GEOJIT FINANCIAL SERVICES LTD( FORMERLY GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD),KOCHI vs. THE ACIT CIRCLE-1(2), KOCHI
What did the Tribunal hold?
The Tribunal restored the issue to the Assessing Officer for a fresh computation of disallowance. The AO was directed to consider only exempt income yielding investments and provide the assessee with three effective opportunities to prove relevant facts.
What were the facts?
The assessee challenged a disallowance made under Section 14A read with Rule 8D. The assessee argued that investments in foreign subsidiaries yielding taxable income should be excluded from the disallowance computation.
What were the issues?
Whether investments yielding taxable income should be excluded from the disallowance computation under Section 14A, and whether only dividend yielding investments should be considered for computing the disallowance.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Satbeer Singh Godara & Shri Amarjit Singh
Appellant by: Shri Gopi K., CA Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 12.08.2024 Date of Pronouncement: 25.09.2024 O R D E R Per Bench This assessee’s appeal for A.Y. 2018-19 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/NFAC/S/ 250/2022-23/1050799147(1) dated 15.03.2023, in proceedings u/s. 143(3) r.w.s. 144 of the Income Tax Act, 1961 (hereinafter "the Act").
Heard both parties. Case file perused.
We note at the outset that the assessee’s sole substantive grievance raised in the instant appeal seeks to reverses both the lower authorities action invoking section 14A r.w. rule 8D disallowance of Rs.1,12,38,582/- as upheld in CITA’s lower appellate order.
The assessee’s first and foremost argument before us is that a sum of Rs.1,09,19,891/- represents its investments made in foreign subsidiary companies yielding taxable income and, therefore, the same ought have been excluded by the lower authorities in the impugned computation. The assessee’s further case before us is that both the learned lower authorities should have included it’s dividend yielding investments only for the purpose of computation of impugned disallowance since the same is only “in relation” to exempt income u/s.14A(2) of the Act.
Faced with this situation, the CIT- DR is equally fair enough in submitting that the matter requires to be examine afresh by the Assessing Officer for computing the impugned disallowance keeping in mind only the exempt income yielding investments on both counts. We accordingly restore the assessee’s instant sole substantive grievance back to the Assessing Officer for his afresh appropriate computation as per law subject to a rider that the taxpayer shall prove the relevant facts in the consequential proceedings within three effective opportunities. Ordered accordingly.
In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 25th September, 2024.
More judgments on Section 14A
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- 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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