Appeal success: Disallowance under section 14A set aside, assessee prevails.

The appeal challenged the assessment order under section 250 of the Income Tax Act, 1961 for the assessment year 2015-16, specifically focusing on the disallowance under section 14A for computing book profit under section 115JB. The Tribunal's decision favored the assessee, allowing grounds 3 and 4 of the appeal in their favor. Grounds 1 and 2 were not pursued during the hearing and were dismissed. The appeal was partly allowed based on a subsequent Special Bench ruling directing the computation of book profit without utilizing section 14A.

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Issues Involved:
The appeal challenges the order passed u/s 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals) for the assessment year 2015-16.

Grounds Raised by Assessee:
1. Challenge to order u/s 154 for lack of proper opportunity.
2. Void order u/s 154 on debatable issue.
3. Disallowance under Section 14A for computing Total Income under MAT provisions.
4. Disallowance u/s 14A is notional without evidence of proximate relationship.
5. Right to add, alter, or amend grounds of appeal.

Facts of the Case:
- Assessee is a manufacturer and exporter of pharmaceutical products.
- Return filed showed total income of Rs. 3,95,99,830.
- Investments made in instruments yielding exempt income of Rs. 160,48,90,158.
- Borrowed funds used for investments with interest expenditure debited.
- Disallowance under section 14A not made initially.
- AO found interest cost directly attributable to investments and made disallowance of Rs. 9,02,01,085 under section 14A.
- Subsequently, disallowance added to book profit under section 115JB.
- CIT(A) upheld AO's decision based on previous Tribunal decision.
- Assessee cited a subsequent Special Bench decision in favor.

Judgment:
- Special Bench decision directs computation of book profit under section 115JB without using section 14A and Rule 8D.
- Grounds 3 and 4 of appeal allowed in favor of assessee.
- Grounds 1 and 2 not pressed during hearing and dismissed.
- Appeal partly allowed.

Conclusion:
The appeal challenges the assessment order under section 250 of the Income Tax Act, 1961 for the assessment year 2015-16, focusing on disallowance under section 14A for computing book profit under section 115JB. The Tribunal's decision favored the assessee based on a subsequent Special Bench ruling, directing computation of book profit without resorting to section 14A.

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