TaxTMI 
TaxTMI 
2024 (12) TMI 196
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....e 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 required under section 14A(2) of the Act, has not been recorded by the Assessi....
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.... 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 earned Rs. 4,55,75,508/- as exempt income being dividends and Long Term Capital Gain which was exempt u/s. 10(38) of the Act amounting to Rs. 10,73,18,111/-. the Ld.A....
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..../- 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 file any justification. 6.7 The contention of appellant are considered but not found to be acceptable. The disallowance as per section 14A are mandatory in nature even if the appellant has not e....
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....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 issue in assessee's own case by order passed by coordinate bench of this Tribunal in the preceding assessment years. 4.5. On the contrary, Ld.DR relied on the orders passed by the authorities below. We have perused the submissions advanced by both the sides in light of records placed before us. 5. It is note....
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....t 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 reasonable to make disallowance u/s 14A with Rule 80. Accordingly, we restrict the disallowance of R5.4,77,890/- by reversing the orders of the lower authorities below and thus allow the grounds of appeal taken by assessee. In A.Y. 2009-10, in ITA No. 6780/Mum/2012 dated 31.03.2016 On perusal of the above decision of the Tribunal, we agree w....