ITA No. 579/MUM/2024

Parties Involved

Facts Summary

The assessee, 360 One WAM Limited, had filed an income tax return for the Assessment Year 2020-21 on 05/02/2021, which was processed under Section 143(1) of the Income Tax Act, 1961. The income of the appellant was completed at INR 60,76,48,400/- as against returned income of INR 57,47,76,340/-. Subsequently, the case of the appellant was selected for regular scrutiny, which culminated into an Assessment Order dated 23/09/2022, passed under section 143(3) read with Section 144B of the Act, whereby the total income of the return was assessed at INR 77,66,42,849/- after making addition of INR 16,89,94,449/- under section 14A of the Act. The appellant was aggrieved by the order and preferred an appeal before the Commissioner of Income Tax (Appeals) which was dismissed. The appellant then filed the present appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Assessing Officer erred in not recording dissatisfaction in the assessment order on the amount of suo moto disallowance computed by the appellant u/s 14A of the Act, thereby violating the mandatory provision of section 14A(2) of the Act.
• 2. Whether the Assessing Officer erred in not appreciating that the disallowance of Rs. 10,00,000/- made by the appellant in its Income Tax Return towards disallowance u/s 14A r.w Rule 8D is fair and reasonable considering the facts and circumstances of the case.
• 3. Whether the Assessing Officer erred in not appreciating that the disallowance on ad-hoc basis of 1% of average investments is uncalled for and unreasonable.
• 4. Whether the Assessing Officer erred in not appreciating that the appellant has made investments in the subsidiary companies to retain management control of the said subsidiaries and not to earn income.
• 5. Whether the Assessing Officer erred in not appreciating that the expenses of the subsidiary companies are being borne by the subsidiary companies themselves and no substantial expenditure is required to be incurred by the appellant for making and maintaining these investments.
• 6. Whether the Assessing Officer erred in not appreciating that the appellant has not received copy of intimation u/s 143(1) under which the aforesaid addition of Rs.3.30,72.000/- has been made and as such the appellant is unaware of the grounds of addition of Rs. 3,30.72.000/-

Judgment Outcome

Decided in favour of Assessee.

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