Tribunal affirms assessee's 14A disallowance method, dismissing Revenue's appeal.

The Tribunal upheld the assessee's methodology of restricting disallowance u/s. 14A to the amount voluntarily offered, following previous decisions favoring the assessee. The Revenue's appeal was dismissed, affirming the consistent approach across assessment years and the High Court's support for the assessee's methodology. The Tribunal's decision was delayed due to the COVID-19 pandemic, in line with relevant rules and court decisions.

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Issues:
- Disallowance u/s.14A made by the AO
- Restriction of disallowance u/s.14A with Rule 8D
- Relief to the assessee relying on the decision of Hon'ble Special Bench of ITAT Delhi

Analysis:
1. The appeal filed by the revenue challenges the order of the Learned Commissioner of Income Tax (Appeals) dated 28.11.2018 for the Assessment Year 2014-15. The revenue raised grounds regarding the disallowance u/s.14A made by the AO, arguing that the Ld.CIT(A) erred in restricting it and not following the prescribed method of calculation under Rule 8D of Income Tax Rules, 1962.

2. The Ld.CIT(A) restricted the disallowance to the suomoto disallowance made by the assessee, following previous Tribunal decisions in the assessee's case for A.Y. 2008-09 to A.Y. 2012-13. The counsel for the revenue supported the AO's order, while the assessee's counsel highlighted the consistency of decisions in the assessee's favor in previous years.

3. The Tribunal examined the exempt income received by the assessee during the assessment year and the suomoto disallowance made. The Assessing Officer computed the disallowance u/s. 14A at a higher amount, but the Ld.CIT(A) restricted it to the suomoto disallowance following previous Tribunal decisions in the assessee's case.

4. The Tribunal referred to previous decisions in the assessee's case for various assessment years, where the disallowance was restricted to the amount voluntarily offered by the assessee. The Tribunal upheld the methodology adopted by the assessee in apportioning expenditure between taxable and exempt income, leading to the dismissal of the revenue's appeal.

5. The Tribunal also cited a decision for A.Y. 2013-14 where the claim of the assessee was accepted, emphasizing the consistency in approach across assessment years. The Hon'ble High Court's order further supported the Tribunal's decision, rejecting the appeals filed by the Revenue and upholding the assessee's methodology of disallowance.

6. The Tribunal, following previous orders and the High Court's decision, held that the computation adopted by the assessee for disallowing expenditure u/s. 14A should be accepted. The appeal of the Revenue was dismissed based on the consistent application of methodology in the assessee's case.

7. The pronouncement of the order was delayed due to the COVID-19 pandemic, following Rule 34(5) of Income Tax Appellate Tribunal Rules, 1963 and the Hon'ble Bombay High Court's decision extending time-bound periods specified during the lockdown.

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