TaxTMI 
TaxTMI 
2022 (11) TMI 1403
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....2015-16 and 2017-18 & 2018-19 respectively passed by Commissioner of Income Tax (Appeals), Mumbai [hereinafter referred to as the CIT(A)] on the identically worded grounds except the difference of disallowance/suo-moto disallowance/dividend earned (for the sake of brevity we are taking grounds of appeal of ITA No. 2467/M/2022 for A.Y. 2018-19) inter-alia that :- "1. (i) The Commissioner of Income Tax (Appeals) - 47, Mumbai [hereinafter referred as CIT(A)] erred in upholding the action of the Deputy Commissioner of Income Tax, Central Circle -1(1) [AO] in making disallowance u/s 14A of Income Tax Act, 1961 (Act) r.w. Rule 8D of the Income Tax Rules, 1962 (Rules) without recording his dissatisfaction with respect to correctness of the claim of the Appellant having regard to its books of accounts. (ii) The CIT(A) erred in upholding the action of the AO in considering all investment for the purposes of making disallowance as per rule 8D(2) of the Rules as against only those investment on which Appellant has actually earned the exempt income. (iii) The CIT(A) erred in upholding the action of AO in making the disallowance u/s 14A of the Act while computing the ....
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....o.2467/M/2022, ITA No.2468, 2469, 2470 & 2478/M/2022: 5. The Ld. A.R. for the assessee challenging the impugned order passed by the Ld. CIT(A) contended inter-alia that before rejecting the disallowances made by the assessee under section 14A of the Act the AO has not recorded valid satisfaction rather it is no satisfaction with regard to the disallowance computed by the assessee under section 14A of the Act; that the AO as well as Ld. CIT(A) considered entire investments as against only those investments on which assessee has actually earned the exempt income in order to make the disallowance; that in ITA No.2469/M/2022 for A.Y. 2015-16 the assessee has not earned any exempt income even then the disallowance has been made/confirmed vide impugned order and relied upon the order assed by co-ordinate Bench of the Tribunal in assessee's own case in Edelweiss Financial Services Ltd. vs ACIT in ITA No. 92 & 93/Mum/2022, Financial Services Lid. Vs DCIT in ITA No. 1283/Mum/2021, ITO vs. Centrum Capital Limited in ITA No.497/Mum/2019 and ECL Finance Limited vs. ACIT in ITA No.899/M/2018. 6. However, on the other hand, the Ld. D.R. for the Revenue in order to repel the argument addres....
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....come Particulars Amount Proportionate expenses Basis of allocation Employee costs 90,34,13,660 30,00,000 Salary cost of an employee Communication 61,19,900 20,323 % of employee cost Electricity charges 95,85,770 31,832 % of employee cost Office expenses 71,10,948 23,614 % of employee cost Insurance 2,35,76,740 78,292 % of employee cost Postage and Courier 14,11,848 4,688 % of employee cost Printing and Stationery 89,73,493 29,799 % of employee cost Repairs and Maintenance 14,48,404 4,810 % of employee cost Travelling and Conveyance 7,16,63,613 2,37,976 % of employee cost Rent 8,10,60,681 2,69,181 % of employee cost Total 37,00,514 10. Perusal of the working of suo-moto disallowance made by the assessee under section 14A goes to prove that every minute details have been brought on record by the assessee as to how he has attributed the proportionate expenses towards employee's cost, communication, electricity, charges, office expenses etc. qua the years under consideration. This working of disallowance under section 14A made ....
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....egard to the sou motu disallowances claimed by the assessee in the context of its accounts. It is only thereafter, the occasion to apply rule 8D of the Rules for apportionment of expenses can arise. 13. In the present facts, the Tribunal has correctly come to the conclusion that non-satisfaction as recorded by the Assessing Officer for rejecting the sou motu disallowances claimed by the assessee is not done as required under section 14A(2) of the Act. On facts, the view taken by the Tribunal is a possible view and calls for no interference." 12. Hon'ble Supreme Court has also held in Maxopp Investment Ltd. vs. CIT 301 CTR 489 that only after recording satisfaction under section 14A(2) the provisions contained under rule 8D of the Rules for apportionment of expenses can be applied by returning following findings: "41. Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also make it clear that before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance under Section 14A was not correct. It will be in those cases where the assessee ....
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....is to verify the facts if the disallowance made by the assessee under section 14A under the normal provisions of the Act is considered while computing the book profit under section 115JB of the Act. However, the disallowance made by the AO by invoking the provisions contained under section 14A read with rule 8D while computing the book profit under section 115JB of the Act is not sustainable in the eyes of law, hence ordered to be deleted. So Ground No.1(iii), 1(iv), 1(iii) in ITA No.2467, 2468 & 2478/M/2022 for A.Y. 2018-19, 2020-21 & 2018-19 respectively are decided in favour of the assessee. Ground No.2 of ITA No.2467 for A.Y. 2018-19 17. The assessee has specifically raised ground No.4 before the Ld. CIT(A) that the AO erred in allowing the TDS credit of Rs.23,02,03,759/- only as against revised TDS credit claim of Rs.25,30,24,296/- by the Appellant during the course of assessment proceedings resulting into short TDS credit of Rs.2,28,20,537/-, but has not been decided by the Ld. CIT(A). The Ld. A.R. for the assessee contended that this issue has already been decided in favour of the assessee by the co-ordinate Bench of the Tribunal in assessee's own case for A.Y. 2012-13....