ITAT Mumbai Judgments — December 2023

The Tribunal set aside the CIT(A)'s ex-parte order and restored the appeal to the CIT(A)'s file for fresh adjudication. The assessee was granted one more opportunity to present its case, in the interest of natural justice.

The Tribunal held that the disallowance under Section 14A read with Rule 8D(2)(ii) should be deleted as the assessee had sufficient interest-free funds for its investments. Regarding Section 10A, the Tribunal upheld the CIT(A)'s decision allowing the exemption, finding that the STPI unit met the criteria for a new venture.

The Tribunal held that the disallowance under Section 14A read with Rule 8D(2)(ii) should be deleted as the assessee had sufficient interest-free funds for its investments. Regarding Section 10A, the Tribunal upheld the CIT(A)'s decision allowing the exemption, finding that the STPI unit met the criteria for a new venture.

The Tribunal allowed the ESOP expenses claim, partly allowed the Section 14A disallowance by restricting it to 2% of exempt income, and remanded several issues including Section 10A deduction, TDS credit, and interest calculations back to the AO for verification and re-computation. The adjustment for employee secondment was also directed to be reworked based on Indian salary costs.