APAR CORPORATION PVT LTD, MUMBAI vs. DCIT CC6(1), MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
“A” BENCH MUMBAI
BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
Apar Corporation Pvt. Ltd.
Apar House, Corporate Park,
Building No.5,
Sion
Trombay
Road,
Chembur,
Mumbai – 400071. Vs.
DCIT CC 6(1), Mumbai
19th Floor,
Air India Building,
Mumbai - 400021
PAN/GIR No. AABCA1405B
(Applicant)
(Respondent)
Assessee by Shri Malav Sheth
Revenue by Shri Surendra Mohan
Date of Hearing
09.12.2025
Date of Pronouncement
16.12.2025
आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order dt. 27.06.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2017-2018. The Assessee has raised the following grounds of appeal:
“1. Additional Disallowance u/s 14A r.w. Rule 8D of`
15,91,063/-.
2
Apar Corporation Pvt. Ltd.
1 On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the additional disallowance made by the learned AO u/s 14A r.w.Rule 8D without appreciating that the appellant has already suo-moto disallowed an amount of Rs. 1,06,70,747/- u/s 37(1) out of total common administrative cost amounted to Rs 1,32,31,837/-; and also made disallowance of Rs. 1,19,11,870/- being expenses related to Immovable property while computing total income. Therefore, sufficient disallowance was already made by the appellant. Hence additional disallowance u/s 14A was not called for.” 2. The only effective ground raised by the assessee in the present appeal relates to challenging the order of Ld. CIT(A) in confirming the additional disallowance made by AO u/s 14A r.w.r 8D of the Act. 2. We have heard the counsels for both the parties, perused the material placed on record, judgments cited before us and also the orders passed by the revenue authorities. From the records we noticed that assessee company is engaged in activity of running of immovable property and investments in shares and securities. The assessee had filed its return of income u/s 139(1) of the Act on 12.10.2017 with a returned income of Rs. 1,79,49,020/-. The said return was scrutinized and ultimately order u/s 143(3) of the Act was passed thereby assessing the total income of Rs. 2,83,45,280/-. The summary of additions made in the case of the assessee are given below:
3
Apar Corporation Pvt. Ltd.
Sr.
No.
Nature of disallowance made
Amount of disallowance made
Remarks
1. Disallowance u/s 14A
15,91,063
Part relief of Rs.
2,70,263,/- is given by the Ld. CIT(A) vide part
5.3.4, page 13 of his order
This is further contested before the Hon’ble
ITAT
Mumbai.
2. Disallowance of Municipal taxes and maintenance charges under the head
Income from house property
86,05,199
Full relief is given by the Ld. CIT(A)
3
The said additions were challenged by the assessee before Ld. CIT(A) but Ld. CIT(A) partly allowed and restricted the additions. Therefore aggrieved by the order passed by ld. CIT(A) the assessee has filed the present appeal before us on the grounds mentioned herein above.
4. From the records, we noticed that assessee had earned the following exempt income.
Sr. No Particulars
Amount
1. Long term capital gains exempt u/s 10
77,74,261
2. Dividend income exempt u/s 10
47,16,826
Total
1,24,91,087
5. However, out of total expenses of Rs. 5,53,84,413/- amount of disallowance already made in the return of income is Rs. 5,10,60,572/-, which is summarized as under:
4
Apar Corporation Pvt. Ltd.
Sr.
No.
Particulars
Amount
Ref
Page
Nos in CIT(A) order
1. Expenses relating to house property income
1,19,11,870
5 &6
Expenses not allowable including the expenses relatable to earning investment income 2,68,86,892 6 & 7 3 Common administrative / overhead expense 1,06,70,747 Page 7, 1st Para 4 Additional .5% of average investments 15,91,063 Page 7 Para 2.5
Total
5,10,60,572
It was argued on behalf of the assessee that the assessee had himself made disallowance therefore no further disallowance was envisaged u/s 14A of the Act. However, the AO went on the wrong premise and without appreciating the contentions of the assessee, went on to pass the assessment order by merely mentioning that the assessee itself had made disallowance u/s 14A of the Act by resorting to old Rule 8D methodology and therefore made additional disallowance of the remaining 0.5% of the average investment amounting to Rs. 15,91,063/-. 7. After having gone through the entire facts of the present case and the documents placed on record, we found that assessee had already made disallowance which takes care of all the direct and also allocable expenses debited to the profit and loss account which can be said to be relatable to earning exempt income. More particularly out of the common administrative cost / overhead expenses amounting to Rs. 1,06,70,747/- had already been 5 Apar Corporation Pvt. Ltd.
disallowed though u/s 37(1) of the Act in the return of income, the details of which had already been placed at page No. 25 of the paper book.
On perusal of the said common overhead cost, we found that the expenses mentioned in sr. no. 2,3,4 & 6
relates to allocation of the expenses such as salary, professional fees, motor car expenses of two employees and one professional who are involved in the investment activity which generate exempt income. Further, the expenses mentioned at sr. no. 1 & 5 relates to direct expenses incurred in relation to the investment activity and earning exempt income. Thus, on perusal of the said common overhead cost, we noticed that the expenses mentioned in sr. no. 7 to 10 relates to indirect / common expenses which were allocated for those which can be stated as in relation to investment activity and earning exempt income.
Thus in our view the said suo moto disallowance of Rs. 1,06,70,747/- is pari metiria similar to the methodology prescribed under Rule 8D(2)(ii). In fact the said amount of Rs. 1,06,70,747/- is more than that calculated under Rule 8D which comes to Rs. 31,82,126/-. Since the suo moto disallowance was more than that calculated under Rule 8D of the Act therefore no further disallowance was warranted. But still the assessee had made further disallowance of Rs. 15,91,063/- suomoto by 6 Apar Corporation Pvt. Ltd.
adopting computational machinery of the erstwhile rule 8D which was not actually needed under the facts of the present case. However as per the assessee, out of abundant caution they made the said disallowance strictly on a ‘without prejudice’ and admitting basis. Thus in our view having made the said disallowance u/s 14A of the Act, it cannot be construed that assessee accepts the contention that more disallowance other than those already made was requires to be made.
9. On the above preposition, we draw strength from the decision of Hon’ble Supreme Court in the case of Godrej &
Boyce Manufacturing Company Ltd. Vs. DCIT [2017] 81
taxmann.com 111(SC)
10. On the contrary, the Ld. DR failed to contradict or place on record any other documents in order to rebut the contentions so raised by the assessee.
11. Therefore taking into consideration the entire facts and circumstances as discussed by us above and also keeping in view the decision of the Hon’ble Supreme Court in the case of Godrej & Boyce Manufacturing Company
Ltd (supra). We allow the grounds raised by the assessee and direct the AO to delete the disallowance made by him u/s 14A r.w.w 8D of the Act.
7
Apar Corporation Pvt. Ltd.
In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 16.12.2025 (PRABHASH SHANKAR) (SANDEEP GOSAIN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated 16/12/2025
KRK, Sr. PS
आदेश की ितिलिप अेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. संबंिधत आयकर आयु / The CIT(A)
4. आयकर आयु(अपील) / Concerned CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण,मुबई/ DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदेशानुसार/BY ORDER,
सािपत ित ////
उप/सहायक पंजीकार ( Asst.