2025 (10) TMI 131 - AT - Income Tax

Addition under s.14A unsustainable where assessee's suo motu disallowance exceeded exempt income; s.80IB(11A) deduction upheld

ITAT DELHI - AT held that the addition under s.14A was unsustainable because the assessee had made a suo motu disallowance exceeding the exempt income ... Addition u/s 14A - assessee’s exempt income representing dividends from mutual funds and share of profit from partnership firm - HELD THAT:- Revenue could hardly dispute that the assessee had already made suo motu disallowance i.e. more than the exempt income itself, and, therefore, we hereby quote Joint Investment Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] to conclude that the CIT(A)/NFAC has rightly decided the issue against the department herein. Rejected accordingly. Deduction u/s 80IB(11A) - HELD THAT:- Once the department is fair enough in not pinpointing any distinction on facts and on law in all these assessment years dealing with the assessee’s section 80IB(11A) deduction claim, we adopt judicial consistency to reject the Revenue’s instant latter substantive ground as well. Revenue's appeal under section 143(3) r.w.s. 147 for AY 2015-16 challenged two additions: Rs. 1,13,02,197 under section 14A and Rs. 9,40,32,065 disallowance of deduction under section 80IB(11A). The tribunal upheld the CIT(A)/NFAC's deletion of the section 14A addition, noting the assessee had made a suo motu disallowance of Rs. 8,33,419-exceeding the exempt income of Rs. 2,01,571 (dividends from mutual funds and share of profit)-and relied on Joint Investment Pvt. Ltd. v. CIT (2015) 372 ITR 694 (Del.) to conclude the deletion was correct. On the section 80IB(11A) claim, the tribunal applied judicial consistency: prior successful outcomes for the assessee in AYs 2007-08 to 2009-10 and 2016-17 were not distinguished by the department on facts or law, so the department's challenge to the Rs. 9,40,32,065 disallowance was rejected. Revenue's appeal dismissed.