Tribunal allows appeal, deletes disallowance under section 14A

The Tribunal allowed the assessee's appeal, deleting the disallowance under section 14A r.w.r. 8D as the Assessing Officer had not expressed dissatisfaction with the disallowance made by the assessee. The Departmental Representative did not contest this decision, leading to the dismissal of the revenue's appeal as it became irrelevant. The judgment was pronounced on October 17, 2018.

---

---

Issues Involved:
Challenge to correctness of the order dated 20th January 2016 passed by CIT (A) for assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2010-11. Adjudication on whether Assessing Officer can invoke rule 8D r.w.s. 14A without recording dissatisfaction with the suo motu disallowance offered by the assessee.

Analysis:

1. The appeal was filed challenging the order passed by the CIT (A) for the assessment year 2010-11 under section 143(3) of the Income Tax Act, 1961. The primary issue highlighted during the hearing was whether the Assessing Officer could invoke rule 8D r.w.s. 14A without expressing any dissatisfaction with the disallowance offered by the assessee under section 14A. The assessee's counsel pointed out that a similar issue had been decided in the assessee's favor by a co-ordinate bench in the previous assessment year, and a copy of that decision was submitted for reference.

2. The Departmental Representative did not contest the submissions made by the assessee's counsel but relied on the lower authorities' stance. The Tribunal, after considering the facts and the precedent set in the assessee's previous case, concluded that they saw no reason to deviate from the earlier decision. Consequently, the Tribunal decided to delete the disallowance of &8377;1,58,31,847/- under section 14A r.w.r. 8D. It was noted that the Assessing Officer had not expressed any dissatisfaction with the disallowance made by the assessee under section 14A r.w.r. 8D, a fact that was undisputed by the Departmental Representative.

3. As a result of the Tribunal's decision to allow the assessee's appeal, the Departmental Representative acknowledged that the revenue's grievance would become irrelevant if the assessee's appeal on the 14A disallowance issue was upheld. Therefore, the revenue's appeal on this matter was deemed infructuous and subsequently dismissed. In summary, the Tribunal allowed the assessee's appeal and dismissed the revenue's appeal, pronouncing the judgment on October 17, 2018.

---