2018 (11) TMI 1869 - AT - Income Tax

Disallowance u/s.14A read with Rule 8D - AO worked out the disallowance being, percent of average value of investment under Rule 8D(2)(iii) - HELD THAT - As relying on assessee's own case 2018 (10) TMI 1911 - ITAT PUNE we set-aside the impugned order and remit the matter to the file of AO for complying with the directions given by the Tribunal for the earlier four assessment years and then deciding the issue for the year under consideration accordingly. Assessee appeal is allowed for statistical purposes.

Summary

Issues:
Confirmation of disallowance under section 14A of the Income-tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962.

The judgment pertains to an appeal by the assessee against an order passed by the CIT(A) in relation to the A.Y. 2012-13. The only issue raised was the confirmation of disallowance amounting to ?52,86,109/- under section 14A of the Income-tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1962. The assessee, engaged in the business of manufacturing and selling scooters and parts, earned an exempt dividend income of ?41.06 crore during the year. The AO, in the absence of any disallowance offered by the assessee under section 14A, invoked Rule 8D and calculated the disallowance. The ld. CIT(A) upheld the assessment order on this point.

The Tribunal noted that a similar issue had been raised in the assessee's appeal for the immediately preceding four assessment years. In a previous order, the Tribunal had restored the matter to the file of the AO with specific directions. As there were no distinguishing features highlighted for the year under consideration compared to the preceding years, the Tribunal followed the precedent and set aside the impugned order. The matter was remitted to the file of the AO for compliance with the directions given for the earlier four assessment years and then deciding the issue for the year under consideration accordingly. Consequently, the appeal was allowed for statistical purposes.

In conclusion, the Tribunal's judgment focused on the confirmation of disallowance under section 14A of the Income-tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1962. The Tribunal set aside the order and remitted the matter to the AO for compliance with earlier directions, following the precedent set in previous assessment years. The appeal was allowed for statistical purposes, emphasizing the need for consistent application of rules and procedures in such cases.