Case Law Details
Kumar Urban Development Ltd Vs ITO (ITAT Pune)
The issue under consideration is whether the addition made by AO u/s 14A read with rule 8D is justified in law?
In the present case, the assessee made suo moto disallowance u/s.14A in terms of Rule 8D. The Assessing Officer (AO) observed that the assessee did not offer proper disallowance. He made his own calculation of assessment the order and worked out the amount disallowable. The differential amount was disallowed. The assessee submitted before the ld. CIT(A) that the difference in assessee’s calculation and that of 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.
ITAT states that, the AO computed the amount otherwise disallowable u/s.14A read with Rule 8D. On the other hand, the assessee suo moto offered disallowance. The difference emanated 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. It is found that similar issue came up for consideration before the Tribunal in case of the assessee for the assessment year 2009-10. A copy of such order has been placed on record. The Tribunal has decided this issue in assessee’s favour. Similar view has been reiterated by the Tribunal in its order for the assessment year 2010-11, whose copy has also been placed in the paper book. The ld. DR could not point out if the view of the Tribunal in such earlier years has been reversed or modified by the Hon’ble High Court in any manner. Respectfully following the precedent, ITAT set-aside the impugned order on this score and order to delete the disallowance.
FULL TEXT OF THE ITAT JUDGEMENT
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