3CD. The AO disallowed amount of Rs.8, 24, 77, 951 instead of Rs.7, 34, 77, 951 and hence, a rectification application was filed by the assessee. The AO has disposed of the rectification application vide order dated 30.11.2016 and the disallowance has been restricted to Rs.7, 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling the return of income at pages 528 to 537 of the assessee s PB. In view of the above discussion and respectfully following the decision of the coordinate Bench of this Tribunal supra, we remand this issue back to the AO to verify the details of payments and tax deducted and allow the expenditure where the TDS is remitted to the Government account on or before the due date for filing the return of income. The assessee may be given a reasonable opportunity of being heard. 8.5 In view of the above order of the Tribunal in assessee s own case for assessment year 2013-2014, we remit the issue back to the files of the A.O. The A.O. is directed to comply with the directions of the Tribunal (supra) and take a decision on the issue after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly. Disallowance u/s 43B (Ground 4) (4.1 to 4.3) 9. The assessee during the relevant AY 2012-2013 did not remit statutory dues amounting to Rs.7, 63, 44, 091 before the due date of filing of return of income. The assessee accordingly added back a sum of Rs.7, 14, 16, 112 in the computation of income since the same was not allowable under section 43B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR further stated that the Tribunal in its recent decision for AY 2011-12 passed in ITA No.126/Bang/ 2020 (order dated 20.11.2022) has remanded the matter to the AO to verify and allow the claim of the assessee after taking into consideration the rectification order passed for AY 2010-11. The learned AR therefore prayed that direction may be given to the AO to verify if the CST and excise duty were claimed by the assessee by a debit to the P L account and if there is no debit, it is prayed that the AO may be directed to delete the addition under section 43B of the I.T. Act. 9.4 The learned DR supported the orders of the A.O. and the CIT(A). 9.5 We have heard rival submissions and perused the material on record. We find that on identical facts, the Tribunal in assessee s own case for assessment year 2011- 2012 in ITA No.126/Bang/2020 (supra), remitted the issue to the files of the A.O. The relevant finding of the Tribunal reads as follows:- 52. Vide Ground No.6 the plea of the assessee is that Rs.4, 60, 672 disallowed u/s. 43B is not justified since no such expenditure is claimed in the P L account. We notice that for AY 2010-11, for a similar disallowance, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions and perused the material on record. We find on similar circumstances, the Tribunal in assessee s own case for assessment year 2010- 2011 (supra) remitted the matter to the files of the A.O. with a direction to allow credit for the tax paid in foreign countries on the doubly taxed income in accordance with the provisions of section 90/91 r.w. Rule 128 based on the documents / evidences submitted by the assessee in this regard. The relevant finding of the Tribunal in assessee s own case for assessment year 2010-2011 (supra), reads as follows:- 13. We have heard the rival submissions and perused the material on record. Under the mercantile system of accounting, the income is to be offered to tax on accrual basis and therefore it is the gross income that needs to offered to tax in assessee s case here. However the assessee is entitled to claim credit for the tax paid on the doubly taxed income in accordance section 90/91 read with Rule 128 of the Income Tax Rules and in the given case, this fact is also held by the CIT(Appeals) that the assessee is entitled for credit for foreign tax paid. Though the assessee has not brought any new evidence on record before us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia has been discussed and the Tribunal has held that such brand promotion expenditure is revenue in nature and allowable as expenditure The learned AR therefore prayed that the payment of Rs.13, 76, 00, 000 paid to Force India is revenue expenditure and hence, the disallowance made by the AO deserves to be deleted. 11.4 The learned DR supported the orders of the A.O. and the CIT(A). 11.5 We have heard rival submissions and perused the material on record. Similar issue has been considered by the Tribunal in the case of United Spirits Limited for the AY 2013- 2014 in IT(TP)A No. 2701/Bang/2017 (order dated 05.04.2022) wherein it was held as under:- 12.6 We have heard rival submissions and perused the material on record. The AO disallowed the sales promotion and advertisement expenses totally amounting to Rs. 44, 33, 55, 403 [36, 91, 12, 995 + 7, 42, 42, 408] for the reason that these expenses are brand promotion expenditures of USL logo, it promotes the brand the assessee, gives enduring benefit and hence capital in nature. The DRP confirmed the action of the AO. 12.6.1 Similar issue has been considered by the Tribunal in assessee s own case for the AY 2012-13 in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the genuineness of expenditure, that the expenditure was incurred for availing infrastructure facilities administrative support, like manpower recruitment, HR services, uses of computer, telephone, photo copiers, infrastructure set up etc. in order to carryout business operations smoothly, that the parent company had allocated a certain amount to the account of the assessee in the ratio of its turnover. He finally held that expenditure had to be allowed as revenue expenditure. 3.2. Before us, the DR supported the order of the AO and the AR relied upon the order of the FAA. We find that the assessee group had entered into an agreement with India Win, that it was a co- sponsor of Mumbai Indian IPL team, that it had incurred similar expenditure in the subsequent two years, that out of the total expenditure the assessee had claimed a very small proportion under the head sponsorship expenses. Such an expenditure is for advertising the brand name of the Group. Being a recurring expenditure, it had to be allowed as revenue expenditure. We find that in the case of Delhi Cloth and General Mills Co.Ltd.