M/S MUTHOOT MOTORS,COCHIN vs. DCIT CORPORATE CIRCLE 1(1), KOCHI
What did the Tribunal hold?
The Tribunal restored the assessee's grounds to the Assessing Officer for fresh factual verification and adjudication. The taxpayer was directed to prove all relevant facts in the consequential proceedings.
What were the facts?
The assessee appealed against disallowances made by the lower authorities concerning proportionate interest expenditure under Section 14A read with Rule 8D, and disallowances related to PF & ESI. The assessee argued that non-interest bearing funds were available for investments and that PF & ESI were paid within the statutory due dates.
What were the issues?
Whether proportionate interest expenditure disallowance under Section 14A and disallowances related to PF & ESI were justified, considering the availability of non-interest bearing funds and timely payments.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
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- Checkmate Services Pvt. Ltd. v. CIT1,392 citing448 ITR 518 · 2022 · SC · Read judgment
Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH
PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal, for assessment year 2014- 2015, arise against the CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/ 250/2022-23/1050229200(1), dated 28.02.2023, in proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
2 ITA.No.296/COCH./2023 2. The assessee through it’s substantive grounds raised in the instant appeal seek to reverse both the learned lower authorities action inter alia making sec.14A read with Rule 8D disallowance of proportionate interest expenditure amounting to Rs.39,079/-; PF & ESI to the tune of Rs.9,19,407/- and Rs.3,61,111/- and interest expenditure disallowance and Rs.15,54,947/-; respectively.
Both the parties reiterated their respective stands against and in support of the foregoing three heads. Learned counsel inter alia submits that so far as sec.14A read with Rule 8D proportionate interest expenditure and 36(1)(iii) disallowance of business interest expenditure(s) are concerned; the assessee was having huge non-interest bearing funds and therefore, the only presumption which arises in such an instance is that of utilization of such non-interest bearing funds only for making investments in both exempt income yielding investments as well as to non-business purposes; as the case may be. He further submits regarding foregoing issue of sec.36(1)(viia) PF & ESI although hon’ble apex court’s landmark decision in Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC), has settled the issue in department’s favour in principle, the 3 ITA.No.296/COCH./2023 learned lower authorities have not taken into consideration the clinching fact that the same had been credited/paid within the due date only as per the corresponding statute(s). Faced with this situation, we deem it appropriate in the larger interest of justice to restore the assessee’s instant substantive grounds back to the learned Assessing Officer for his afresh factual verification and adjudication, preferably within three effective opportunities of hearing, subject to the rider that it shall be the taxpayer’s onus and responsibility only to file and prove all the relevant facts in consequential proceedings. Ordered accordingly..
This assessee’s appeal is allowed for statistical purposes in above terms.
Order pronounced in the open Court on 25.09.2024.
More judgments on Section 14A
- Blacksoil Capital Private Limited (As… vs DCIT, Circle-1(1), HyderabadITA 2217/HYD/2026[2017-18]Status: Disposed9 Oct 2026AY 2017-18
- Hiral Construction, Mumbai vs ITO Ward 42(1)(2), MumbaiITA 8431/MUM/2025[2017-18]Status: Disposed8 Oct 2026AY 2017-18
- The Dy DIT (It) 1(2), Mumbai vs M/S Citi Bank N.A, MumbaiITA 4981/MUM/2007[2002-2003]Status: Disposed8 Oct 2026AY 2002-2003
- M/S. Citi Bank N.A., Mumbai vs The Addl DIT (It) RG-1, MumbaiITA 4970/MUM/2007[2002-2003]Status: Disposed8 Oct 2026AY 2002-2003
- M/S American Express Bank Ltd., Mumbai vs The Jt DIT (It)1(1), MumbaiITA 9414/MUM/2004[2000-2001]Status: Disposed8 Oct 2026AY 2000-2001
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