DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-16(1), C.R. BUILDING, IP ESTATE, NEW DELHI vs. MARUTI SUZUKI INDIA LTD., PALAM GURGAON ROAD, HARYANA

ITA 2619/DEL/2026Status: DisposedITAT Delhi30 September 202618 pages
AI SummaryPartly Allowed

What were the facts?

This case involves cross-appeals by M/s Maruti Suzuki India Ltd. (the assessee) and the Deputy Commissioner of Income Tax (the revenue) concerning the assessment year 2010-11. The dispute stems from an assessment order dated March 29, 2014, which was revised following directions from the Dispute Resolution Panel (DRP). The final assessment order dated January 20, 2015, assessed the assessee's income at ₹4649,87,40,313/-. Subsequently, the Income Tax Appellate Tribunal (ITAT) passed an order on February 9, 2023, setting aside certain issues back to the Assessing Officer (AO). The AO's subsequent order dated March 31, 2024, made additions including disallowance under Section 43B, disallowance under Section 14A read with Rule 8D, re-characterization of gains from share sales, and disallowance of purchases for non-deduction of TDS.

What did the Tribunal hold?

The Tribunal held that the issue regarding the re-characterization of gains from the sale of shares and securities as business income was squarely covered by its own previous decision in the assessee's own case for assessment years 2011-12 to 2013-14. The Tribunal noted that the revenue's counsel could not controvert the identical facts. Therefore, the Tribunal upheld the deletion of the addition by the CIT(A) on this ground. Regarding the disallowance under Section 14A read with Rule 8D, the Tribunal found that the Assessing Officer had applied the formula without recording the necessary satisfaction as mandated by Section 14A(2) and Rule 8D(1)(a). The AO did not point out specific expenditures relatable to exempt income. Consequently, the Tribunal deleted the addition on this jurisdictional issue. The assessee's appeal was allowed, and the revenue's appeal was dismissed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the Assessing Officer's decision to recharacterize gains from the sale of shares and securities as business income to the tune of ₹125,66,52,965/-, contrary to the judgment in Raja Bahadur Vishweshwara Singh Vs. CIT (SC) 41 /TR 685? (Assessee's contention: The issue is covered by the Tribunal's decision in the assessee's own case for assessment years 2011-12 to 2013-14. Revenue's contention: The CIT(A) erred in rejecting the AO's decision, relying on the Supreme Court judgment. 2. Whether, on the facts and in the circumstances of the case, the Assessing Officer erred in disallowing expenditure under Section 14A read with Rule 8D without recording the necessary satisfaction as mandated by Section 14A(2) and Rule 8D(1)(a)? (Assessee's contention: The AO failed to record satisfaction and applied Rule 8D formulaically. Revenue's contention: Not explicitly recorded, but implied by the AO's action and the CIT(A)'s upholding of the disallowance.)

Which sections of the Income-tax Act were involved?

Section 43B,Section 14A,Section 143(3),Section 144C,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH-E : NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

For Appellant: Shri Ajay Vohra, Senior Advocate, Shri Rohit Jain, Advocate, Ms. Somya Jain, CA
For Respondent: Shri Lal Ram Sanga Sailo, CIT-DR
Hearing: 13.07.2026Pronounced: 30.09.2026

Heard together (2 matters)

ITA No.2133/Del/2026
ITA No.2619/Del/2026

Read from the judgment's own cause title. This page is filed under one of them.

Per Mahavir Singh, Vice President :

These cross-appeals are arising out of the order of learned Commissioner of Income Tax (Appeals), NFAC, Delhi in appeal No.NFAC/2009-10/10370119 dated 19" December, 2025. 2 ITA.No.2133 & 2619/Del/2026

2.

Initially, a draft assessment order dated

The order continues below.

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