TaxTMI 
TaxTMI 
2026 (7) TMI 1212
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.... the 'Ld. AO') order passed under section 143(3) of the Act date of order 30.03.2015, 22.03.2016, 26.12.2016 and 28.12.2016 for A.Y. 2011-12, A.Y. 2012-13 A.Y. 2013-14 and A.Y. 2014-15 respectively. 2. Since all the appeals pertain to the same assessee and arise from common issues, they were heard together for the sake of convenience and are being disposed of by this consolidated order. ITA No. 5416/Mum/2025 filed by the revenue and CO No. 283/Mum/2025 filed by the assessee are treated as the lead matters. Further, the issues involved in ITA Nos. 5417/Mum/2025 and 5214/Mum/2025 are also considered along with the lead case, and the decision rendered therein shall apply mutatis mutandis to the connected appeals. 3. ITA No. 5416/Mum/2025, A.Y. 2011-12 The revenue has taken the following grounds: "1) Whether, on the facts and in the circumstances of this case and in law, the learned CIT(A) erred in reducing the disallowance made under Section 14A from Rs. 4,93,97,255 to Rs. 3,04,72,187. The CIT(A) failed to appreciate that the AO had correctly recorded dissatisfaction with the assessee's suomotu disallowance and was therefore mandated by law to apply the provision....
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....laim under Section 80IC. 7) Whether, on the facts and in the circumstances of this case and in law, the learned CIT(A) erred by relying on the remand report without a critical examination of the facts. While the AO's remand report may not have contained adverse remarks on all explanations, it did not constitute an outright confirmation or acceptance of the assessee's unsubstantiated claims regarding the profitability difference. The CIT(A) should have independently assessed the veracity of the explanations furnished. 8) Whether, on the facts and in the circumstances of this case and in law, the learned CIT(A) failed to appreciate that the assessee did not provide verifiable data to support its generalized explanations such as lower freight, excise exemption, and cheaper manpower in Himachal Pradesh. The burden of proving the correctness of the deduction claim rested with the assessee, which it failed to discharge." 4. CO No. 283/Mum/2025, AY 2011-12 The assessee has taken the following grounds: "Ground No. 1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. Assessi....
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....has taken the following grounds: "Ground No. 1: On the facts and in the circumstances of the case and in law, the order passed by the Commissioner of Income-tax (Appeals), the National Faceless Appeal Centre. Delhi (the Id. CIT (A)) undersection 250 of the Income-tax Act, 1961 ('the Act') erred in making addition of INR 11,82,47,812 to the total income of the Appellant. Ground No. 2: Disallowance of Marked to Market loss 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the Learned Assessing Officer (the Ld. AO') in disallowing marked to market loss of INR 7,99,81,196 arising on account of outstanding forward foreign exchange contract as on year end. Ground No. 3: Disallowance under section 14A of the Act 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of the Ld. AO in disallowing an amount of INR 3,53,51,651 undersection 14A of the Act read with Rules 8D of the Income Tax Rules, 1962 ('the Rules'). Without prejudice to the above, the Ld. CIT(A) and the Ld. AO failed to ap....
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....isallowance made under section 14A of the Act and deleted the remaining additions. Aggrieved by the impugned appellate order, both the assessee and the revenue have preferred appeals before us. 8. The Ld. DR advanced arguments and filed written submissions on each ground of appeal. The relevant submissions are reproduced below:- "Brief Facts of the case: The company Crompton Greaves Limited officially renamed itself from Crompton Greaves Limited to CG Power and Industrial Solutions Limited effective from 27-02-2017. The assessee filed original return of income for A.Y. 2011-12 on 30.9.2011 by declaring a total income of Rs. 732,12,24,306/-. The appellant filed the revised return of income u/s. 139(5) on 30.03.2013 wherein the total income was declared at Rs. 695,04,26,486/-. The revised return was processed U/s. 143(1) dated 23.10.2013. Subsequently, the case was selected for scrutiny and notice U/s. 143(2) was issued to the appellant. A reference was made to TPO for computation of Arm's Length Price (ALP) in relation to international transactions of the appellant. An order U/s. 92CA (3) was passed by the TPO, wherein no adjustment to ALP was sugge....
