FOREVER FLOURISHING FINANCE & INV. PVT. LTD.,MUMBAI vs. DCIT - CC- 3(4), MUMBAI

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ITA 4933/MUM/2018Status: DisposedITAT Mumbai02 December 2019AY 2014-152 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the disallowance under Section 14A should be restricted to the amount of exempt income earned by the assessee. This decision was based on various precedents, including Supreme Court rulings.

What were the facts?

The Assessing Officer disallowed Rs. 4,97,948/- under Section 14A. The assessee argued that the disallowance should be limited to the exempt income earned, but the CIT(A) rejected this plea.

What were the issues?

Whether the disallowance under Section 14A should be restricted to the exempt income earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri Shamim Yahya (AM) & Shri Amarjit Singh (JM)

For Appellant: Shri R.C. Jain
For Respondent: Shri Chaitanya Anjaria
Hearing: 04.09.2019Pronounced: 02.12.2019

This appeal by the assessee is directed against the order of learned CIT(A) dated 6.7.2018 and pertains to A.Y. 2014-15.

2.

The issue pertains to disallowance u/s. 14A.

3.

The Assessing Officer has made disallowance u/s. 14A of the Act in this case at Rs. 4,97,948/-. The assessee’s request that the disallowance should be restricted to the exempt income earned has been rejected by learned CIT(A).

4.

Against this order the assessee is in appeal before us.

5.

We have heard both the counsel and perused the records. We find that the assessee’s plea that the disallowance should be restricted to the exempt income earned is duly covered in favour of the assessee by several decisions including that from decision of Apex Court in the case of PCIT Vs. State Bank of Patiala (259 Taxman 314) considered in the decision of Maxopp Investment Ltd. Vs Commissioner of Income-tax [2018] 91 taxmann.com 154 (SC). Accordingly, we direct that the disallowance be restricted to exempt income earned.

6.

In the result, assessee’s appeal is partly allowed. Order has been pronounced in the Court on 02.12.2019.

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