2025 (7) TMI 1428

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.... Year 2016-17, date of order 28/01/2025. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, Circle-1(1)(2), Mumbai [in short, the "Ld. AO"] passed under section 143(3) of the Act, date of order 30/12/2018. 2. The revenue has taken the following grounds of appeal:- "1) Whether on the facts and circumstances of case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,99,54,828/- made by the AO u/s 14A of the Act? 2) Whether on the facts and circumstances of case, the Ld. CIT(A) was right in restricting the suo moto disallowance made by the assessee of Rs. 59,50,496/- 3) Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in....

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....s. 59,50,496/- under section 14A of the Act, read with Rule 8D(2)(iii) of the Income-tax Rules, 1962. This disallowance was computed at 0.5% of the average value of investments that actually yielded dividend income. The assessee disclosed that the dividend was received only from investments in: M/s Snowman Logistics Ltd - Rs. 104,16,99,000/-, and M/s Gateway East India Pvt. Ltd - Rs. 14,84,00,000/- Accordingly, the disallowance was restricted to the above dividend-yielding investments. However, the Ld. AO rejected the assessee's working and applied Rule 8D(2)(iii) on the entire average investment portfolio of Rs. 518,10,64,868/-, thereby computing the disallowance at Rs. 2,59,05,324/-. Consequently, the total disallowance under ....

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....Power Ltd (2024) 159 taxmann.com 1626 (Mumbai Tribunal), by holding as below:- "19) Assessee aggrieved with the disallowance made by the learned AO, approaching the CIT-A who held deleted the disallowance holding that in absence of any exempt income disallowance was impermissible. Accordingly, he deleted the disallowance under section 14 A read with rule 8D in the normal computation of total income as well as computation of book profit under section 115JB of the act. All other contentions raised by the assessee were not dealt with by the learned CIT-A. Therefore, aggrieved with the order of the learned CIT-A both the parties are in appeal before us. 20) In the appeal of the assessing officer the only contention is that eve....

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....India Ltd (2022) 141 taxmann.com 289 (Del) where it was held that the insertion of Explanation to section 14A to Finance Act, 2022 is only applicable prospectively and not retrospectively and so is not applicable for the impugned assessment year. Further, the Tribunal has been holding consistently that the calculation of disallowance under section 14A should be made only on the income yielding investment. So, on the entire amount of the investment should not be considered. 6. We have heard the rival submissions and perused the material available on record. The issue under consideration is that the assessee, on a suo motu basis, disallowed a sum of Rs. 59,50,496/-, being 0.5% of the average value of investments that actually yielded divid....