Thomson Press India Ltd. Vs ITO (ITAT Delhi)
ITAT Delhi held that disallowance under section 14A of the Income Tax Act is liable to be deleted in as much as fresh investment is made out of sufficient own interest free funds in the shape of reserve and capital.
Facts- The assessee company is engaged in the business of commercial printing and phototypresetting. The return of income for the year under appeal was filed on 30.09.2009 at a loss of Rs. 24,85,16,205/-. The case was taken up for scrutiny and assessment was completed u/s 143(3) on 26.12.2011 by making disallowance/ addition of Rs. 4,06,68,196/- and loss declared by the assessee was reduced to Rs. 20,78,48,010/-. Against this the assessee preferred an appeal before CIT(A) who vide impugned order dated 31.01.2019 partly allowed the appeal of the assessee. Thus, the assessee is in appeal before us.
Conclusion- Held that the assessee has made fresh investment of Rs. 4 lakhs in the year under appeal as against which it has sufficient own interest free funds in the shape of reserve and capital. Therefore, respectfully following the judgment of the Tribunal in the case of the assessee for preceding year as stated above, we direct the AO to delete the addition. However, since the assessee has made suo moto disallowance of Rs. 6,30,937/- therefore, the disallowance to this extent be restricted. Further, from the assessment order it is seen that the AO has made the disallowance of Rs. 766968/- which is in addition to Rs. 630937/- suo moto disallowed by the assessee, therefore, the disallowance of Rs. 766968/- is directed to be deleted.
