VOLTAMP TRANSFORMERS LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-4(1)(1), AHMEDABAD

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ITA 134/AHD/2026Status: DisposedITAT Ahmedabad03 August 2026AY 2021-225 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the disallowance under Section 14A, relying on a Gujarat High Court decision. The other issues regarding sundry creditors and Section 80JJAA deduction were restored to the AO for fresh verification and speaking orders.

What were the facts?

The assessee appealed against the CIT(A)'s orders confirming disallowance under Section 14A, addition for written-back sundry creditors, and disallowance of deduction under Section 80JJAA. The assessee argued lack of opportunity and double taxation.

What were the issues?

Whether the disallowance under Section 14A was justified without proper satisfaction by the AO, and if additions for written-back creditors and Section 80JJAA deductions were correctly made without proper opportunity and verification.

Which sections of the Income-tax Act were involved?

Section 14A,Section 80JJAA,Section 143(1),Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Appellant: Shri Dhinal Shah, AR
Hearing: 29/07/2026Pronounced: 03/08/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ] ] Before Shri Sanjay Garg, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member आयकर अपील सं /ITA Nos.133&134/Ahd/2026 िनधा�रण वष� /Assessment Years : 2020-21 & 2021-22 Voltamp Transformers Ltd., DCIT 312, Sanman-II, Opp. Reliance बनाम/ Circle-4(1)(1), v/s. Petrol Pump, Prahladnagar, Ahmedabad Satellite, Ahmedabad-380054 �थायी लेखा सं./PAN: AAACV5048G (अपीलाथ�/ Appellant) (�� यथ�/ Respondent)

Assessee by : Shri Dhinal Shah, AR Revenue by : Shri Arvind Kumar Namdeo, Sr. DR सुनवाई की तारीख/Date of Hearing : 29/07/2026 घोषणा की तारीख /Date of Pronouncement: 03/08/2026 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the assessee against the separate orders of the Learned Commissioner of Income Tax (Appeals), [hereinafter referred to as ‘Ld. CIT(A)’], National Faceless Appeal Centre (in short “NFAC”), Delhi dated 30/12/2025 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Years (AYs) 2020-21 & 2021-22 respectively. ITA No. 133/Ahd/2026 is taken as the lead case for the purpose of narration of facts.

ITA Nos.133&134/Ahd/2026 Voltamp Transformers Ltd. vs. DCIT Asst.Year 2020-21 & 2021-22 2 ITA No. 133/Ahd/2026 (A.Y. 2020-21)

2.

The assessee has raised the following grounds of appeal: “01. The learned CIT(A) has erred in confirming the expenses of Rs. 67,19,485 [Rs. 93,13,084 less Rs. 25,93,599 suo-moto disallowed by the assessee] under Section 14A read with Rule 8D in as much as the AO has not expressed the satisfaction to show that the assessee has incurred more expenditure than suo-moto disallowance of Rs. 25,93,599 which is actually incurred for earning exempt income. 1.1 The appellant says and submits that the Hon’ble ITAT in the earlier year on similar facts has accepted the disallowance made by the appellant under Section 14A without resorting to Rule 8D. 02. The learned CIT(A) has erred in confirming the addition of Rs. 1,22,07,559 [made adjustment under Section 143(1) by CPC] being sundry creditor written back to Profit & Loss account in as much as such amount is already offered to tax [credited to Profit & Loss account under the head “Other Income”] and therefore making an addition again amounts to double taxation. 03. The learned CIT(A) has erred in confirming the disallowance of deduction under section 80JJAA amounting to Rs. 16,76,302 [made adjustment under Section 143(1) by CPC] on the ground that the assessee has not submitted the eligibility of condition and details of employees as required by Section 80JJAA in as much as the assessee has submitted complete details of claim during the course of regular assessment along with CA Certificate in Form No. 10DA and therefore eligible for deduction under Section 80JJAA.” 3. At the outset, the Ld. Counsel for the assessee has submitted that in the assessment order passed u/s 143(3) of the Act, the Assessing Officer (hereinafter referred to as “the AO”) has just repeated/reaffirmed the addition which were made while processing the return u/s 143(1) of the Act. The Ld. Counsel has further submitted that even before making the impugned additions u/s 143(1) of the Act, the assessee was not given any opportunity to contest the same. The Ld. Counsel for the assessee, therefore, has submitted neither the assessee has been allowed any opportunity of hearing during the processing of the return u/s 143(1) of the Act, nor during the assessment proceedings

