ITA No. 3201/MUM/2024

Parties Involved

Facts Summary

The assessee filed a return of income on 15.10.2016 declaring total income at Rs.37,46,060/- under the normal provisions of the Income-tax Act, 1961 (in short ‘the Act’) at Rs.1,74,08,842/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices were issued and complied with. The assessee made investment in equities and earned dividend income on the same but did not make any disallowance for earning the said exempt income in terms of section 14A of the Act. Therefore, the Assessing Officer made disallowance in terms of section 14A r.w.r. 8D of the Income-tax Rules,1962 amounting to Rs.186,86,795/- both under the regular provisions as well as to the book profit u/s 115JB of the Act.…

Legal Issues

• 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance under 14A the AO has computed disallowance u/s 14A as per rule 8D?
• 2. The Ld. CIT(A) has erred in directing the AO to delete the addition u/s. 14A of the IT Act, while computing the income under normal provisions of the IT Act 1961.

Judgment Outcome

Decided in favour of Revenue.

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