2019 (3) TMI 1583

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....ar 2011-12, whereby the Ld. CIT (A) has partly allowed the appeal filed by the assessee against assessment order passed u/s 153 r.w.s 143 (3) of the Income Tax Act, 1961 (for short 'the Act'). ITA No. 7255/MUM/2017 (Assessment Year: 2011-2012) 2. Brief facts of the case are that a search and seizure action u/s 132 of the Act was carried out on 24.02.2014 in the case of the assessee. In response to notice u/s 153A the assessee filed its return of income for the assessment year under consideration declaring loss at Rs. (-) 51, 62,460/-. The AO completed the assessment u/s 153A read with section 143 (3) of the Act and determined the total income of the assessee at Rs. 58,77,110/- after making addition of Rs. 1,10,39,577/- u/s 14A read wi....

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....on the order passed by the Ld. CIT (A) submitted that since the order passed by the Ld. CIT (A) is in accordance with the principles of law laid down by the Hon'ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT 378 ITR 33 (Del) and in Joint Investment Pvt. Ltd. vs. Commissioner of Income Tax 372 ITR 694 (Del), there is no infirmity in the said order and the appeal filed by the revenue deserves dismissal. 6. We have gone through the entire material on record in the light of the rival contentions of the parties. The only grievance of the revenue is that the Ld. CIT (A) has wrongly restricted the disallowance made u/s 14A read with rule 8D to the exempt income earned by the assessee during the previous year. The Ld. CIT (A) has re....

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....eed further and determine amounts is derived after examination of the accounts and rejection if any of the assesses's claim or explanation. The second aspect is there appears to have been no scrutiny of the accounts by the AO an aspect which is completely unnoticed by the CIT (A) and the Tribunal. The third, and in the opinion of this Court, important anomaly which we cannot be unmindful is that whereas the entire tax exempt income is Rs. 48,90,000, the disallowance ultimately directed works out to nearly 110 per cent of that sum, i.e. Rs. 52,56,197. By no stretch of imagination can s. 14A or r. 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in s. 14A, and is o....