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| The Tax Publishers2021 TaxPub(DT) 0185 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
Where CIT(A) relying upon High Court decision in Delite Enterprises [ITA No.110 of 2009, dt. 26-2-2009], deleted the addition made by AO then again made an enhancement on a different pretext of estoppel or offering concession by the assessee and this was on cusp of contempt of High Court, and not at all sustainable, accordingly, addition made by AO was to be deleted.
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Disallowance under section 14A - Expenditure incurred on earning exempt income 14A - Interest and finance charges -
AO found that Assessee was holding investments income from which does not or shall not form part of total income. Assessee had debited interest and finance charges in the P&L account. In the course of assessment proceedings, assessee was asked to show cause why expenditure relatable to the exempt income should not be disallowed as per provisions of section 14A read with rule 8D(2). AO specifically asked the assessee whether it was maintaining separate books of account in respect of the exempt income. However, AO rejected the assessee's submissions and invoked the provisions of section 14A read with rule 80(2). Held: There was no estoppel as to law. If an addition or disallowance is not permissible in law the same cannot be fastened upon assessee on his concession. Moreover, CIT(A) relying upon High Court decision in M/S. Delite Enterprises [ITA No. 110 of 2009, dt. 26-2-2009] deleted the addition made by AO then again made an enhancement on a different pretext of estoppel or offering concession by assessee. This was on the cusp of contempt of High Court, and not at all sustainable. Accordingly, addition made by AO was to be deleted.
Followed:CIT v. Delite Enterprises [ITA No.110 of 2009, dt. 26-2-2009].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, MUMBAI BENCH
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