2019 (3) TMI 1840 - AT - Income Tax

Disallowance u/s 14A r.w. Rule 8D(iii) - indirect expenditure for earning exempt income - HELD THAT - As decided in own case. 2017 (3) TMI 1832 - ITAT MUMBAI Calculation of disallowance as per Rule 8D(2)(iii) is erroneous as the AO without assigning any reason did not reduce the investment in mutual funds and group concern which does not quire incurrence of major expenditure.We restore this ground back to the file of A.O. for fresh consideration.

Summary

Issues:
1. Challenge of addition under section 14A r.w. Rule 8D(iii) of the Act for the assessment years 2012-13 & 2013-14.

Analysis:

Issue Nos. 1 to 2:
The assessee contested the addition of ?2,34,17,801 under section 14A r.w. Rule 8D(iii) of the Act. The representative argued that this issue had been previously addressed by the ITAT in the assessee's case for A.Ys. 2010-11 & 2011-12, where it was decided that strategic investments made by the assessee should not be considered for disallowance under Rule 8D(2)(iii). The Tribunal directed the AO to reconsider the issue for A.Y. 2009-10. Following this precedent, the ITAT in the current case set aside the CIT(A)'s decision and remanded the issue to the AO for fresh consideration. The ITAT emphasized providing the assessee with a fair opportunity to present its case. Consequently, the issues were decided in favor of the assessee against the revenue.

Conclusion:
The ITAT allowed all appeals filed by the assessee for statistical purposes, setting aside the CIT(A)'s decision and remanding the issues to the AO for fresh consideration based on the Tribunal's directions. The judgment emphasized providing the assessee with a fair opportunity to present its case in accordance with the law.