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Appeal succeeds in challenging disallowance under section 14A for AY 2013-14 The appeal contested the disallowance u/s 14A for AY 2013-14, where the Appellate Tribunal found the assessee's suo-moto disallowance and actual ...
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Appeal succeeds in challenging disallowance under section 14A for AY 2013-14
The appeal contested the disallowance u/s 14A for AY 2013-14, where the Appellate Tribunal found the assessee's suo-moto disallowance and actual disallowance against investments sufficient. The additional disallowance made by the AO was deemed unsustainable, leading to the allowance of the appeal and deletion of the additional disallowance amounting to &8377; 8.95 Lacs.
Issues: Appeal against disallowance u/s 14A for AY 2013-14.
Analysis: 1. The appeal contested the order of the Ld. Commissioner of Income-Tax (Appeals) regarding the confirmation of disallowance u/s 14A for the AY 2013-14. 2. The assessee, a resident individual and Film Actress, was assessed for the impugned AY with the income determined at &8377; 420.20 Lacs after a disallowance u/s 14A for &8377; 8.95 Lacs. The disallowance pertained to exempt dividend income of &8377; 9,08,198/- against investments of &8377; 16.87 Crores, computed as 0.5% of average investments of &8377; 17.90 Crores. 3. The Ld. CIT(A) upheld the disallowance, noting the churning of funds during the AY and that certain loans/deposits were considered as investments by the Ld. AO. The assessee's plea was rejected due to lack of documentary evidence, leading to the conclusion that the provisions of Section 14A were rightly invoked. 4. The assessee offered a suo-moto disallowance of &8377; 2,34,357/- u/s 14A, which covered the disallowance against expenses debited in the Profit & Loss Account. The actual disallowance against investments yielding exempt income during the AY was &8377; 0.85 Lacs, less than the suo-moto disallowance. The AR argued that the additional disallowance made by the Ld. AO was unjustified, supported by the documents in the paper-book. 5. After considering the submissions and relevant material, it was found that the assessee's suo-moto disallowance and the actual disallowance against investments yielding exempt income were sufficient. The additional disallowance of &8377; 8.95 Lacs made by the Ld. AO was deemed unsustainable. Consequently, the appeal was allowed, and the additional disallowance was deleted.
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