Suzlon Energy Ltd. Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that no disallowance can be made u/s.14A of the Income Tax Act, when own funds available were far more than the investments made by the Assessee. Thus, disallowance u/s. 14A deleted.
Facts- These cross appeals are filed by the Assessee and the Revenue as against separate appellate orders both dated 28.02.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising out of the separate assessment orders passed under section 143(3) of the Income Tax Act, 1961 relating to the Assessment Years 2016-17 and 2017-18. Since common issues are involved in both the years namely disallowance u/s.14A rwr 8D and Depreciation on Goodwill, the same are disposed of by this common order for the sake of convenience. Asst. year 2016-17 is taken as the lead case.
Conclusion- Held that no disallowance can be made u/s.14A of the Act, when own funds available were far more than the investments made by the Assessee.
Held that there is no satisfaction on the part of AO, as contemplated u/s 14A(2), as to why the claim of the assessee is incorrect. It is well settled that where AO does not record satisfaction as per section 14(2) of the Act, AO cannot apply Rule 8D for computing disallowance u/s.14A of the Act. Under such circumstances, no further disallowance over and above suo-motu disallowance made by the assessee u/s 14A of the Act is called for.
