2011 (9) TMI 942 - AT - Income Tax

Summary

Issues involved:
Appeals by Revenue for assessment years 2006-07 and 2007-08 challenging CIT(A) orders.

Issue 1: Disallowance u/s 14A of the Act
- Assessee, a Government of India Undertaking, challenged disallowance under section 14A for tax-free income.
- Assessing Officer computed disallowance under Rule 8D following ITAT decision.
- CIT(A) estimated disallowance at Rs. 25,000 each for both years based on Bombay High Court ruling.
- ITAT set aside the matter for AO to examine expenditure nexus with exempt income as per Bombay High Court decision.

Issue 2: Interest on Self-Assessment Tax
- AO did not allow interest u/s 244A on refund from self-assessment tax.
- Assessee claimed interest citing Madras High Court decision.
- CIT(A) allowed interest on refund from excess self-assessment tax.
- ITAT upheld CIT(A) decision based on Mumbai Bench ruling.

In conclusion, ITAT dismissed Revenue's appeals for both years, upholding CIT(A) orders on disallowance u/s 14A and interest on self-assessment tax.