TaxTMI 
TaxTMI 
2025 (11) TMI 1668
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....it is submitted by the AO that the approval was taken from the Competent Authority for filing the appeal from Ld. Pr. CIT after following the new procedure and thus due to these reasons delay was occurred, He requested for condonation of delay. 3. Heard the contentions of both the parties and perused the material available on record. In the instant case, the order of Ld. CIT(A) was delivered through online on 03.02.2023 thus, it was served upon the assessee as well as on the AO on the very same day however, the appeal is filed by the revenue before the Tribunal on 08.07.2024 thus, it is delayed by 461 days. In the prayer filed, it is stated by the AO that he was preoccupied in heavy time barring issues and therefore, could not be able to file the appeal in time. It is further requested by the AO that this being the first occasion and it will not happen in future thus, delay be condoned. 4. Considering the submissions made by the AO, the delay is condoned and the appeal of the Revenue is admitted to decide on merits. ITA No.961/Del/2023 [Assessment Year : 2018-19] [Assessee's appeal] 5. First, we take the appeal of the assessee in ITA No.961/Del/2023 [Assessment Year ....
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....e Assessee has not provided copies of the set-aside assessment order passed by AO on a similar issue in the Assessee s own case for AY 2008-09 to AY 2010-11 pursuant to the orders of Hon'ble Tribunal. The Ld. CIT(A) has to appreciate that the copies of the said orders were submitted during the appellate proceedings and also re-iterated during the course of hearing through video conferencing. 6. That without prejudice to our rights, the addition of Rs 17,09,49,711/- is highly excessive and should be reduced substantially. 7. That in view of the facts and circumstances of the case and in law the order passed by AO as upheld by Ld. CIT(A) are incorrect, illegal bad in law and based on surmise and conjectures. 8. That the documents, explanations filed by the assessee and the material available on record has not been properly considered and judicially interpreted and have been wrongfully ignored. 9. That the AO and Ld. CIT(A) did not grant a proper and sufficient opportunity to the Assessee to present its case and adduce all the evidences in its favour on the issue of addition under Sec 14A. 10. Without prejudice, the disallowance made un....
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....disallowance could be made. 10. With regard to the satisfaction, reliance is placed on the orders of Co-ordinate Bench of Mumbai Tribunal in the case of Piem Hotels Ltd. vs DCIT in ITA No. 4338 & 4339/Mum/2023 dated 08.05.2024 wherein Co-ordinate Bench has held that AO should record his satisfaction as to why the claim of the assessee is not correct according to him on verification of the financials of the assessee as provided u/s 14A(2) of the Act. 11. Ld.AR for the assessee also submits that in preceding years, disallowance of similar nature was made which stood deleted by Coordinate Bench and thus, following the principal of consistency, the disallowance made in this year should be deleted. He prayed accordingly. 12. Per contra, Ld. CIT DR for the Revenue supports the orders of the lower authorities and submits that amendment was made in Rule 8D of the Rules w.e.f. 01.04.2016, according to which upon satisfied about the correctness of the claim of expenditure, the disallowance u/s 14A would be aggregate of the expenditure directly relatable to earning exempt income and 1% of the average investment i.e. monthly average of opening and closing value of investment, income f....
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....an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act : Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001. Explanation.-For the removal of doubts, it is hereby clarified that notwithstanding anything to the contrary contained in this Act, the provisions of this section shall apply and shall be deemed to have always applied in a case where the income, not forming part of the total income under this Act, has not accrued or arisen or has not been received during the previous year relevant to an assessment year and the expenditure has been incurred during the said previous year in relation to such income not forming part of the total income." 14. Rule 8D of the Rules as amended w.e.f. 01.04.2016 is as under:- "8D: Method for determining amount of expenditure in relation to inco....
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.... however, in the instant case as observed above, the AO in categorical terms has not only examined the financial statements of the assessee but also considered the expenses claimed and then reached to the conclusion that claim of the assessee of having expenditure of INR 49,51,789/- incurred to earn such exempt income is incorrect and thereafter, he proceeded to re-compute the expenditure relatable to earn such exempt income in the manner as provided in Rule 8D of the Rules. Under these circumstances, we inclined to interfere in the order of the lower authorities with respect to the satisfaction recorded before invoking the provision of section 14A r.w. Rule 8D of the Rules. 16. Now coming to the amount of disallowance, as stated above, in Rule 8D, the disallowance should be the aggregate of the amount directly or indirectly related to income which does not form part of the total income added by the amount equal to 1% of monthly average of the opening and closing balance of the value of the investments, income from which does not or shall not form part of the total income. From the perusal of the assessment order, we find that AO has taken 1% of the average value of total income....
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....he surcharge income has been offered to tax. The relevant observation in para 5 to 7 of the order of Co-ordinate Bench of Tribunal is reproduced as under:- 5. "Learned counsel for the assessee has pointed out that in so far as the issue of taxability of surcharge income is concerned, the issue is squarely covered by the judgment of Hon'ble Punjab & Haryana High Court in ITA No. 209 of 2014 dated Ist of April 2014 in the case of CIT vs. Dakshin Haryana Bijli Vitran Nigam Ltd., Hissar wherein the Hon'ble High Court while affirming the order of ITAT has observed as under: "The question that calls for an answer, in the facts of this case, is whether surcharge for delayed payment reflected in the bills raised by the assessee and its accounts, would invite payment of a tax dehors recovery/payment/receipt of surcharge. The Assessing Officer, took a view that a surcharge levied upon delayed payments of bills is reflected in the bills and the accounts of the assessee, the fact that the surcharge may or may not be paid or recovered or may eventually be waived, is entirely irrelevant as the assessee maintains a mercantile system of accounting. Aggrieved by t....
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....es the facts may vary, therefore, basic principles of accrual or mercantile system as laid down by various authorities are to be applied in a careful manner. The assessee being a sate PSU; the surcharge on delayed payment being disputable item; was not mandatorily payable at the time of payment of electricity consumption bill; was not an accrued receipt in view of the accounting policy accepted by the revenue. Therefore, such amount of surcharge cannot be held to be taxable as it is not the real income of the assessee and is hypothetical by nature in given facts and circumstances. In view of the foregoing, we are of the view that the amount of surcharge not realized by the assessee, does not amount to accrued of receipt taxable as income, CIT(A) has rightly deleted the addition, which we uphold." We have duly considered arguments but are unable to accept the contentions advanced by counsel for the appellant. Admittedly Rs. 2,25,18,23,535/-was added by the assessing officer as reflecting levy of surcharge on delayed payment of bills. Admittedly, this amount has neither been paid nor recovered by the assessee. Admittedly, the surcharge is a disputable item and may a....