2023 (3) TMI 465

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....he following grounds of appeal: "A) The Ld. PCIT-(1) has failed to appreciate that the matter in question has been considered by the Ld. AO at the time of Scrutiny proceedings and erred in passing the order u/s 263, of the Income Tax Act, 1961 and opening the matter for revision. B) For that, your petitioner craves the right to put additional grounds at the time of appeal." Brief facts of the case : 2. The Assessing Officer(AO), ld.ACIT, Nanded Circle had passed an assessment order under section 143(3) of the Act, on 06.06.2016 accepting the Return of Income(RoI) filed by the assessee. The AO has not discussed anything in the order except Gross Profit of the assessee. The ld.Pr.CIT, Aurangabad issued notice under section 263 of the....

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.... income during the year. Therefore, there is no question of disallowance under 14A of the Act. The ld.AR also submitted that reduction in share application money was due to refund of share application by the assessee. The ld.AR filed a paper book. The ld.AR relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Max India Limited. The ld.Departmental Representative(ld.DR) Submissions : 5. The ld.DR relied on the order of the ld.Pr.CIT, Aurangabad. The ld.DR specifically stated that AO has not carried out any enquiry with reference to the issues mentioned by the ld.Pr.CIT in the order. The ld.DR took us through the paper book filed by the assessee which contains submissions made by the assessee before the AO during the ....

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...., it is observed that assessee has not answered or provided any information regarding the impugned issues. It is also an admitted fact by the assessee that inadvertently excess depreciation has been claimed, which is one of the impugned issues. Computation of taxability under section 115JB is affected by excess depreciation claim. Therefore, to the extent of Computation of Taxability under section 115JB and excess depreciation, there is no doubt that the assessment order is erroneous and prejudicial to the interest of the Revenue. As far as other issues are concerned, we have already mentioned that AO had not carried out any enquiry and assessee has also not made any submissions regarding the remaining issues mentioned in the order under se....

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....to income not includible in total income. As per sub-section (1) of section 14A, for the purpose of computing the total income, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income. In Cheminvest Ltd. (supra) Delhi High Court examined the expression "does not form part of the total income" as appearing in sub-section (1) of section 14A of the Act. Delhi High Court held that the said expression envisages that there should be an actual receipt of income which is not includible in the total income during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. It was clarified that section 14A....