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| The Tax Publishers2019 TaxPub(DT) 4453 (Del-Trib) INCOME TAX ACT, 1961
section 14A
Where assessee submitted that no borrowed funds have been utilized for making the investment and no new investments have been made during the year, therefore, in the interest of justice, matter was remanded back to AO with a direction to verify the records properly after giving a reasonable opportunity of being heard to the assessee.
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Disallowance under section 14A - Expenditure incurred against earning of exempted income - Assessee had suo moto disallowed expenses -
Assessee, a NBFC, filed its return of income declaring loss. AO during the course of assessment proceedings compared the balance sheet as on 2014 and 2015 and noted that company had shown to have invested its funds in equity shares. However, assessee had suo moto disallowed an expenses which have been incurred to carry out the activity of investments and earning of exempt income. After deducting the disallowance made by the assessee itself, AO made addition to the total income of assessee under section 14A rule 8D which was confirmed by CIT(A). Held: AO while making the disallowance had given a finding that investment in shares and securities have been made out of borrowed funds. Assessee submitted that no borrowed funds have been utilized for making the investment and no new investments have been made during the year. In the interest of justice, matter was remanded back to AO with a direction to verify the records properly after giving a reasonable opportunity of being heard to the assessee
Followed:Maxopp Investment Ltd. v. CIT, New Delhi and Pr. CIT-I v. D.B. Corp Ltd. (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC) Pr. CIT-4 v. Sintex Industries Ltd. in (Tax Appeal No. 268 of 2017, dt. 4-5-2017) : 2017 TaxPub(DT) 1707 (Guj-HC)
REFERRED :
FAVOUR : In assessee's favour by way of remand
A.Y. :
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