TaxTMI 
TaxTMI 
2021 (2) TMI 449
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....e Act r.w.r. 8D of the Income-tax Rules, 1962. 3. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of disallowing deduction Rs. 3,50,00,000/- u/s. 35(1)(ii) of the Act. 4. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 5. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in levying interest U/S. 234A/B/C of the Act. 6. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in initiating penalty u/s. 271(1)(c) of the Act. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The first issue raised by the assessee vide ground nos. 1 & 2 is th....
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....r the purpose of investment. The assessee also reiterated that it has substantial interest free owned fund in form of capital and reserve which exceeds the amount of investment in shares. 6. However the learned CIT(A) confirmed the order of the AO by relying on the order of his predecessor for the A.Y. 2012-13 in the own case of the assessee. 7. Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us. 8. The learned AR before us filed a paper book running from pages 1 to 91 and submitted that the own fund of the assessee exceeds the amount of investment. Therefore there cannot be any disallowance of interest expense. Similarly, the ld. AR also contended that there was no satisfaction recorded by the AO before invoking the provisions of section 14A r.w.r. 8D of Income Tax Rule which was mandatory. The ld. AR reiterated the submission made before the lower authorities. 9. On the other hand, the learned DR before us submitted that the assessee failed to establish based on the documentary evidence that the borrowed fund was not utilized in the investments. The ld. DR vehemently supported the order of the authorities below. 10. We heard the rival cont....
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....0.4. Coming to the second fold of addition i.e. addition on account of administrative expenses, in this regard we note that the learned AR before us contended that the disallowance has been made by the AO without recording the satisfaction as provided under the provisions of section 14A read with rule 8D of Income Tax Rule. Accordingly, it was pointed out that there cannot be any disallowance of administrative expenses. However, we find that the AO has derived his satisfaction by raising a query for making the disallowance under section 14A read with rule 8D, which is reproduced as under: In the instant case, the explanation of the assessee company is not satisfactory and accordingly the method of determining amount of expenditure in relation to income not includable in the total income specified in the Rule 8D of the Income Tax rules 1962 is followed. 10.5. The ld. AR has also not submitted before us any details of the expenditure suggesting/justifying that no expenditure was incurred by the assessee in connection with the impugned exempted income. As such the onus lies upon the assessee to provide the documentary evidence that it has not incurred any expense against the exempt....
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....sagreed with the contention of the assessee and made the disallowance of the donation made by it by observing as under: 5. After considering the submissions of the assessee and on examination of materials/evidences available on record, I find that the whole transaction is not genuine. The DIT Kolkata has given a categorical finding after carrying out survey operation that the said organization was accepting the donation in cheque and returning the cash to the respective donors. In the reply to show cause notice, the assessee has denied having received any cash. However, for such return of cash there cannot be any operators/bogus billers were engaged in bogus donation syndicate. The aforesaid institution i.e. school of Human Genetics and Population Health accepted that they have facilitated the bogus donation in lieu of commission. Therefore, deduction deduction claimed by the assessee company to the tune of Rs. 3.50 Crore is disallowed and added to the total income of the Company. 13. Aggrieved assessee preferred an appeal to the learned CIT(A) who has also confirmed the order of the AO by observing as under: 6.3.4 As can be seen from above, the earlier notification declaring ....
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....of disallowance was the material gathered during the survey under section 133A of the Act at SHGPH but the same was not supplied as well as no opportunity of cross examination was provided to the assessee despite the specific request made to the AO. It is the settled law that there cannot be any addition/disallowances of the claim made by the assessee until and unless the materials on the basis of which the addition/disallowance was proposed, provided to the assessee for the rebuttal and cross-examination. In this regard we find support and guidance from the judgment of Hon'ble Supreme court in case of Maneka Gandhi vs. Union of India reported in AIR 1978 SC 597 wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order. We also take guidance and support from the order of the Hon'ble Supreme Court in case of I.C.D.S. Ltd. vs. CIT reported in 117 taxmann.com 723 wherein the Hon'ble court held as under: Be it noted that one of the issues involved is about not extending opportunity to the appellant to cross-examine the witnesses relied upon by the Assessing Officer. If the Department wants to rely on their evidence, it....