TaxTMI 
TaxTMI 
2026 (3) TMI 892
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....al for the earlier assessment year has already been dismissed by this Court as reported in [2016] 72 taxmann.com 325 (Bombay) and even SLP against such decision has been dismissed. This submission has already been recorded in the order dated 03/04/2025 passed by this Court. The said substantial questions of law being (i) and (ii) read thus : "(i) Whether in the facts and circumstances, TP adjustment made by the TPO of Rs.130.97 crore is required to be contested before the Hon'ble High Court? This issue is to be considered in the factual matrix obtaining in the case and the decision of the Tribunal/Bombay High Court in A.Y. 2006-07. (ii) Whether the separate TP adjustments made in respect of various transactions by the ....
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.... crores u/s. 10(15),10(34) and 10(35) of the Act respectively, that it had offered suo-motu disallowance of Rs. 19,75,103/-. He applied the provisions of Rule 8D of the Income tax Rules, 1962 (Rules) to work out the expenditure attributable to exempt income and made a disallowance of Rs. 7.72 lakhs under the head 'interest expenditure' and Rs. 2.78 crores under the head '0.5% of average investment'. 6.1. The DRP, after considering the objections of the assessee held that out of the total interest expenditure of Rs.21.78 crores expense to the tune of Rs.20.64 crores, related to export income, should not be considered for working out the disallowance under section 14A of the Act. The AO after considering the disallowance ma....
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....nd it reads as under: "3.26. So far as, the expression "satisfaction" is concerned, it postulates a bona-fide belief about the incorrectness of the claim of the assessee and existence of objective reason for such belief. Further, this expression also does not mean a purely subjective satisfaction of the Assessing Officer or pretence based on suspicion and conjuncture but must be a belief held in good faith and founded on material that is not irrelevant or arbitrary. In the light of the discussion, we are of the view, the Ld. Assessing Officer cannot reject the claim of the assessee merely because it is not as per Rule-8D. To invoke Rule-8D, the Assessing Officer should provide a justifiable reason for not accepting the claim of the....
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....e-8D and computed the amount of disallowance, which cannot be said to be justified. At best, the disallowance may be restricted as suo-moto made by the assessee. Thus, no further disallowance was required to be made." Respectfully following the above two orders of the Tribunal, we decide effective grounds 17-18 (Gs.OA 26-28) in favour of the assessee. 14. Last ground of appeal is about not allocating interest for working disallowance u/s.14A of the Act. While completing the assessment the AO had made 14A disallowance, as stated in the earlier paragraphs of our order. 14.1. Deciding the objections, filed by the assessee, the DRP held that the interest pertained to exports. It directed AO to allocate the same to Sec....