BARODA INDUSTRIES PRIVATE LIMITED,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, MUMBAI

ITA 1880/MUM/2024

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Baroda Industries Pvt. Ltd. appealed against the order of the Commissioner of Income-tax (Appeals), which pertained to the disallowance under Section 14A of the Income-tax Act, 1961, for the Assessment Year 2017-18. The primary contention was regarding the mechanical application of Rule 8D by the Assessing Officer without proper satisfaction on the disallowance offered by the appellant. The CIT(A) upheld the disallowance, leading to the appeal. However, the assessee decided to withdraw the appeal following the provisions of the Vivad-Se-Vishwas Scheme 2024, aimed at resolving tax disputes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473346 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MONICA PANDE
• Assessee Lawyers: VAIBHAV JHUNJHUNWALA
• Keywords: Earning of tax free income; Rule 8D
• Section: 250; 14A

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 1880/MUM/2024 (A.Y. 2017-18) Baroda Industries Pvt. Ltd. 226, 2nd Floor Bajaj Bhavan, Jamnalal Bajaj Marg, Nariman Point, Maharashtra-400021 v/s. बनाम ACIT, 607, 6th Floor, Aayakar Bhavan, Maharshi Karve Road, Maharashtra-400020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACB2428A Appellant/अपीलार्थी .. Respondent/प्रतिवादी Assessee by : Shri Vaibhav Jhunjhunwala Revenue by : Ms. Monica Pande Date of Hearing 14.02.2025 Date of Pronouncement 18.02.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 29.02.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2017-18. 2. The assessee has raised the following grounds of appeal: “I. ADDITION/DISALLOWANCE UNDER SECTION 14A OF THE ACT OF RS.64,18,706/-: P a g e | 2 ITA No. 1880/Mum/2024 A.Y. 2017-18 Baroda Industries Pvt. Ltd. 1.1 On the facts and in the circumstances of the case and in law, the learned Commissioner of Income tax (Appeals) [CIT (Appeals)] erred in not considering certain grounds of appeal raised by the Appellant relating to disallowance of Section 14A read with Rule 8D made by the learned Assessing Officer. 1.2 The learned CIT (Appeals) failed to appreciate that the learned Assessing Officer had resorted to Rule 8D in a mechanical manner without recording his \"satisfaction\" as to how the disallowance offered by the Appellant was not fair or reasonable. 1.3 On the facts and in the circumstances of the case and in law, the CIT(Appeals) erred holding that the appellant cannot challenge the non- recording of satisfaction before making disallowance as per Rule 8D on the ground that the appellant had itself made a suo-moto disallowance. 1.4 The learned CIT(Appeals) and the learned Assessing Officer failed to appreciate that the appellant had worked out and offered to tax a disallowance under Section 14A of the Act for a sum of Rs.15,50,000/- on \"reasonable basis\". The learned CIT(Appeals) and the learned Assessing Officer failed to appreciate that the appellant had disallowed various expenses on its own volition while working out the said disallowance on \"reasonable basis\". 1.5 On the facts and in circumstances of the case and in law, CIT(Appeals) failed to appreciate that disallowance under Section 14A can be made only in respect of such expenditure which has a direct and proximate nexus with earning of exempt income.” 3. At the outset, Ld. AR informed that with an intention to settle the dispute, the assessee has filed application under Vivad-Se-Vishwas Scheme 2024 (VSVS- 2024). It has filed form No. 1 and has also deposited the requisite amount of tax and therefore the appeal of the assessee is liable to be dismissed as withdrawn. 4. Accordingly, the same is dismissed as withdrawn. Order pronounced in the open court on 18.02.2025. Sd/- Sd/- NARENDER KUMAR CHOUDHRY RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिनाुंक /Date 18.02.2025 अननक ेत स ुंह राजपूत/ स्टेनो P a g e | 3 ITA No. 1880/Mum/2024 A.Y. 2017-18 Baroda Industries Pvt. Ltd. आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai. "