Section 14A disallowance under Rule 8D not restored where explanation was not validly rejected and facts were concurrent.

Disallowance under Section 14A read with Rule 8D was not interfered with where the assessee had offered an explanation for the expenditure basis and the Assessing Officer failed to reject it with valid reasons before applying Rule 8D. The CIT(A) and Tribunal had recorded concurrent findings of fact on this point, and the issue was treated as governed by binding precedent. On that basis, the disallowance was not restored and no substantial question of law survived for appellate interference.

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Issues: Whether disallowance under Section 14A of the Income-tax Act, 1961, read with Rule 8D of the Income-tax Rules, 1962, was rightly deleted on the facts of the case.

Analysis: The assessee had offered a basis for disallowance, and the authorities below found that the Assessing Officer did not reject that explanation for valid reasons before applying Rule 8D. The findings reached by the CIT(A) and the Tribunal were concurrent findings of fact. The legal position was also treated as covered by binding precedent.

Conclusion: The disallowance was not restored. The issue was answered against the Revenue and in favour of the assessee.

Final Conclusion: The appeal failed because no substantial question of law survived in view of the concurrent factual findings and the governing precedent.

Ratio Decidendi: Where the lower authorities have recorded concurrent findings that the Assessing Officer did not validly reject the assessee's explanation before making a Section 14A disallowance, no interference is warranted in appeal.

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