ITA Nos.133&134/Ahd/2026 Voltamp Transformers Ltd. vs. DCIT Asst.Year 2020-21 & 2021-22 3 u/s 143(3) of the Act. The Ld. Counsel for the assessee has further submitted that so far as the addition made by the AO u/s 141(1) of the Act is concerned, the assessee has already paid the due taxes and that it is a double addition of the same amount made by the AO. So far as the disallowance of deduction u/s 80JJAA is concerned, the Ld. Counsel has submitted that the assessee has already furnished the details of the employees as required in the Audit Report, which was furnished with the Return of Income but, the same, somehow, has escaped the attention of the AO. So far as the disallowance u/s 14A is concerned, the Ld. Counsel for the assessee has submitted the assessee suo moto offered an amount of Rs. 25.93 lakhs for taxation u/s 14A of the Income Tax Act. That the AO without recording any satisfaction about the suo-moto disallowance calculated by the assessee vis-à-vis the accounts of the assessee, has made the disallowance by mechanically following the procedure prescribed under Rule 8D(2) of the Act.

4.

So far as the issue of disallowance u/s 14A is concerned the same is covered in favour of the assessee by various decisions of the Higher Courts, even in the own case of the assessee for A.Ys. 2010-11, 2011-12 and 2012-13 vide order of the Hon’ble Gujarat High Court dated 14.03.2018 passed in Tax Appeal No 170/2018. Therefore, in light of the decision of the Hon’ble High Court in the own case of the assessee for earlier assessment years, the disallowance u/s 14A of the Act made by the AO is order to be deleted.

5.

So far as the addition u/s 141(1) and the disallowance u/s 80JJAA is concerned, the issue is restored to the file of the AO for verification of

ITA Nos.133&134/Ahd/2026 Voltamp Transformers Ltd. vs. DCIT Asst.Year 2020-21 & 2021-22 4 the contention of the assessee and thereafter, to pass a speaking order on both the aforesaid issues.

6.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.

ITA No. 134/Ahd/2026 (A.Y. 2021-22)

7.

The assessee has raised the following grounds of appeal:

“01. The learned CIT(A) has erred in confirming the expenses of Rs. 86,61,592 [Rs. 1,06,58,724 less Rs. 19,97,132 suo moto disallowed by the assessee] under Section 14A read with Rule 8D inasmuch as the AO has not expressed the satisfaction to show that the assessee has incurred more expenditure than suo moto disallowance of Rs. 19,97,132/- which is actually incurred for earning exempt income. 1.1 The appellant say and submits that the Hon’ble ITAT in the earlier year on similar facts has accepted the disallowance made by the appellant under Section 14A without resorting to Rule 8D.” 8. The sole issue involved in this appeal is relating to the addition made by the AO on account of disallowance u/s 14A of the Income Tax Act on account of expenditure incurred for earning the tax exempt income.

9.

In view of our finding given above in assessee’s appeal in ITA No. 133/Ahd/2026, the impugned addition made by the AO u/s 14A of the Act is order to be deleted.

10.

In the result, the appeal of the assessee stands allowed.

ITA Nos.133&134/Ahd/2026 Voltamp Transformers Ltd. vs. DCIT Asst.Year 2020-21 & 2021-22 5 11. In the combined result, the appeal filed by the assessee in ITA No. 133/Ahd/2026 for A.Y. 2020-21 is treated as allowed for statistical purposes and the appeal filed by the assessee in ITA No. 134/Ahd/2026 for A.Y. 2021-22 stands allowed.

Order pronounced in the Open Court on 03/08/2026.

Sd/- Sd/- (Narendra Prasad Sinha) (Sanjay Garg) Accountant Member Judicial Member

अहमदाबाद/Ahmedabad, िदनांक/Dated 03/08/2026 Tanmay, Sr. P.S. TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु� अपील ( ) / The CIT(A)-(NFAC) 5. िवभागीय �ितिनिध आयकर अपीलीय अिधकरण अहमदाबाद /DR,ITAT, Ahmedabad. , , 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad

1.

Date of dictation (dictation pad is attached with the file)) : 29.07 2026 2. Date on which the typed draft is placed before the : 03.08.2026 Dictating Member. 3. Date on which the approved draft comes to the Sr.P.S./P.S : 03.08.2026 4. Date on which the fair order is placed before the Dictating : Member for pronouncement. 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the : 03.08.2026 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. : 03.08.2026 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar : for signature on the order. 10. Date of Despatch of the Order :

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