TaxTMI 
TaxTMI 
2024 (12) TMI 196
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....ench in Appeal No. ITA 7623/Mum/2011 dt. 22/01/2014 in the appellant's own case for A.Y. 2008-09 as well as the subsequent AY 's on an identical issue and jurisdictional High Court in Appeal No. 490, 492 & 514 of 2017 dt. 03/06/2019 and ought to have accepted the said disallowance. c) The learned Commissioner of Income Tax (Appeals) has erred in upholding the additional disallowance under section 14A at Rs. 9,79,36,390/- as determined by the learned Assessing Officer in as much as the learned Assessing Officer has misconstrued the provisions of the Income Tax Act by considering the total investments instead of only those investments in relation to income which does not form part of total income viz. tax free investments to ascertain the disallowance under section 14A read with Rule 8D. d) The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance under section 14A read with Rule 8D as computed by the learned Assessing Officer wherein investments on which taxable income is earned is also considered while computing the said disallowance. e) The learned CIT(A) has failed to appreciate that the objective satisfaction as ....
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....ce of Rs. 9,79,36,392/- under section 14A read with Rule 8D be deleted. * without prejudice to what is stated above, that the disallowance u/s 14A applies only to section 14A and not to section 115JB and be deleted to modify the assessment in accordance with the provisions of law." Brief facts of the case are as under: 2. The assessee is a company registered as a Non Banking Financial Company (NBFC) with Reserve Bank of India. It derives it income by way of interest, dividend and capital gain on sale of investment for the year under consideration. It filed its return of income declaring net taxable income under normal provisions of Act at Rs. 40,51,29,640/- and u/s. 115JB at Rs. 70,67,99,534/-. Subsequently, the assessee filed revised return of income returning net taxable income under normal provisions at Rs. 35,76,29,640/- and u/s. 115JB Rs. 70,67,99,534/-. 2.1. The case was selection for scrutiny and statutory notice u/s. 143(2) of the Act along with 142(1) of the Act was issued to the assessee in respect of the notices, representative of assessee appeared before the Ld.AO and filed requisite details as called for. 2.2. The Ld.AO noted that, the assessee ear....
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....f Rs. 27,11,25,000/-, Investment in associates of Rs. 44,10,39,146/-, preference shares of Rs. 69,06,025/-, other equity shares of Rs. 5,12,30,792/-, Mutual Funds of Rs. 368,98,35,980/- and Venture Capital and Investment Funds of Rs. 25,33,47,857/- as non-current investments and unquoted mutual funds of Rs. 4,70,23,15,876/- as current investments as on 31.03.2017. 6.5 The Ld. AO observed that the working of disallowance of expense related to earning such income made by the appellant is not computed as per Rule 8D. The Ld AO held that The disallowance is to be made even if the appellant contends that no expenditure has been incurred in earning exempt income. The investments cannot be managed without inherent expenses since no investments can be made without market analysis and expertise. The expenses disallowed u/s 14A by the appellant is Rs. 4,53,034/-, which is only 0.40% of the total expenses seen in the P&L of the appellant. 6.6 The appellant during the appellate proceedings submitted that it has carried out reasonable disallowance of Rs. 4,53,034/-. But the appellant did not file the basis of computing said disallowances. Apart from this, the appellant did not....
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....18,963 Amount inadmissible u/s 14A 4,53,034 Total Disallowance 10,70,71,997 4.3. The Ld.AR submitted that, while computing the disallowance u/s. 14A, the assessee took into consideration the direct expenditure of Rs. 1,43,493/- incurred in realization to earning of exempt income. Further he submitted that in respect of every indirect expenses, the assessee apportioned all other expenses in ratio of exempt income to total income that was computed at Rs. 3,09,541/-. He submitted that, the assessee has been following similar methodology in all the preceding years for computing the disallowance u/s. 14A. The Ld.AR also submitted that, on identical facts coordinate bench of this Tribunal in assessee's own case for assessment year 2008-09 to 2012-13 allowed the claim of assessee. He placed heavy reliance on the orders passed by this Tribunal in assessee's own case. 4.4. The Ld.AR submitted that, the first appellate authority for assessment year 2014-15 allowed the claim of assessee which is reproduced in order dated 06/07/2020 of this Tribunal for assessment year 2014-15 in ITA No. 484/M/2019. The Ld.AR thus submitted that, the issue under consideration is a covered iss....
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....nce of Rs. 3,55,37,232/-. After giving credit of disallowance made by the appellant itself for an amount of Rs. 5,72,785/- the net disallowance made by the AO comes to Rs. 3,49,64,447/-. During the course of appellate proceedings, a written submission was filed which find place in para 5 of this order. The appellant submitted that similar type of disallowances were made in appellant's own case for assessment years 2008-09,2009-10. 2010-11, 2011-12 and 2012-13. According to the appellant, the appeal of the assessee on these grounds has been decided by Hon'ble Tribunal. I have considered the submission of the appellant, the Hon'ble Tribunal in appellant's own case has held as under: The Hon'ble ITAT during A.Y. 2008-09, in ITA No. 7598/Mum/2011 dated 22.01.2014 has held as under: We are of the considered view that a reasonable allocation of expenditure has to be made which can be attributed to the income which is chargeable to tax. Considering the facts and circumstances of the case, we are of the considered view that expenditure of As. 4,77,890/- as worked out by the assessee, the details of which are mentioned by AO at pg. 2 of the order, is re....
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....t year 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, AD is directed to work out the disallowance a per the criteria decided by Hon'ble ITAT in appellant's own case in earlier years. Hence appeal is partly allowed." 5.2. This Tribunal for A.Y. 2014-15 considering the observation of the Ld. CIT(A) observed as under:- "5. On appraisal of the above mentioned order, we find that the claim of the assessee was allowed on the basis of the decision of the Hon'ble ITAT in the assessee's own case for the A.Υ.2008-09, 2009-10, 2010-11, 2011-12 & 2012-13. The details of decisions have been mentioned in the order reproduced above. There is no factual change. The issue has already been allowed by the Hon'ble ITAT in the assessee's own case. No law contrary to the law relied by the Hon'ble ITAT as well as by the CIT(A) in his order has been produced before us. We nowhere found any material to interfere with the finding of the CIT(A). We are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we upheld the finding of the CIT(A) on thes....