INCOME TAX ACT, 1961

Section 14A read with Rule 8D

Disallowance under section 14A - Expenditure against exempt income - AO made additional disallowance over and above suo motu disallowance made by assessee -

Assessee-company made suo moto disallowance under section 14A read with rule 8D. AO observed that the assessee did not offer proper disallowance. Accordingly, he made his own calculation and made additional disallowance over and above the suo moto disallowance made by the assessee. It was submitted on behalf of the assessee that the difference in the assessee's calculation and that of the AO arose primarily because of the fact that the assessee did not consider the amount of share application money pending allotment as investment yielding exempt income, whereas the AO treated it otherwise. Held: It was found that the difference in assessee's calculation in respect of disallowance under section 14A read with rule 8D and that of AO was on account of the fact that the assessee did not consider share application money at the year-end as investment yielding exempt income, which the AO took it otherwise. Further, in assessee's own case for earlier assessment year on similar issue, Tribunal decided the issue in the assessee's favour. Therefore, the additional disallowance made by the AO under section 14A read with rule 8D over and above suo moto disallowance made by the assessee was deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 36(1)(iii)

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