2021 (3) TMI 1100

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....e Assessment Year 2012-13. The Revenue has raised the following grounds of appeal. "Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting Rs. 52,41,459/- on account accrued interest on advances to M/s. Nalwa Metal Alloys Limited, M/s. Gagan Trading Company Limited and M/s. JSW Steel Limited on the basis of the decision of his predecessor on identical issue in the assessee's own case by ignoring the fact that principle of res-judicata is not applicable to Income Tax proceedings as each assessment year is a separate year? 2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee by ignoring a fact that Section ....

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....se to the show cause notice, the assessee submitted that, it has suo motu disallowed Rs. 33,99,679/- u/s. 14A out of expenditure in its computation of income. It was further submitted that these investments were existing since 1985 and no borrowed funds were utilized for making such investments. Further, no one to one of correspondence can be arrived between income and the expenditure incurred for the purpose of Section 14A. However, ld. Assessing Officer held that expenditure incurred by the assessee towards exempt income whether direct income or indirect has to be disallowed in terms of Section 14A read with Rule 8D which has prescribed the method of determining the amount of expenditure to be disallowed u/s. 14A. Since there was no expen....

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....re, no disallowance should have been made by the Assessing Officer by invoking Rule 8 D. 7. On the other hand, ld. DR submitted that before the Assessing Officer, the assessee could not give the working in respect of suo motu disallowance, and therefore, it cannot be said that onus cast upon the assessee stands discharge and Assessing Officer then has no option but to compute the disallowance under the prescribed method provided in Rule 8D. Even the ld. CIT(A) has noted that assessee has failed to maintain separate account and the basis for proportionate disallowance. Accordingly, Assessing Officer was justified in making the disallowance under Rule 8D (2)(iii). 8. We have heard the rival contentions and also perused the relevant mate....