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....lso submitted before the Learned AO that the Appellant Company has suo moto made disallowance u/s. 14A amounting to Rs. 1,68,85,115/- based on the decision of ITAT in respect of the appellant for AY 1998-99. iv. The learned AO has disallowed Rs. 6,62,82,370/- of the Income Tax Act r.w. rule 8D on account of indirect interest and expenses under Rule 8D(2)(ii) and (iii). 7. Decision of the Ld. CIT(A): The CIT(A) has partly allowed the assessee's appeal by reducing the disallowance made under Section 14A from Rs. 49397255 to Rs. 3,04,72,187/The CIT(A) accepted the assessee's working of disallowance at Rs. 2,93,11,481/-. which the assessee had submitted during the assessment proceedings. Further the CIT (A) added a direct expense of Rs. 11,60,706/- (being salary cost of the Treasury Manager), and made total disallowance u/s. 1-4A of Rs. 3,04,72,187/. 8. Comments of A.O 8.1 The assessee has challenged the disallowance of Rs. 4,93,97,255/- (Rs. 62,82,370-Rs. 1,68,85,115/-) made under section 14A read with Rule 8D of the Income-tax Rules, 1962, against the suomotu disallowance of Rs. 1,68,85,115/- made in the revised return of ....
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.... made. 8.9. This is more so considering the explanation added to section 14A by the Finance Act, 2022 w.e.f. 01.04.2022. The explanation clarifies that the section 14A shall apply and shall be deemed to have always been applied even if income has not arisen during the year. It means disallowance u/s. 14A has to be made even if there is no income from the investment during the year. Further the language that 'shall be deemed to have always been applied enables application of this section retrospectively on the issue of 14A disallowance even when no income is earned from the investment during the year. Therefore, in view of the above discussion and the CBDT circular no. 9/2024 dated 17th September 2024, the decision of the CIT (A) is not acceptable on this ground and further appeal before Hon'ble ITAT is recommended. Tax Effect :Rs. 1,64,08,533/- 9. Ground No. 3. The learned Assessing officer, invoked the provision of section 80-IC(7) rws 80-FA(8) for calculating deduction eligible for section 80IC. He apportioned profits to the eligible unit based on the working as given below Particulars Baddi- Unit No. 1 Baddi Unit No. 2 Over....
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.... remand proceedings and have furnished the requisite details called for by the AO from time to time. The AO also had examined the additional evidences and submissions and analyzed the issue concerning 80IC deductions. The appellant had further stated that the AO in the remand report had confirmed that he has verified the claims of the appellant made in the appeal as well as in the remand proceedings. The submission of the appellant as well as remand report of the AO has been analyzed with materials available on record. The appellant company is a multi-product company which manufactures both industrial and domestic electrical goods. It is considered that the comparison of profitability of the eligible fan units at Baddi, Himachal Pradesh, with the profitability of the appellant company as a whole, is not appropriate. However, such comparison suffers from a fundamental flaw of comparing two incomparable. The market conditions as the demand-supply position, price elasticity, level of competition, the consumer behavior, the cost structure etc., differ from one product to another and the said factors have a bearing on the profitability of the products. Therefore, the profitabil....
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....alized explanations such as lower freight, excise exemption, and cheaper manpower in Himachal Pradesh, but did not substantiate these with verifiable data. f. The assessee has not at all allocated the expenses under "After Sale Services including warranties" debited to overall P&L account. g. The assessee did not demonstrate that goods or services were transferred at fair market value or that the eligible unit's profits were computed independently of the benefits derived from the larger corporate ecosystem h. While the AO submitted a remand report without adverse comments on some explanations furnished, it was never a confirmation of full acceptance of the assessee's claims. In view of the above, the decision of the CIT (A) is not acceptable on this ground and further appeal before Hon'ble ITAT is recommended. Tax Effect: Rs. 2,29,95,157/- 12. Ground No. 4 During the year the company has claimed deduction on account of Reversal of liquidated damages amounting to Rs. 9,09,00,000/- credited to Profit & Loss Account. The reversal of provision was not offered for tax as the provision for liquidated damages was disal....
