The ITAT allowed the appeal in part, directing the AO to...

The ITAT allowed the appeal in part, directing the AO to recalculate the disallowance under section 14A read with Rule 8D by considering only investments yielding exempt income, in line with established precedents. The AO's non-acceptance of the assessee's suo-moto disallowance sufficed to demonstrate dissatisfaction, obviating the need for formal recording. Regarding the employee cost provision, the tribunal held that the assessee's creation of a provision for wage revision payments constituted an allowable business expenditure, rejecting its classification as a contingent liability. Finally, the AO was instructed to reconcile discrepancies between book profit figures in the assessment order and computation sheet, ensuring accurate determination. The appeal was allowed for statistical purposes with directions to provide the assessee a reasonable opportunity before passing the revised order.