ITA No.1211/Chny/2024 and ITA No.1215/Chny/2024

Parties Involved

Facts Summary

The case involves cross-appeals for the Assessment Year 2018-19, arising from the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre (NFAC), Delhi. The assessee, M/s. Sundaram Finance Holdings Ltd., a wholly-owned subsidiary of M/s Sundaram Finance Ltd., earned exempt dividend income and interest from tax-free bonds amounting to Rs.30.93 Crores. The assessee offered a disallowance of Rs.18.64 Lacs on account of expenditure, which was not acceptable to the Assessing Officer (AO). The AO applied Rule 8D and computed an aggregated disallowance of Rs.1078.64 Lacs, which included disallowance for proportionate carrying cost and employee benefit expenses. The disallowance was added to the assessee's income, leading to the framing of the assessment. The Ld. Commissioner of Income Tax (Appeals) directed the AO to compute disallowance by considering only those investments that yielded exempt income during the year. The assessee also sought TDS credit of Rs.68.43 Lacs, of which Rs.52.08 Lacs was reflected in Form 26AS. The remaining TDS credit of Rs.16.35 Lacs was not considered due to the assessee's failure to submit relevant details.…

Legal Issues

• 1. Disallowance u/s 14A
• 2. TDS Credit

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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