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....chargeable U/s. 234D is consequential in nature and the AO is directed to verify the same and compute the interest if applicable, as per law 20. Comments of AO: The decision of the CIT (A) is acceptable on this ground as the CIT (A) has stated that interest chargeable U/s. 234D is consequential in nature and the AO is directed to verify the same and compute the interest if applicable, as per law. Hence no further appeal is recommended on this ground. Further CIT (A) has stated that during the appellate proceedings, the appellant did not press upon the addition made for reversal of MTM loss of AY 2010-11 claimed as not taxable in revised return of AY 2011 12 to the extent of Rs. 10,25,34,050/- and hence the same is not adjudicated. 21. It is submitted that considering the above-mentioned facts further appeal to Hon'ble ITAT is recommended on the above mentioned issues. Further, Overall tax effect involved in above mentioned issues are Rs. 39,403,690/- Which is above the prescribed monetary limits as specified vide CBDT circular no. 9/2024 dated 17.09.2024." Ground No. (1) to (3) :- disallowance u/sec. 14A of revenu's appeal 9. The assess....
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.... 6.5. During the appellate proceedings, the appellant submitted a copy of ITAT order for AY 2009-10 in ITA No. 5295/Mum/2017 dated 27.09.2019. The Hon'ble ITAT, Mumbai Bench in order dated 27.09.2019 in appellant's own case held as under, "Before us, the decisions of the Hon'ble Jurisdictional High Court in the case of SBI DHFL Ltd (2015) 316 ITR 296 and Commissioner of Income-Tax vs. HDFC Bank Limited 11 (2014)366 ITR 505(Bom) though not been controverted at the hands of the assessee, much less successfully, wherein, the Hon'ble Jurisdictional High Court has held to the fact that it would be presumed that the investments to the extent of the owners funds or out of interest free funds and that no disallowance u/s. 14A read with Rule 8D(2)(ii) can be made. However, on facts similar to those doing the rounds for the year under consideration, in the assessee's own case, for AY 2008-09, the tribunal vide this order dated 17.10.2014 passed in ITA No. 6167/Mum/2012, has held that the investments in shares of the subsidiary companies shall not be included in the value of the average investments for the purpose of Rule 8D. The above submission ....
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....interest expenditure under rule 8D (2) (ii) of IT rules. Since this decision has been rendered by Ld. CIT(A) following the binding decision of jurisdictional High Court, we uphold the same." 12. We heard the rival submissions and considered the material available on record. On perusal of the balance sheet of the assessee, we find that the share capital and reserves stood at approximately Rs. 2,304 crores, whereas the investments in shares and units aggregated to Rs. 782 crores. Thus, the investments made by the assessee were substantially lower than its own interest-free funds. In such circumstances, a presumption arises that the investments were made out of the assessee's own funds and not from borrowed funds. Further, we respectfully follow the decision of the Coordinate Bench of the ITAT, Mumbai, in the assessee's own case on an identical issue. Accordingly, we find no infirmity in, nor any reason to interfere with, the impugned appellate order on this issue. Therefore, the grounds raised by the revenue stand dismissed. Ground No. (4) of the revenue's appeal & Ground no. 1 of the assessee's CO 13. Related to re-computation of disallowance u/sec. 14A read with Rule 8D(2)....
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....ssing officer has discussed in detail with regard to the contentions of the assessee that it did not incur any expenditure in earning exempt income. Though the AO has not specifically stated that he was not satisfied with the contentions of the assessee, yet his dissatisfaction is discernible from the discussions made by him in the assessment order. Hence the AO has proceeded to make disallowance under rule 8D of IT rules. Accordingly, we are of the view that the dissatisfaction of the AO is discernible from the discussions made by him in the assessment order. Accordingly we reject this contention of the assessee. 10. The assessee, in its written argument, has submitted that some of the dividend income received by it is taxable and the AO has not excluded the same. We noticed that the Learned CIT (A) has directed the AO to consider only those investments which have yielded exempt income for the purpose of computing average value of investments. Accordingly, if any income is taxable (not exempt), it will not enter computation of average value of investments. Hence this grievance of the assessee would automatically be addressed while computing average value of investments as....
