In the case of ITA No. 24/DEL/2019, the Deputy Commissioner of Income Tax (DCIT), Circle-11(1), New Delhi, appealed against the decision made by the Commissioner of Income Tax (Appeals)-2, Ludhiana, which involved the reversal of additions under Section 14A of the Income Tax Act, 1961. This appeal was directed against Hero Investment Pvt. Ltd., which has since amalgamated into M/s. Hero Motocorp Ltd., Ludhiana.
The case, held through video conferencing, was presided over by Judicial Member Shri C.N. Prasad and Accountant Member Shri Pradip Kumar Kedia. The hearing took place on December 20, 2021. The Revenue’s challenge centered on the additions made by the Assessing Officer during the assessment year 2011-12 which were later reversed by the CIT(A). The dispute arose from differing interpretations of the applicability of Section 14A, which pertains to the disallowance of expenditures incurred in relation to income not includable in total income.
At the hearing, counsel for Hero Investment, Shri Gaurav Jain, advocated that the company had opted to settle the matter under the ‘Vivad Se Vishwas Scheme, 2020’, a decision that led to the withdrawal of the appeal by the Revenue, subject to certain conditions. This development highlights the government’s initiative to reduce litigation in tax matters and to encourage settlements.
The ITAT, after considering the submissions and the context of the settlement under the Vivad Se Vishwas Scheme, dismissed the Revenue’s appeal in limine, with the provision that should the scheme not be finalized as planned, the Revenue could seek to restore the appeal.
ITA 24/DEL/2019: DCIT Challenges Reversal of Additions Under Section 14A for AY 2011-12
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