2025 (7) TMI 1887

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..... 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 06.12.2016 for Assessment Year 2014-15. 2. Grounds taken by the Assessee are reproduced as under: "1. On facts and circumstances of the case and in law, the order passed by Ld. CIT (A) ignoring the requests of personal hearing before passing the impugned appellate order in a violation of principles of natural justice as well as mandatory procedure prescribed in "Faceless Appeals Rules 2021," is an arbitrary order and is bad in law. The same needs to be quashed and the grounds of appeal needs to be allowed. 2. Addition uls. 14A r.w.r SD of Rs. 33,68,410/- a. On facts and circumstances of the case and in law, Ld. CIT (A) erred in confirming the excess ....

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....ing off share of loss from certain other partnership firms. The details of profit/loss from different partnership firms in which assessee had made investments is tabulated below:   Name of Firm/LLP Rs. i) Friends Development Corporation 56,71,988 ii) Dosti Enterprises (34,73,796) iii) Dosti Development Corporation (8,217) iv) Crystal Builders & Developers (97,187) v) Dosti Sea view LLP 4,942   Total 20,97,729 3.2. While computing total income, assessee made a suo moto disallowance of Rs. 5,13,698/- u/s. 14A towards expenses in respect of exempt income earned during the year. The details of suo moto disallowance made by the assessee is by applying Rule 8D(2)(iii) of the Income Tax Rules, 1962 (The Rules) ....

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....ce assessee had already made a suo moto disallowance of Rs. 5,13,698/-, ld. Assessing Officer made further addition for the balance of Rs. 33,68,411/-. The details of calculation made by the ld. Assessing Officer is tabulated below:   PARTICULARS Amt. (Rs.) Remarks 1. Direct expenses attributable Nil   2. Interest claimed (A)* average investments(B)/average of total assets (C) i.e. A*B/C Nil   3 0.5% of the average investments (46,33,75,670+1,08,94,67,703)/2*5/100 38,82,108/-     Total 38,82,108/-   3.4. While re-computing the disallowance u/s. 14A, ld. Assessing Officer recorded his observations in para-4 of the impugned assessment order to point out that assessee while calculat....

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.... squarely covered by the decision of the Coordinate Bench. From the perusal of the said order, from para-16, it is noted that the Coordinate Bench has observed that ld. Assessing Officer is supposed to point out mistake/deficiency in the working given by the assessee, only then he can substitute its own working with that, which is missing in the case. 5. In the light of these observations in the present case before us, we note that ld. Assessing Officer in the impugned order in para-4 has pointed out the mistake/deficiency in the working of the suo moto disallowance by the assessee by stating that all the investments have not been taken into consideration for calculating the disallowance to be line with Rule 8D(2)(iii). Further, we note th....