Case Law Details
Brite Infrastructure Pvt. Ltd. Vs ACIT (ITAT Delhi)
The present case pertains to AY 2015-16, wherein the Hon’ble Tribunal have made it observations on the mandate of procedural compliance by the AO, when prescribed by the CBDT.
In the present facts of the case, the assessee herein is a company which is stated to be engaged in the business of Civil Construction, Highway, Airport, Real Estate, share Trading etc,. Assessee electronically filed its return of income for AY 2015-16 declaring income of Rs. 44,42,609/-, which was selected for scrutiny through CASS and thereafter assessment was framed under section 143(3) and the total income before adjustment of brought forward losses was determined at Rs. 55,48,011/-.
The assesse approached the Hon’ble Tribunal after not getting relief from CIT(A) and before Hon’ble Tribunal it was submitted that AO has made addition by disallowing expenditure under section 14A of the Act which was not part for which the case initially selected for scrutiny under CASS. He submitted that when the case which is initially selected for “limited scrutiny” and is thereafter converted into “complete scrutiny”, the AO is required to take administrative approval from PCIT/ CIT in terms of instructions no. 5/2016 dated 14.07.2016 issued by CBDT.
Further, it was submitted that AO nowhere has recorded the mandatory satisfaction as to why the claim of the assessee of having not incurred any expenditure for earning exempt income is not correct and the AO also did not examine the books of accounts to reach a conclusion that the expenses have been incurred which needs to be disallowed under section 14A.
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