2023 (1) TMI 1401

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.... 54,98,682/- 1. On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax Appeals - VI, New Delhi ("the CIT(A)) erred in upholding the action of Asst. Commissioner of Income Tax, Circle 18(2), New Delhi ("the AO") of invoking Rule 8D of the Income Tax Rules, 1962 (the Rules') and making a additional disallowance of Rs. 54,98,682/-. 2. The Ld. CIT(A) erred in offering the aforesaid disallowance despite of the facts that :- a) The Appellant had suo-moto disallowed an amounting to Rs 45,78,619/- u/s 14A of the Act computed based on a detailed scientific working as certified by an independent Chartered Accountant. b) To invoke Rule 8D, the AO should, after considering the accou....

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....T enabled services. During the year, the assessee earned income from business and profession and income from other sources. 2.1. From the return of income it was observed that the assessee had claimed dividend income of Rs. 13,82,10,530/- as exempt and had suo motu disallowed Rs. 45,78,619/- under section 14A. The AO noted the details of current and non-current investments as per the balance sheet and also noted from the detailed Note Nos. 2.9 and 2.13 that details of investments were given which would give exempt income and which would be involved in calculation of disallowance under section 14A. The assessee was asked to explain why disallowance under section 14A should not be made. In response it was submitted that an amount of Rs. 45....

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....l expenditure to be disallowed was computed at Rs. 1,00,77,301/-. Since, the appellant had on its own disallowed Rs. 45,78,619/-, a further disallowance of Rs. 54,98,682/- was made. 3. Against this order the assessee appealed before the Ld. CIT(A). 4. Upon assessee's appeal, the Ld. CIT(A) confirmed the action of the AO. 5. Against the order of the Ld. CIT(A), the assessee is in appeal before us. 6. We have heard both the parties and perused the records. The ld. Counsel for the assessee submitted that the issue involved is squarely covered in favour of the assessee by the decision of this Tribunal in assessee's own case for AY 2015-16 in ITA No. 3449/Del/2019, vide order dated 30.08.2019. He submitted that the ITAT duly held tha....

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....ng in this activity. It is the observation of the ld. CIT (Appeals) when exact time and energy of employees including middle and top management invested is not ascertainable then the only method left before the Assessing Officer to compute disallowance is under Rule 8D(2)(iii). Here we observe that provisions of section 14A of the Act contemplates recording of satisfaction by the Assessing Officer having regard to the accounts of the assessee if he is not satisfied with the claim of the assessee in respect of expenditure in relation to income which does not form part of total income. On reading of the assessment order, we find that the Assessing Officer having regard to the suo moto disallowance made by the assessee has not recorded any obj....