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....assessee's case is no such condition for invoking provision u/sec. 80IA(8) of the Act. The Ld. AO only restricted the deduction u/sec. 80IC amount to Rs. 9,94,00,872/-. The aggrieved assessee filed an appeal before the Ld. CIT(A). and the Ld. CIT(A) has called the remand report and the assessee had submitted all the relevant supporting evidence in the said remand proceedings. Finally, the remand report submitted by the Ld. AO which is duly adopted in the impugned appellate order. The relevant part of the remand report containing APB page 235 to 238 is reproduced: "To, The Commissioner of Income Tax (Appeals)-12, 3rd Floor, B Wing, Mittal Court, Nariman Point, Mumbai. (Through Proper Channel) Sir, Sub: Remand report in the case of M/s CG Power and Industrial Solutions Limited (formerly known as M/s Crompton Greaves Limited) for AY 2011-12, PAN: AADCC9080C reg.- Ref: Letter No. CIT(A)-12/Remand Report/2018-19 dated 10/05/2018 Kindly refer to the above. 2. As directed, the case records of the assessee company have been perused. The assessee is having section 80-IC eligible unit being FAN Division....
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....ich are inclusive of other Divisions and Fan Division which includes section 80IC eligible and 80-IC non eligible units. Further to this, in the submission vide letter dt 14/05/2019 filed by the assessee during the remand proceedings it is submitted by assessee as in respect of Corporate expenses of Rs. 64,85,19,592/, these are extracted out of audited financial statements by the statutory auditors of the company for the FY 2010-11. 2.3 Further the assessee has filed following justification for non-allocation of Corporate Expenses, extracted as (i) Eligible Baddi Unit is geographically far flung and it works with minimum support from Corporate Office (ii) eligible unit works on standalone basis which works under Unit Head who is authorised to take decisions. (iii) the Corporate Function formulates in the policies in the light of framework decided by the Board of Directors and regulatory framework. They give support to all the units/divisions/regions throughout the organisation and not specifically to eligible units. (iv) interest on loans for eligible units is charged to the eligible units for arriving the profits eligible for deduction. (v) as per para no. 6 on page 21, i....
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.... heavy engineering products do not have any relation to the manufacturing & sale of Fans; further that, without prejudice it is submitted that the sales of the qualifying unit constituted just about 2.00% of the total sales of the company and even where the expenditure was to be apportioned on the basis of sales it could not have been more than Rs. 3 Cr. The claim is verified from the P&L A/c. 2.6 As regards R & D Expenses, the assessee has submitted that for Fan Division, it has incurred Rs. 71.16 Lacs comprising of Capital Expenditure of Rs. 0.14 lakhs and Revenue Expenditure of Rs. 0.57 lakhs. (Enclosed Annx-A) That the revenue expenditure comprises of salary of employee in R&D activity. Further, it is stated that the R&D expenses were not allocated to 80-IC Eligible Fan Unit and that, these were also not allocated to any other division of the company. The contention is verified as appearing in this regard in the Auditor Certificate dated 18/07/2011 submitted by the assessee during the remand proceedings enclosed herewith as Annexure -A. The assessee company has shown a total turnover of Rs. 5951.47 Crores for the company as a whole for the current year, break-up of it ....
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.... and principle re-judicata is not applicable in the income-tax proceedings. Accordingly, it is submitted to decide the issue on merits." 16. The Ld. CIT(A) had considered this issue in favor of the assessee and made the following observations which is reproduced a below: "6.8. On receipt of the remand report from AO, a rejoinder was called for from the appellant from this office. In response to the same, the appellant had submitted that, it had appeared before the AO during the remand proceedings and have furnished the requisite details called for by the AO from time to time. The AO also had examined the additional evidences and submissions and analyzed the issue concerning 80IC deductions. The appellant had further stated that the AO in the remand report had confirmed that he has verified the claims of the appellant made in the appeal as well as in the remand proceedings. 6.9. The submission of the appellant as well as remand report of the AO has been analyzed with materials available on record. The appellant company is a multi-product company which manufactures both industrial and domestic electrical goods. It is considered that the comparison of profitabilit....
