2021 (7) TMI 1074

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....made by the A.O. u/s 14A of the Income-tax Act,1961 ['the Act' for short]. 2. The facts relating to the issue are stated in brief. The assessee is engaged in the business of development of industrial park, residential houses, buildings, apartments, etc. During the course of assessment proceedings, the A.O. noticed that the assessee has earned share income from firms aggregating to Rs. 20.32 lakhs and claimed the same as exempt u/s 10(2A) of the Act. The AO noticed that the assessee did not make any disallowance u/s 14A of the Act. Hence, the A.O. proceeded to compute disallowance u/r 8D of I T Rules read with section 14A of the Act. The disallowance made by the AO consisted of interest disallowance under Rule 8D(2)(ii) amounting ....

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.... of the assessee for not disallowing anything u/s 14A of the Act is not correct. He further submitted that though the assessee has invested in many partnership firms, yet it has earned share income only from two concerns namely M/s. Century Airport City & M/s. Century Corbel. Hence, for deciding the applicability of provisions of sec.14A, only investments made in these two concerns alone are required to be taken into consideration. Accordingly, he submitted that the disallowance u/s 14A of the Act is not warranted. 4. On the contrary, the Ld. D.R. supported the order passed by Ld. CIT(A). 5. We heard the rival contentions and perused the record. We notice that the A.O. has computed the disallowance u/s 14A of the Act at Rs. 42.42 lakh....