Tribunal allows appeal on disallowance under sections 14A and 43B, emphasizes bank statement verification.

The Tribunal allowed the appeal for statistical purposes, directing the AO to delete the disallowance under section 14A as no exempt income was received or receivable. Regarding the disallowance of deduction under section 43B, the Tribunal remitted the issue back to the AO for proper verification of evidence, emphasizing the need to examine bank statements for verifying actual payments before allowing the deduction.

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Issues:
1. Disallowance u/s 14A r.w.r. 8D - Rs.1,91,49,505
2. Disallowance on account of deduction claimed u/s 43B - Rs.5,66,93,000

Analysis:
1. Disallowance u/s 14A r.w.r. 8D - Rs.1,91,49,505:
- The assessee contended no exempt income was earned during the year, challenging the disallowance made by the AO. The DRP confirmed the disallowance citing expenses related to exempt income. The Tribunal referred to the judgment in Cheminvest Limited v. CIT, where it was held that disallowance u/s 14A is not applicable if no exempt income is received or receivable. The Tribunal directed the AO to delete the disallowance based on the settled principle and binding decisions.

2. Disallowance of deduction u/s 43B - Rs.5,66,93,000:
- The AO disallowed the deduction claimed u/s 43B, stating it was wrongly claimed and lacked supporting details. The DRP upheld the disallowance due to insufficient evidence. The assessee argued for the deduction based on actual payment supported by bank statements. The Tribunal noted the provision of section 43B allowing deduction upon actual payment before the due date. It remitted the issue back to the AO for proper verification of the evidence, emphasizing the need to examine the bank statements for verifying actual payments.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the AO to delete the disallowance u/s 14A and review the deduction u/s 43B based on the evidence provided by the assessee.

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