Revenue appeal allowed on additions under section 154. Depreciation, disallowance issues remanded for fresh examination.

The appeal by the revenue challenging the Ld CIT(A)'s decision on additions made by the AO under section 154 of the Act for the assessment year 2013-14 was allowed. The Tribunal remanded the issues of depreciation and disallowance under section 14A back to the AO for fresh examination due to lack of opportunity for the assessee to present detailed breakup. The cross objection filed by the assessee regarding violation of natural justice was deemed irrelevant as both issues were remanded. The appeal by the revenue and the cross objection by the assessee were allowed for statistical purposes.

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Issues:
1. Revenue's appeal against Ld CIT(A)'s decision on additions made by AO under section 154 of the Act.
2. Assessee's cross objection regarding violation of principles of natural justice in AO's rectification order.

Analysis:
1. The appeal by the revenue challenges Ld CIT(A)'s decision on the additions made by AO under section 154 of the Act for the assessment year 2013-14. The AO initiated rectification proceedings under section 154 due to mistakes in the original assessment order, specifically related to depreciation and disallowance under section 14A of the Act. The Ld CIT(A) held that the additions were debatable and deleted them, leading to the revenue's appeal.

2. The cross objection by the assessee pertains to the alleged violation of principles of natural justice in the AO's rectification order. The assessee contended that the AO did not provide sufficient opportunity, but Ld CIT(A) rejected this claim. The Ld CIT(A) also deleted the additions by considering them debatable, leading to the cross objection by the assessee.

3. Regarding the depreciation issue, the Ld A.R. argued that the items claimed for higher depreciation were essentially computers and peripherals, despite being classified differently. The Ld D.R. contended that the assessee did not provide detailed breakup of items under the claimed categories, suggesting a higher rate of depreciation was wrongly applied. The Tribunal found the issue non-debatable but remanded it for fresh examination due to lack of opportunity for the assessee to present detailed breakup.

4. On the disallowance under section 14A, the Ld A.R. argued that investments were only in mutual funds, requiring no additional expenditure, and the disallowance was made to comply with the Act. The AO enhanced the disallowance using rule 8D(2)(iii) without sufficient opportunity for the assessee to explain. The Tribunal set aside the Ld CIT(A)'s decision and remanded the issue for fresh examination by the AO.

5. Both issues were remanded to the AO for re-examination, making the cross objection filed by the assessee irrelevant. The Tribunal emphasized providing proper opportunity for the assessee to be heard. Consequently, the appeal by the revenue and the cross objection by the assessee were allowed for statistical purposes.

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