2026 (4) TMI 1478

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....Abhijit, Sr. D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 17.10.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as "CIT(A)"), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter refer....

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....9,13,613/- under section 14A of the Act. The Assessing Officer, invoking section 14A read with Rule 8D, disallowed Rs. 73,10,332/- (restricting a higher disallowance under Rule 8D(2)(iii) and also added the same amount to book profit under section 115JB of the Act. 3. Aggrieved against the assessment order, the Assessee filed an appeal before the CIT(A), who restricted the disallowance u/s. 14A....

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....pt income. 2. Interest u/s. 234B & 234C consequential: Levy of interest u/s. 234B and 234C is purely consequential. Upon deletion of the sustained disallowance, such interest requires appropriate recomputation. 3. Penalty u/s 271(1)(c) not sustainable: Initiation of penalty u/s 271(1)(c) on the very issue of disallowance under a debatable provision (Section 14A/Rule 8D) is untena....

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....] Travel and compliance expenses which are predominantly related to amalgamation, statutory compliances and do not have any proximate nexus with the earning of exempt income namely dividend income, tax-free bond interest and long term capital gain under section 10(38) of the Act. It is a settled proposition that only those expenditures which have a proximate connection with earning exempt income c....