https://www.taxtmi.com/caselaws?id=773597 The appeal concerned disallowance under Section 14A of the Income Tax Act regarding expenses related to exempt income. The AO disallowed Rs. 7,42,37,499 without providing reasons for rejecting the assessee's suo-moto disallowance of Rs. 26,06,419. The tribunal found the AO's action violated natural justice principles as no reasoned rejection was provided. Following precedents from Delhi HC in Jaypee Ventures and coordinate bench decisions, the tribunal held that disallowance must be reasonable, proportionate to exempt income, and properly justified. The tribunal deleted the entire disallowance of Rs. 4,35,00,600 confirmed by CIT(A), allowing the appeal and establishing that Rule 8D application is not mandatory and disallowance requires proper reasoning. en-us Fri, 20 Jun 2025 00:00:00 +0530 Wed, 25 Jun 2025 09:23:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=773597 The appeal concerned disallowance under Section 14A of the Income Tax Act regarding expenses related to exempt income. The AO disallowed Rs. 7,42,37,499 without providing reasons for rejecting the assessee's suo-moto disallowance of Rs. 26,06,419. The tribunal found the AO's action violated natural justice principles as no reasoned rejection was provided. Following precedents from Delhi HC in Jaypee Ventures and coordinate bench decisions, the tribunal held that disallowance must be reasonable, proportionate to exempt income, and properly justified. The tribunal deleted the entire disallowance of Rs. 4,35,00,600 confirmed by CIT(A), allowing the appeal and establishing that Rule 8D application is not mandatory and disallowance requires proper reasoning. Case-Laws Income Tax Fri, 20 Jun 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=773597