TaxTMI 
TaxTMI 
2022 (7) TMI 1162
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....lant Tribunal (hereinafter referred to as 'ITAT') in ITA No. 1539/Del/2016 for assessment year 2011-12. 2. The facts giving rise to the present appeal are that during the course of assessment proceedings initiated by the Assessing Officer (hereinafter referred to as 'AO') under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'), the AO made an addition of Rs. 2,50,000/- under Section 14A of the Act read with Rule 8D(2)(iii) of the Income Tax Rules, 1962. The assessee opposed the aforesaid addition on the ground that since no exempt income was earned during the relevant assessment year there cannot be any disallowance, which plea was not accepted by the AO. The AO had then relied upon the CBDT Circular No. 5/2....
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....The ITAT also placed reliance on a CBDT Circular No. 14(XL-35) dated 11th April, 1955 to note that it is the obligation of the assessing officers to make the assessee aware about any refund or relief which may be due to the assessee and not to take advantage of the ignorance of the assessee of its rights. 6. Therefore, the ITAT held that the additional ground raised by the assessee cannot be excluded from consideration as the issue to be determined is whether the amount of subsidy is taxable or not? The ITAT held that this issue has to be decided by the appellate authority notwithstanding the fact that the assessee has suo moto offered the amounts for taxation already. The ITAT accordingly concluded that the assessee is eligible to raise a....
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.... Shree Balaji Alloys vs CIT (supra) has allowed the Excise Duty, Subsidy and Interest Subsidy to be treated as capital receipts. 9. The ITAT has also allowed the ground raised by the assessee to claim education cess as an allowable expenditure by relying upon the CBDT Circular no. 91/58/66-ITJ(19).While allowing the said claim on account of education cess, the ITAT relied upon the decisions of the coordinate bench as well as the judgment of the High Court of Rajasthan in ITA No. 52/2018 in the case of Chambal Fertilizers and Chemicals Ltd. 10. In the aforesaid manner, the ITAT by its order granted the following reliefs to the assessee:- a) Deleted the disallowance made by the assessing officer under Section 14A of the Act read with Rule....
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.... order, the ITAT has given detailed reasoning for permitting the additional ground after relying upon the judgments of the Supreme Court, the CBDT Circular and the history of the legislative provision of Section 143 (3) of the Act. Pertinently, no submission has been advanced by the department on the merits of the claim of subsidy allowed by the ITAT. The decision of Supreme court in Kedarnath Jute Manufacturing Co. Ltd. V. Commercial Tax Officer, AIR 1996 SC 12 is an authority for the proposition that tax authorities and adjudications as well as assessee are not precluded by the positions taken in returns, documents or accounts and have the duty (and a corresponding right) to apply the correct legal principle. As noted above, no facts on m....