2026 (1) TMI 365

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.... grounds taken by the assessee in the two appeals were identical, both the matters were heard together and are being disposed off vide this common order for the sake of convenience. We will first take up the appeal in ITA No.1581/Ahd/2025 for the AY 2018- 19. ITA No. 1581/Ahd/2025 3. The brief facts of the case are that the assessee had filed its return of income for AY 2018-19 on 10.10.2018 declaring total income of Rs. 19,04,38,060/- under normal provisions and Rs. 16,75,71,092/- under MAT provisions. The case was selected for scrutiny under CASS. In the course of assessment, the AO had made various additions and the assessment was completed u/s 143(3) on 08.05.2021 at total income of Rs. 20,48,60,563/-. 4. Aggrieved with the ord....

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....interest free funds of its own and, therefore, the question of disallowing the interest by invoking the provision of Section 14A did not arise. In this regard, he relied upon the decision of Hon'ble Supreme Court in the case of South Indian Bank Ltd. 130 taxmann.com 178 (SC). The Ld. AR also relied upon various judicial decisions in support of his contention that no disallowance u/s 14A was called for if no exempt income was earned during the year. 7. Per Contra, Shri Yogesh Mishra, the Ld. Sr. DR relied upon the order of the lower authorities on this issue. 8. We have considered rival submissions. There is no dispute to the fact that no exempt income was earned by the assessee during the year. It is a settled position that for the ye....

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....ed in law and on facts in making disallowance of Rs. 4003808/-u/s 14A. 4. The Ld. A.O. erred in law and on facts in making addition of Rs. 40,03,808/- being disallowance made u/s 14A while calculating book profit for MAT. 5. The Ld. A.O. has erred in law and facts in disallowing expenses incurred for employees of Rs. 40,45,000/-. 6. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal." 11. Shri M S Chhajed, Ld. AR of the assessee fairly conceded that the assessee had earned exempt income in the form of dividend during the current year. He, therefore, requested that the disallowance made by the AO may be restricted to the extent of exempt income earned by ....