(supra)the Hon'ble Court had held that expenditure incurred for organizing sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sively for the business of the assessee. 89. The learned counsel for the assessee submitted that the said disallowance was unwarranted since the said expense was incurred in view of the fact that major viewership of cricket is in the Indian subcontinent. He also referred to various newspapers reports which demonstrated the popularity of the sport in India to support the aforesaid contentions. It was also submitted that the assessee company has consistently promoted its range of products using cricket as an advertising platform. It was also to our notice that payment of sponsorship fees to ICC was remitted by the assessee after deduction of tax at source as instructed by the Income Tax Department. Further, the assessee had obtained the approval of the Ministry of Youth Affairs and Sports for sponsoring the events covered under the agreement. Copy of the order under section 195 of the Act and the approval received from the Ministry of Youth Affairs and Sports has been enclosed at pages 247 to 249 and 224 of the paper-book respectively. He further submitted that the expenditure was wholly and exclusively for the business of the assessee company and had not been disputed by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to be allowable as revenue expense is that, whether it has been incurred during the course of business and is for the purpose of business. Benefit factor to other related parties is relevant under transfer pricing provision and not while allowability of business expense u/s 37(1). It is well known fact that companies use sports event as a platform to advertise their range of products as it has a very high viewership. Any such incurring of expenditure is ostensibly for promotion of business only and hence, no disallowance is called for. Accordingly, Grounds No.7 to 7.3 in ITA No.1044/Del/2014 pertaining to A.Y. 2009-10 are allowed. 47. We notice that the co-ordinate benches are consistently holding the view that the expenditure incurred on sponsoring of sports events are intended to promote business only and hence the same is allowable as expenditure. The allowability of brand promotion expenses was examined by Hon'ble Delhi High Court in the case of Modi Revelon P Ltd (supra) and the relevant discussions made by the High Court are extracted below:- 22. As far as the second aspect, i.e. expenditure for promotion of the brand is concerned, there is no doubt that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confined to media propaganda but can involve indirect approaches. The judgment of a Division Bench of this Court in CIT v. Adidas India Marketing (P.) Ltd. [2010] 195 Taxman 256 (Delhi) has recognized that brand promotion exercises undertaken through media campaigns, schemes, programmes etc are essential for propagation of the brand. The necessity (or lack of it) is not something which income tax authorities can go into; as long as it is voluntarily undertaken by the business enterprise for profit earning, it would be entitled to claim relief under section 37(1). 23. In the present case, the AO was conscious of the fact that brand promotion expenses are a necessary ingredient in marketing strategies. Therefore, he allowed about 50 per cent of those expenses. However, the reasoning for disallowance of the rest, i.e. that the assessee could claim only a proportion of such expenses, since advertising expenses were to be borne by the sister concern dealer, and that the proportion was in respect of its territory, was not upheld. This Court does not see any fallacy in the Tribunal's approach or reasoning, on this aspect. One is not unmindful of the concerns of a business which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the respondent/assessee. It would be relevant to reproduce the relevant observation made by the Supreme Court, in the said judgment, which, in our opinion, support the case of the respondent/assessee to contend that the expenditure of Rs. 10 lakhs would be on revenue account. The relevant observation in the case of Empire Jute Co. Ltd. (supra) reads thus: 'The decided cases have, from time to time, evolved various tests for distinguishing between capital and revenue expenditure but no test is paramount or conclusive. There is no all embracing formula which can provide a ready solution to the problem; no touchstone has been devised. Every case has to be decided on its own facts, keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred. But a few tests formulated by the Courts may be referred to as they might help to arrive at a correct decision of the controversy between the parties. One celebrated test is that laid down by Lord Cave L.C. in Atherton Vs. British Insulated Helsby Cables Ltd. (1925) 10 Tax Cases 155 (HL), where the learned Law Lord stated : ...when an expenditure is made, not only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, the amount paid to the Trust was for the use of the court yard under the MOU for an indefinite future, and therefore, it would be on revenue account. In other words merely because the advantage may endure for an indefinite future would not mean that the expenditure would be on capital account and not revenue. The advance of Rs. 10, 00, 000/-, in the present case, consists merely in facilitating the assessee's business operations, enabling the management to conduct their Hotel business more efficiently and profitably. We are, therefore, satisfied that the view taken by the Tribunal in answering this question in favour of Assessee and against the Revenue is correct and deserve no interference by this Court. 49. Respectfully following the above cited decisions, we set aside the order passed by AO on this issue and direct him to allow the impugned sponsorship expenses as revenue expenditure. 