TaxTMI 
TaxTMI 
2024 (6) TMI 1451
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....rder was emanated from the order of the ACIT, Circle 14(3)(2), Mumbai passed under section 143(3)of the Act, date of order 11/12/2019. 2. The assessee has taken the following grounds of appeal:- "1. The Learned CIT Appeals erred in confirming the additions of Rs. 77,17,358/- made by the Learned Assessing Officer while passing the order u/s 143(3) on the grounds that the Learned Assessing Officer was not satisfied with suo moto offering of disallowance of expenditure of Rs. 1,69,01,920/- w.r.t. earning exempt income alleging that the appellant did not suo moto disallow various direct and indirect cost associated with earning of exempt income. The Learned CIT Appeals also ignored the fact that appellant had already disallowed the ....
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....ent year and the annual average of the above monthly average is determined at Rs. 77,38,09,110/-. 1% of the annual average was calculated which works out to Rs. 77,38,091/-. On that basis, the Ld.AO confirmed amounting to Rs. 77,17,358/- which is liable for addition. The assessee already disallowed the expenses of Rs. 1,69,01,920/- and accordingly the amount is worked out to Rs. 2,46,19,278/-. After the completion of assessment, the addition is confirmed by disallowing under section 14A amount to Rs. 77,17,358/-. Aggrieved, the assessee filed an appeal before the ld. CIT(A). The Ld.CIT(A) upheld the assessment order. Being aggrieved, assessee filed an appeal before us. 4. The Ld.AR filed written submission which is kept in record assesse....
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.... the Act. 6. The Ld. DR argued and relied on the order of revenue authorities. The relevant paragraph 11 of the appeal order is reproduced below:- "11. It cannot be said that Rule 8D has been imposed mechanically by the AO. It is a fact that these exists an investment with an aim to earn exempt income. In fact, originally the appellant had arrived at such disallowance at Rs. 24,619,278/- under Rule 8D(ii) out of which Rs. 77,17,358/-, which was subsequently withdrawn in the revised return. The AO proceeded as he was not satisfied with the suo moto offering of disallowance of expenses at Rs. Rs. 1,69,01,920/- w.r.t. earning exempt income. The AO observed that although the appellant has made huge investments, the appellant did not....
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....1 and 2 of the appellant are dismissed." 7. We heard the rival submissions and considered the documents available in the record. The assessee has disallowed the expenses in original return under section 14A. Further, the assessee has filed a revised return and suo motu disallowed the expenses and withdrew the earlier suo moto addition. In question of statement of return, the assessee has complied with the law guided by the provisions. The issue as dealt with the entire disallowance what the assessee made in revised return was duly accepted by the Ld.AO in the assessment order. During the hearing, the Ld.AR placed the details of investments in Schedule VIII of the financial report which is reproduced as below:- "NON-CURRENT ASSET....
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....her hand, the assessee wrongly disallowed the expenses under section 14A in original return which was duly rectified by the revised return and the correct amount is disallowed under section 14A in that case. The Ld. AO during the proceedings of assessment has not recorded any such satisfaction. During the hearing Ld.DR was also not able to submit any specific satisfaction of Ld.AO before the Bench. Respectfully relied by the ld. AR on the order of Hon'ble Jurisdictional High Court in the case of PCIT-2 v. Bombay Stock Exchange Ltd.[2020] 113 taxmann.com 303 (Bombay). The relevant paragraphs are introduced as below: - "11. Non-satisfaction with the disallowance offered by the assessee has to be arrived at on the basis of the acco....