IN INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. B. R. BASKARAN, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. No. 511/Asr/2018 Assessment Year: 2014-15 Taksal Hospitality Pvt. Ltd., vs. ACIT Circle-3, Srinagar Kamal Villa, Srinagar [PAN: AAACT 0403F] (Appellant) (Respondent) Appellant by : None Respondent by: Sh. Charan Dass (D.R.) Date of Hearing: 22.08.2019 Date of Pronouncement: 22.08.2019 ORDER Per B. R. Baskaran, Accountant Member: appeal filed by assessee is directed against order dated 06-08- 2018 passed by Ld CIT(A), Jammu and it relates to assessment year 2014-15. 2. assessee is aggrieved by decision of Ld CIT(A) in confirming disallowance to extent of Rs.1,72,500/- made by AO under section 14A of Act. 3. None appeared on behalf of assessee. Considering issue contested in this appeal, we preferred to dispose of appeal ex-parte, without presence of assessee. 4. We heard Ld DR and perused record. 2 ITA No. 511/Asr/2018 (AY 2014-15) Taksal Hospitality Pvt. Ltd. v. ACIT 5. During course of assessment proceedings, AO noticed that assessee company has made investments in shares/mutual funds/bonds etc. AO held provisions of sec.14A read with Rule 8D of Income Tax Rules shall apply to assessee. Accordingly, he computed disallowance of Rs.1,77,552/- under rule 8D of IT Rules. AO considered interest expenditure of Rs.2,12,140/- in computing above said disallowance. Ld CIT(A) upheld order of AO, but confirmed disallowance to extent of Rs.1,72,500/-. 6. case of assessee before Tribunal is that it did not earn any exempt income and hence no disallowance is called for under section 14A of Act. assessee has also submitted that amount of Rs.2,12,140/- considered by AO for making disallowance is not interest expenditure, but it is bank charges. However, from orders passed by Tax Authorities, it is not clear as to whether assessee has earned any exempt income or not. assessee has also contended that disallowance under section 14A of Act should not exceed exempt income. If assessee has not earned any dividend income, then question of considering bank charges of Rs.2,12,140/- does not arise. In any case contention of assessee that above said amount represents bank charges also require verification. AO has observed that assessee has disallowed direct expenses. 7. above said discussions would show that there is lack of clarity in matter. issue relating to disallowance to be made u/s 14A of Act has since been settled by orders of various High Courts. Hence, we are of view that this issue requires fresh exemption at end of AO. Accordingly we set aside order passed by Ld CIT(A) on this issue and restore same to file of Assessing Officer for examining this issue afresh. After considering 3 ITA No. 511/Asr/2018 (AY 2014-15) Taksal Hospitality Pvt. Ltd. v. ACIT contentions of assessee, AO may take appropriate decision in accordance with law. 8. In result, appeal filed by assessee is treated as allowed for statistical purposes. Order pronounced in open court on August 22, 2019 Sd/- Sd/- (N. K. Choudhry) (B. R. Baskaran) Judicial Member Accountant Member Date: 22.08.2019 /GP/Sr. Ps. Copy of order forwarded to: (1) Appellant: (2) Respondent: (3) CIT(Appeals) (4) CIT concerned (5) Sr. DR, I.T.A.T True Copy By Order Taksal Hospitality Pvt. Ltd. v. ACIT, Circle-3, Srinagar