TaxTMI 
TaxTMI 
2018 (12) TMI 105
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....3 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of expenses made by AO by invoking the provisions of section 14A of the Act read with Rule 8D(2)(iii) of the Income Tax Rules, 1962 (hereinafter the 'Rules'). For this Revenue has raised the following three grounds: - "1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) is right in deleting disallowance of Rs. 69,36,640/- made by the AO under section 14A of the Income Tax Act. 1961 r.w Rule 8D of the Income Tax Rules. 1962. 2. On the facts and in the circumstances of the case and in law. whether the Ld. CIT(A) is justified in ....
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.... in appeal before us. 4. Before us, the learned Sr. Departmental Representative, heavily relied on the assessment order and the learned Counsel for the assessee drew our attention to Tribunal order in assessee's own case for AY 2009-10 in ITA No. 2726,2727 & 2729/Mum/2013 vide order dated 23.07.2014, wherein the assessee itself contended for set aside the matter to the file of the AO for the reason that the suo moto disallowance made by assessee in that years was not examined by the Assessing Officer. The learned Counsel for the assessee referred to Para 7 and 8 of Tribunal order which reads as under: - "7. The assessee's contention before us was that the A.O. was, before proceeding to apply rule 8D, admittedly mandatory w.e.f. A.Y. 2008....
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....e is not much difference between the opening and the closing value of the investment and, two, the bulk of the tax exempt income arising by way of interest on tax-free bonds. The Revenue, in our view, ought to have required the assessee to substantiate its claim of the working of suo motu disallowance u/s.14A with reference to its accounts, and which wouldinclude the underlying vouchers as well. The A.O., upon making such enquiry as he deems fit and proper in the matter, is to form his opinion, expressing his satisfaction or dissatisfaction, as the case may be, in the matter. This examination and process, as apparent, has not been undertaken, which, as explained by the hon'ble jurisdictional high court in the case of Godrej & Boyce Mfg. Co.....
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....ce President) 23,17,077.00 23.17 Ravi Garg (Senior Manager) 6,95,154 6.95 Aishwarya Bansod (Assistant Manager) 2,89,401 2.89 Bhakti Matkar (Executive) 3,16,004 3.16 200.31 Add. Staff welfare @6% (excl.MD) 4.78 A 205.09 Other Overheads Communication cost 2,95,81,091.01 295.81 Premises, Tax & Repairs 1,44,11,034.00 144.11 Repairs Others 1,57,86,153.00 157.86 Rates & Taxes 81,50,874.00 81.51 679.29 Total Staff Cost 36,84,82,480 3,684.82 Ratio of Overheads to staff ....
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....e made suo moto disallowance while computing its total disallowance at Rs. 12.30 lakhs which is almost 5% of the cost of salary of top management and 20% cost of allocable salary. It was also explained that 20% of overhead as having been expanded for earning this tax free income, no further disallowance is to be required. We have considered these issues and fact that the AO has nowhere recorded the satisfaction as to why he is rejecting the computation of disallowance made by the assessee. This issue has been deliberated by Hon'ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT [2018] 402 ITR 640 (SC), held as under: - ""41. Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also ma....