2025 (6) TMI 299

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....IT(A) has erred in law and on facts in restricting the addition to Rs. 4,61,744/- as against the disallowance of Rs. 44,35,176/- made by the Assessing Officer under Section 14A of the Act. 2. On the facts and circumstances of the case, Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored." 3. The assessee filed his original return of income for the Assessment Year (A.Y.) 2009-10 on 14.10.2010 declaring total income at Rs. 83,40,540/-. The assessment was finalised on 22.10.2012 under Section 143(3) of the Income Tax Act, 1961, assessing the income of the assessee at Rs. 87,10,080/-. The a....

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..... 1,60,592/- in shares. Since the borrowed funds have been used for making investment, as observed by the Assessing Officer, which have earned both taxable as well as exempt income, thus the Assessing Officer gave the finding that the assessee is clearly covered under the provision of Section 14A of the Act. The assessee was having exempt income to the tune of Rs. 9,40,77,973/- being the share in profit earned from partnership firm and dividend from hares held. The assessee has claimed expenses of Rs. 69,60,614/-. The Assessing Officer made disallowance under Section 14A i.e. amount of expenditure recorded in relation to income which does not form part of total income under the Income Tax Act as determined in accordance with the method pres....

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....he audit is found be correct. As such, the remedial action u/s.147of the Act is suggested for which time limit expires on 31/03/2017. May 1 therefore, request your goodself to kindly accord the administrative approval for taking remedial action u/s. 147 of the income-tax Act." The Ld. DR submitted that the CIT(A) has not taken cognisance of the audit objection and has restricted the addition to the extent of Rs. 4,61,744/- as against the disallowance of Rs. 44,35,176/- made by the Assessing Officer under Section 14A of the Act. The Ld. DR submitted that as per Section 14A of the Act, expenditure for earning exempt income is not an administrative deduction for computation of total income. The expenditure disallowable has to be determined ....