COMPUTER AGE MANAGAMENT SERVICES,CHENNAI vs. ACIT, LTU-2, CHENNAI

This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Appeal No.CIT(A), Chennai -17/10564/2019-20 dated 05.09.2022. The assessment was framed by the ACIT, LTU-2, Chennai u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) for the assessment year 2017-18 vide order dated 19.12.2019.

The only issue in this appeal of assessee is as regards to the disallowance of expenses relatable to exempt income by invoking the provisions of section 14A r.w.s.8D of the Income Tax Rules, 1962 i.e., Rule 8D(2)(iii) of the Rules at Rs.1,50,66,123/- as against suo motto disallowance made by assessee at Rs.34,08,342/-. For this, assessee has raised various grounds, which need not be reproduced because those are argumentative.

We have heard rival contentions and gone through the facts and circumstance of the case. Admitted facts are that the assessee has earned exempt income at Rs.11.47 lakhs and claimed the same as exempt in the computation of total income. The AO noted that the assessee suo motto calculated disallowance u/s.14A r.w.rule 8D of the Rules, a sum of Rs.34,08,342/-. The AO not satisfied with the correctness of the assessee’s claim of disallowance of expenses relatable to exempt income at RS.34,08,342/-, he made disallowance under Rule 8D(2)(iii) at Rs.1,84,74,465/-, after allowing rebate of suo- motto disallowance of Rs.34,08,342/- he made balance disallowance of Rs.1,50,66,123/-. Aggrieved, assessee preferred appeal before CIT(A). 4. The CIT(A) confirmed the action of AO and confirmed the addition of Rs.1,50,66,123/- apart from suo-motto disallowance made by assessee at Rs.34,08,342/-. Aggrieved, now assessee came in appeal before the Tribunal.