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TMI Blog2021 (9) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the confirmation of disallowance of Rs. 65,14,825/- under section 14A of the Income-tax Act, 1961 (hereinafter also called 'the Act'). 3. Briefly stated, the facts of the case are that the assessee received dividend income of Rs. 41,43,79,834/- during the year which was claimed as exempt u/s. 10(34) of the Act. The assessee was called upon to explain as to why part of the expenses should not be treated as incurred in relation to the exempt income. The assessee tendered its explanation submitting that a suo motu disallowance of Rs. 5,055/- was offered by the assessee u/s. 14A of the Act. It was further stated that for the assessment year 2000-2001, the disallowance made u/s. 14A by the AO was restricted by the ld. CIT(A) to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er this Act". 5. Adverting to the assessment order, it is seen that the AO recorded that the assessee earned exempt dividend income of Rs. 41.43 crore in para 5.1. He called upon the assessee to furnish reasons for not making disallowance in respect of expenses incurred for earning the exempt income. After taking note of the assessee's explanation, the AO, in para nos. 5.2 and 5.3, concluded as under: "5.2 On perusal of the profit and loss of the assessee company it is seen that the assessee had total revenues of Rs. 5992.32 lakhs and total expenses at Rs. 1108.19 lakhs. The ratio of the dividend income to the total revenue is 69.15%. Therefore at the most part of 69.15% of the indirect expenditure of Rs. 803.49 lakhs can be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o "one to one correlation with regard to the expenditure vis-à-vis the exempt income, i.e. dividend". In view of the above overwhelming satisfaction recorded by the AO as to the correctness of the assessee's claim in this regard, we are not impressed with the ld. AR's submission that the AO did not record satisfaction in terms of section 14A(2) of the Act. 7. Now coming to the merits of the addition, it has been brought to our notice that similar issue came up for consideration before the Tribunal in the assessee's own case for the immediately preceding assessment year 2012-13. Vide order dated 15-11-2018, the Tribunal in ITA No. 3059/PUN/2017 has restored the matter of section 14A disallowance to the file of AO with cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner as for the preceding year, the AO required the assessee to explain the reasons as to why part of the expenses should not be disallowed. The assessee tendered explanation on similar lines by stating that it made suo motu disallowance of Rs. 5,558/- and further that the disallowance of Rs. 1.00 lakh was upheld by the Tribunal u/s. 14A for the assessment year 2000-01. The assessee further urged that the disallowance for the instant year should also be restricted to the same level. The AO recorded his satisfaction in para nos. 5.3 and 5.4 in the same manner as done in his order for the assessment year 2013-14, reproduced above. Following the raison d'etre assigned hereinabove for the preceding year, we hold that the AO recorded prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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