ITAT Replaces Rule 8D with Reasonable Estimate, Cuts ₹3.05 Cr Disallowance to ₹10 Lakh

Nitin Dwarkadas Nyati Vs ACIT (ITAT Pune) Assessee, a builder & civil contractor, filed return declaring income of ₹36.73 crore. AO completed assessment u/s 143(3) r.w.s. 144B determining income at ₹40.41 crore after two additions — (i) ₹3.05 crore u/s 14A r.w.r. 8D for expenditure relatable to exempt income, & (ii) ₹50.79 lakh towards education cess, treating the same as not allowable in view of retrospective amendment by Finance Act 2022. CIT(A) partly allowed the appeal — restricted the 14A disallowance by directing AO to recompute @1% on those investments from which exe...