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....higher than that of the non-eligible units. However, during the appellate proceedings, the assessee furnished detailed explanations along with supporting documentary evidence explaining the higher profitability of the eligible unit, inter alia, on account of lower material cost, lower labour and staff cost, savings in freight expenditure due to proximity to the North Indian market, and the independent functioning of the eligible unit. We further note that the Ld. CIT(A) called for a remand report from the Ld. AO and all relevant details and additional evidences were duly examined during the remand proceedings. Significantly, although the Ld. AO discussed various aspects in the remand report, no specific defect was pointed out in the books of account maintained by the assessee nor was any adverse finding recorded to dislodge the explanation furnished by the assessee regarding the profitability of the eligible unit. The Ld. CIT(A), after considering the remand report and the assessee's rejoinder, rightly observed that comparison of the profitability of the eligible fan unit with the profitability of the company as a whole was fundamentally flawed, since the assessee is a multi-produc....
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....he prescribed authority quantified the eligible expenditure at Rs. 56,06,84,000/- towards capital expenditure and Rs. 32,04,57,000/- towards revenue expenditure incurred on the approved in-house research facility. It was contended that while the capital expenditure approved by the DSIR was higher than the amount claimed by the assessee, a difference of Rs. 3,22,32,195/- arose in respect of revenue expenditure. The Ld. AR argued that section 35(2AB)(1) of the Act does not mandate that every expenditure eligible for weighted deduction must necessarily be incurred physically within the approved in-house research facility. According to the assessee, certain expenditures such as product testing charges, consultancy charges and expenses incurred in connection with the development of new products are intrinsically related to the approved research and development activities and qualify for weighted deduction, even if such activities are carried out outside the approved facility. It was submitted that denying weighted deduction merely because such expenditure was incurred outside the premises of the in-house research facility would defeat the very object and legislative intent underlying se....
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....nt for allowable deduction. The claim of the assessee to the extent of Rs. 35,26,89,195/- is not disputed but the extra weighted deduction is limited to Rs. 32,04,57,000/-. The case laws relied upon by the assessee are inapplicable owing to the distinguishable facts. In view of this, a sum of Rs. 3,22,32,195/- is added in total income of the assessee. Penalty proceedings under section 271(1)(c) of the act are separately initiated for concealment of particulars of income/ furnishing inaccurate particulars of income." 21. The Ld. AR contended that the said issue was already decided in favor of the assessee by the Coordinate Bench of ITAT Mumbai in assessee's own case ITA No. 5295, 5390/Mum/2017 for A.Y. 2009-10 date of pronouncement 27.09.2019. the observations of the Bench contained in relevant paragraph nos. 8 to 17 are reproduced as below: "8. It is seen that as rightly contended on behalf of the assessee, section 35 of the Act grants deduction for Scientific Research expenditure, under the circumstances prescribed there-under, on compliance of the conditions laid down in various provisions of section 35. Now, whereas in some cases, like those coming under the provisio....
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....cribed. (5) [***] (6) No deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2008. 9. The operative phrase here is "on in-house research and development facility as approved by the prescribed authority.......", the word "facility" has been hereby show us to emphasis the point that it is the unit which requires approval of the prescribed authority under this provision. Further, in the memorandum, explaining the provision of section and the notes on the clauses issued at the time of insertion of section 35(2AB) in the Act, copies of both of which have been filed on record before us by the assessee, it has been clearly provided that the deduction would be available to the assessee's having an approved in-house R & D facility by the prescribed authority. Undisputedly, there is no mention or approval of the quantum of expenditure. 10. Then, as observed by the Ahmedabad Bench of the Tribunal in the case of Sun Pharmaceutical Industries Ltd. Vs. Pr.CIT (2017) 162 ITD 484 as approved by the Hon....
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....ment facility by the company during the previous year and eligible for weighted deduction under sub-section (2AB) of section 35 of the Income Tax Act, 1961 in Part B of Form No. 3CL" 13. Hitherto, the provision was as follows: "The prescribed authority shall submit its report in relation to the approval of in-house facility and development facility in Form No. 3CL to the Director General (Income-tax Exemptions) within sixty days of its granting approval." The above also makes it amply clear that prior to the amendment, i.e., upto 30.06.2016, it was not required to quantify the expenditure and it was only w.e.f. 01.07.2016 that this mandate has been put in place. 14. The year under consideration is A.Y. 2009-10 and, for this year, the amendment was not applicable. Therefore, the assessee is right in contending that the non approval of the expenditure claimed by CSIR did not entitle the A.O. to make the disallowance and the Id. CIT(A) to confirm the same. This does also take care of a without prejudice contentions raised by the assessee, to the fact that deduction of actual expenditure of Rs. 28,34,688/- be allowed to the assessee under the provisi....
