TaxTMI 
TaxTMI 
2020 (3) TMI 222
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....red in deleting the addition of disallowance made u/s.14A of the Income Tax Act read with rule 8D(2)(ii) &(iii) of the Income Tax Rule, 1962 without appreciating the fact that the AO has recorded her dissatisfaction regarding the claim of the assessee, during the assessment proceedings. 3. On the facts and circumstance of the case, the CIT(A) has erred in deleting the addition of disallowance made u/s.14A of the Income Tax Act read with rule 8D(2)(ii) of the Income Tax Rule, 1962 without appreciating the fact that the term expenditure for application of section 14A of the Income Tax Act would include not only direct expenditure but also all forms of expenditure regardless of whether they are fixed, variable, direct, indirect, administrative, managerial or financial. 4. The appellant prays that the order of the Ld. CIT(A) to the extent of the above issue be held to be bad in law and quashed and that of the Assessing Officer be restored. 5. The appellant prays to be allowed to add, modify, rectify, delete or raise any grounds of appeal during the course of appellate proceedings." 2. The assessee has preferred cross objection in CO No.40/PUN/2019 for assessment year 2013-14 aga....
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....rlier years on this ground, the disallowance made by the learned AO u/s.10AA(9) r.w.s.80-IA(10) be deleted. 2.2.3 As stated above, in my appellate Order in the Appellant's own case for the AY 2002-03, AY 2006-07, AY 2007-08, AY 2008-09, AY 2009-10, AY 2010-11 and AY 2011-12 and also in the honourable ITAT, Pune's Order ITA No 946 to 948/PN/2013 dated 23.12.2016 for the AY 2006-07 to 2008-09, similar disallowance made by the learned AO u/s 10A(7) is deleted. I do not find any difference in the facts of this year requiring reconsideration of my earlier .decision. Therefore, on similar grounds, by following the above mentioned ITAT Pune's decision and also my own decision in the Appellant's case for the earlier years, I delete the disallowance of Rs. 2,33,23,142/- made u/s.10AA(9) r.w.s.80-IA(10)." 6. We have perused the case record and heard the rival contentions. We have also given considerable thought to the findings of the Ld. CIT(Appeals). It is evident from the findings of the Ld. CIT(Appeals) that identical disallowance made in earlier assessment years 2009-10, 2010-11 & 2011-12 in assessee's own case and the Ld. CIT(Appeals) has placed reliance on the decisi....
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....ome of Rs. 16,58,44,817/-. Therefore, the learned AO has disallowed the amount of Rs. 1,34,39,970 under Rule 8D. However, out of this amount, the Appellant has made the disallowance amounting to Rs. 7,75,000/- during the assessment proceeding on suo-moto basis. The Appellant has raised several arguments supported by the number of decisions to argue that the additional disallowance made by the learned AO u/s.14A amounting to Rs. 1,26,64,970/- (1,34,39,970-7,75,000) should be deleted. 2.3.5 The Appellant has stated that the AO has to record dissatisfaction of the method followed by it. Section 14(2) requires the AO to arrive at the satisfaction having regard to the assessee's accounts that its claim of expenses is not correct. The Appellant has relied on many judgments in argument. I agree with the Appellant that the learned AO has not recorded his satisfaction to the effect that the Appellant's claim of expenditure of a lesser amount having regard to its accounts is incorrect. The learned AO without discussing the issue has merely stated in tile assessment Order that appropriate disallowance should be made u/s.14A Accordingly, he has disallowed the additional amount of Rs. 1....
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.... postulates is the requirement of a satisfaction in the Assessing Officer that having regard to the accounts of the assessee, as placed before him, it is not possible to generate the requisite satisfaction with regard to the correctness of the claim of the assessee. It is only thereafter that the provisions of Section 14A(2) and (3) read with Rule 8D of the Rules or a best judgment determination, as earlier prevailing, would become applicable. 38. In the present case, we do not find any mention of the reasons which had prevailed upon the Assessing Officer, while dealing with the Assessment Year 2002-2003, to hold that the claims of the Assessee that no expenditure was incurred to earn the dividend income cannot be accepted and why the orders of the Tribunal for the earlier Assessment Years were not acceptable to the Assessing Officer, particularly, in the absence of any new fact or change of circumstances. Neither any basis has been disclosed establishing a reasonable nexus between the expenditure disallowed and the dividend income received. That any part of the borrowings of the assessee had been diverted to earn tax free income despite the availability of surplus or interest fr....
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....l of the Revenue is dismissed. CO No.40/PUN/2019 ( By Assessee) A.Y. 2013-14 14. In Cross objection (CO No.40/PUN/2019), the assessee has raised following ground: "On the facts and in the circumstances of the case and in law, education cess and secondary & higher education cess of INR 2,11,88,562/- paid on the Income Tax and Surcharge during the year, ought to be allowed as deduction while computing the taxable income. Your respondent craves leave to add, amend, vary, omit or substitute the aforesaid ground of cross objections or add a new ground or grounds of cross objections at any time before or at the time of hearing of the appeal as they may be advised." 15. The Ld. AR of the assessee submitted that ground with regard to "education cess and secondary & higher education cess" has been raised for the first time before the Tribunal and they have not claimed this deduction in the return of income also. The Ld. AR of the assessee further submitted that since it is a legal ground, it does not require any fresh verification of facts. The Ld. AR has also filed an application praying for admission of this ground based on the decision of the Hon'ble Supreme Court of India in the....