12.6.2 Following the above order the ITAT in assessee s own case for assessment year 2012-2013 (supra), we allow deduction of sales promotion and advertisement expenses of Rs. 44, 33, 55, 403. As the entire expenses are allowed as revenue expenditure, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. The share exchange ratio as provided in para 11.3 of the Scheme was 33 equity shares of Re.1 each of the Assessee for every 16 shares of Rs.10/- each held in EBL. Accordingly, 60,07,413 shares of the Assessee were vested with the Trust 12.1 The Trust was to hold the shares of the assessee in trust together with all additions or accretions for the benefit of the Assessee subject to powers, discretions, rights and agreements contained in the Trust Deed (also clause 11.1 of the Scheme). The Trustees could sell, transfer or dispose of shares as such time and in such manner as deemed proper in accordance with the provisions of Trust Deed and the proceeds would be remitted to the Assessee. Thereafter, the obligations of the Trustees were to stand discharged and the Trust was to be terminated in accordance with the provisions of the Trust Deed. During the financial year 2011-12 (AY 2012-13), the Trust sold the entire shareholding in the open market and realized the market value of the shares being Rs.283.56 crore. With the sale of the shares, the object of formation of the Trust came to an end and the net proceeds of Rs.140.49 crore were transferred to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wned 50% of MAPL and hence had 50% ownership right in EBL at the time of approval of the Scheme). By this, the 50% shares of EBL were cancelled and Assessee had to allot the balance 50% shares of its company to itself having acquired MAPL. It was stated that as per the Companies Act, 1956, a company could not hold its own shares and it either has to cancel such share after allotment, in which case, its capital base gets eroded, or, the shares are parcelled out to any other entity (in the present case, the Trust) so that the value of the shares of the resultant company can be capitalized. It was submitted that the action taken by the assessee to allot the shares to the Trust was to protect the capital base and restructuring of the group companies only consolidated the capital base. The learned AR also submitted that it was a direct share holder in ABDL and MAPL where the shares were cancelled. EBL was 100% subsidiary of MAPL wherein, the holding of the assessee 50%. By this, the assessee has only 50% ownership right in EBL for which shares of the assessee were allotted to the Trust and the balance 50% shares were cancelled. Similarly, in MAPL, as per the Scheme, 50% of the share hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable in the hands of the assessee. iv) Having accepted the income as Capital Gains in the hands of the Trust, the Revenue could not have added the same as income, in the hands of the assessee, leading to double addition. v) The CIT(A) has refused to accept the approval of the Scheme granted by the Hon ble High Court on the specious statement that there was nothing on record to show that the copy of the Scheme was the same as was filed with the High Court, without raising the issue during the appeal proceedings and without asking for such a copy. vi) The CIT(A) has wrongly observed that the Hon ble High Court has not considered the tax implications in the Scheme, whereas there was no tax implication at all, to the transaction. vii) The CIT(A) invoked the principle of GAAR without even specifying whether and how GARR was applicable to the transaction whereas the principles of GAAR are not applicable to the transaction. viii) The CIT(A) has wrongly held as academic the fact that the Trust had shown capital gains in its return of income and the same has been accepted by the Department. ix) There are several instances, where on similar situations, various companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulted in capital gains. Since under both the arrangements, i.e., cancellation of its beneficial holding or under the Trust, there is no resultant capital gains that will be liable to tax, there is no question of painting the arrangement as colourable device. When the subject income has already been offered to tax by the Trust whereby exemptions have been claimed, the lower authorities have failed to establish the reason why the very same income has to be once again considered in the hands of a different assessee. Even if, for academic reasons, it were to be held that the income of the Trust is the income of the Assessee, given the provisions of section 10(38) of the I.T. Act, there is no reason why the benefit of the exemption cannot be extended to the assessee as well. The Hon'ble Supreme Court in the case of ITO v. Ch. Atchaiah (1996)218 ITR 239 (SC) has held as under with respect to taxation of right person: Under the 1961 Act, the Assessing Officer has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By 'right person' is meant the person who is liable to be taxed, according to law, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition is adhoc in as much as there is no reasoning given by the AO. The order passed by the AO dated 30.11.2016 under section 154 of the Act has not included the addition (page 404 of paper book). The assessee however out of abundant caution prays that the AO may be directed to delete the addition as the same does not relate to the facts of the issues related to the order u/s 143(3) passed for AY 2012-13. 14.2 We have heard rival submissions and perused the material on record. The A.O. is directed to examine the issue raised in the above ground and dispose of the matter after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly. Disallowance u/s 14A of the I.T. Act added to book profits (Ground No.10) (10.1) 15. The AO has made addition of Rs.1, 31, 50, 663 to the book profits being the disallowance made under section 14A of the Act. The CIT(A) dismissed the ground of the assessee by relying on the decision of this Hon ble Tribunal in Karnataka State Industrial Infrastructure Development Corporation Ltd (76 taxmann.com 360) and has upheld the addition of 14A disallowance to the book profits. 15.1 Aggrieved, the assessee is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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