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....n Form No. 3CL. The Ld. AO proceeded on the premise that the amount mentioned in Form No. 3CL is the sole determinant for allowing deduction under section 35(2AB) of the Act. However, we find that this issue is no longer res integra and stands squarely covered in favour of the assessee by the decision of the Coordinate Bench of the ITAT, Mumbai, in the assessee's own case for A.Y. 2009-10 in ITA Nos. 5295 & 5390/Mum/2017 dated 27.09.2019. The Coordinate Bench, after considering the provisions of section 35(2AB), Rule 6(7A), Form No. 3CL and various judicial precedents, held that prior to the amendment brought in with effect from 01.07.2016, the prescribed authority was only required to approve the in-house R&D facility and not to quantify the eligible expenditure. It was further held that non-approval or lower quantification of expenditure by the DSIR in Form No. 3CL could not be a valid ground for curtailing the deduction otherwise allowable under section 35(2AB) of the Act. Since the year under consideration is prior to the amendment effective from 01.07.2016 and the facts are identical to those considered by the Coordinate Bench in the assessee's own case, we respectfully follow....
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....nsistently followed by the assessee in accordance with generally accepted accounting principles and recognized accounting standards. It was argued that the liability arising on account of exchange fluctuation as on the balance-sheet date is an ascertained liability and is allowable as a deduction under section 37(1) of the Act. In support of the aforesaid contention, the Ld. AR relied upon the judgment of the Hon'ble Supreme Court in the case of Oil and Natural Gas Corporation Ltd. vs CIT reported in 322 ITR 180 (SC), wherein it was held that loss arising on account of foreign exchange fluctuation as on the balance-sheet date is allowable as a business expenditure. Reliance was also placed on the decision of the Hon'ble Supreme Court in CIT v. Woodward Governor India (P.) Ltd. reported at 223 CTR 1 (SC), wherein it was held that exchange loss arising on restatement of foreign currency liabilities at the balance-sheet date is an allowable deduction and that the expression "expenditure" under section 37(1) includes a business loss even though no actual outflow of funds has taken place. The Ld. AR further relied upon the decision of the Hon'ble Gujarat High Court in CIT v. Panchmahal ....
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....ansaction in question was within the definition of speculative transaction as per Section 43(5) of the act. Further, the AO never disputed in the assessment order the fact that, the contracts were entered into by the appellant in its course of business. Though the guidelines issued by the CBDT vide Instruction No. 03/2010 dated 23.03.2010 in respect of treatment of loss from actual transactions in forex-derivatives in para 3, it also issued the guidelines to the Assessing Officers in para 2 in respect of marked to market losses which is reproduced as under; - ......Where companies make such an adjustment through their trading or profit/loss account, they book a corresponding loss (i.e. the difference between the purchase price and the value as on the valuation date) in their accounts. This loss is a notional loss as no sale/conclusion/settlement of contract has taken place and the asset continues to be owned by the company. ......In cases where no sale or settlement basket place and the loss on marked to market basis has resulted in reduction of book profits, such a notional loss would be contingent in nature and cannot be allowed to be set off against the taxable....
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.... the same constitutes a genuine business loss allowable under section 37(1) of the Act. Accordingly, we set aside the order of the Ld. CIT(A) and direct the Ld. AO to delete the disallowance of Rs. 7,99,81,196/-. The ground raised by the assessee is allowed. Accordingly, Ground No. 2 of the assessee's appeal is allowed. Ground No. 4:- the addition of un-reconciliated income amount to Rs. 29,14,965/- 26. The Ld. AR submitted that the Ld. AO noticed a difference of Rs. 29,14,965/- between the income reflected in the AIR/TDS records and the income recorded in the books of account. The Ld. AR contended that the income pertaining to the concerned parties had already been offered to tax in the respective years in which the corresponding invoices were raised. It was further submitted that the receipts reflected during the year also included amounts relating to invoices raised in earlier years, the income from which had already been offered to tax in those years. The Ld. AR pointed out that a detailed reconciliation explaining the difference was furnished before the Ld. AO vide letter dated 14.03.2016. However, without properly considering the reconciliation, the Ld. AO made an ad....