If an addition or disallowance is not permissible in law, the same cannot be fastened upon the assessee on his concession.

This Income Tax Appellate Tribunal ruling clarifies that if an addition or disallowance is not legally permissible, it cannot be imposed on a taxpayer, even if they have conceded to it. The case involved an appeal by Hathway Cable and Datacom Limited concerning a disallowance of expenses under Section 37(1) and Section 14A. The Tribunal's decision upholds the principle that legal validity must always take precedence over taxpayer concessions.

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI
BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM

ITA No. 3840/Mum/2019
(Assessment Year: 2014-15)

Hathway Cable and Datacom Limited
Rahejas, 1st Floor,
Corners of Main Avenue & V. P. Road,
Santa Cruz (W), Mumbai-400 054
PAN/GIR No. AAACC 6814 B
(Appellant) 

Vs.

Dy. CIT-9(2)
Aayakar Bhavan, M. K. Road,
Mumbai-400 020
(Respondent)

Appellant by : Shri Nimesh Vora
Respondent by : Shri Jeetendra Kumar
Date of Hearing : 26.10.2020
Date of Pronouncement : 05.01.2021

O R D E R

Per Shamim Yahya, A. M.:

This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-20, Mumbai (‘ld.CIT(A) for short) dated 29.03.2019 and pertains to the assessment year (A.Y.) 2014-15.

2. The grounds of appeal read as under:

1 (a) The learned Commissioner of Income tax (Appeals) erred in enhancing disallowance of the expenses incurred amounting to Rs.51,35,105/- under section 37(1) of the Act.

(b) The appellant submit that it had provided a without prejudice working on rationaland scientific basis for disallowance to be made under section 14A of the Act during the course of the assessment proceedings. The appellant submits that it had inadvertentlymentioned in the Statement of Facts that the said amount was added to the computation of total income. The learned Commissioner of Income-tax (Appeals) failed to appreciate that in the Grounds of appeal (No.3) it had specifically mentioned that without prejudice to its claim that no disallowance was called for under section 14A of the Act, the disallowance be restricted to Rs.51,35,105/-.

(c) The appellant submits that it is engaged in the business of Cable Network Services and Internet Service Provider and various expenses were incurred for suchbusinesses and not for earning any income from investments and hence the learned Commissioner of Income-tax (Appeals) erred in enhancing the assessment by disallowing a sum of Rs.51,35,105/- under section 37(1) of the Act.

(d) Without prejudice to what is stated above, the appellant submits that the order of the learned Commissioner of Income-tax (Appeals) enhancing the disallowance by a sum of Rs.51,35,105/- was passed without affording proper opportunity to the appellant and is contrary to the principles of natural justice.

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