M/S. BUSINESSMATCH SERVICES (INDIA) PVT LTD, MUMBAI V. ACIT, CIRCLE-4(1)(1), MUMBAI

CO 61/MUM/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4627 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-12-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 18-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 12-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Additional evidence; Accommodation entries; Reason to believe; Rule 8D
• Section: 68; 143(3); 14A; 133(6); 48; 13

Judgement Text

I N T H E INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JM AND SHRI PRASHANT MAHARISHI, AM I T A N os. 1 1 3 6 & 2 4 5 5 / M u m / 2 0 2 3 ( A s s e s s m e n t Y e a rs: 2014-1 5 & 2 0 1 7-18) A C I T-4 ( 1 ) ( 1 ) R o o m N o . 6 4 0 , 6 th Fl o o r , A a yk a r B h a va n , M . K. R o a d , M u m b a i-4 0 0 0 2 0 V s . B u s i n e s s m a t c h Se r vi c e s ( I n d i a ) P r i va t e Li m i t e d Sh o p N o . 2 , N e p t u n e 1 1 , Sm t . N a r gi s D u t t R o a d , B a n d r a W e s t , M u m b a i-4 0 0 0 5 0 (Appellant) (Respondent) PAN No. AAACB6129N C O N o . 6 1 / M u m / 2 0 2 3 ( A r i s i n g i n I T A N o . 1 1 3 6 / M u m / 2 0 2 3 f o r A . Y . 2 0 1 4-1 5 ) B u s i n e s s m a t c h Se r v i c e s ( I n d i a ) P r i va t e Li m i t e d Sh o p N o . 2 , N e p t u n e 1 1 , Sm t . N a r gi s D u t t R o a d , B a n d r a W e s t , M u m b a i-4 0 0 0 5 0 V s . A C I T-4 ( 1 ) ( 1 ) R o o m N o . 6 4 0 , 6 th Fl o o r , A a yk a r B h a va n , M . K. R o a d , M u m b a i-4 0 0 0 2 0 (Cross Objector/ Appellant) (Respondent) Assessee by : Sh r i M a d h u r A ga r w a l & Sh r i R a v i k a n t Pa t h a k , A R s Revenue by : Sh r i S Sr i n i va s u , C I T D R D a t e o f h e a r i n g: 19.10. 2 0 2 3 Date of pronouncement : 1 8 . 1 2. 2 0 23 O R D E R PER PRASHANT MAHARISHI, AM: ITA NO.1136/MUM/2023 AY 2014-15 Page | 2 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 01. This appeal is filed by the Asst. Commissioner of Income Tax, 4(1)(1), Mumbai (the learned Assessing Officer) for A.Y. 2014-15, against the appellate order passed by National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 19 th February, 2023, wherein the appeal filed by the assessee against the assessment under Section 143(3) of the Income-tax Act, 1961 (the Act) dated 28 th December, 2016, passed by the Dy. Commissioner of Income Tax, Circle 12(1)(2), Mumbai (the learned Assessing Officer) for the impugned assessment year, was partly allowed. 02. The learned Assessing Officer has raised following three grounds of appeal as under:- “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 9,00,00,000/- on account of unexplained cash credit u/s.68 of Income Tax Act, 1961, merely on the basis of details/documents submitted by the assessee without appreciating the fact that the mere submission of PAN, account number and books of accounts could not establish the creditworthiness of the parties. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the disallowance on account of interest on account of interest payment against such unsecured loans inspite of the fact that the creditworthiness of the lenders could not be established by the assessee. 3. Whether, on the facts and circumstances of the case and in law, the CIT(A) erred in restricting the disallowance u/s. 14A r.w.r. 8D to the extent of Rs. 9,60,000/- i.e. suo motto disallowance made by the assessee as against the disallowance of Rs. 3,93,53,012/- computed by the AO being expenses incurred in relation to the exempt income. 4. Whether, on the facts and circumstances of the case and in law, the CIT(A) erred in not considering the clarification regarding disallowance of expenses under section 14A of the Income Tax Act, issued by the CBDT vide its circular no. Page | 3 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 05/2014 dated 11/02/2014. 5. The appellant craves leave to amend or alter any ground or add new ground which may be necessary.” 03. Brief facts of the case shows that assessee is the company engaged in the business of providing consultancy services for Private Placement of shares with foreign institutional investors and other investors and also arranged loans as well as insurance advisory. It filed its return of income on 30 th November, 2014, at a loss of ₹22,63,44,738/- as per normal computation and book loss was declared at ₹5,44,63,443/-. This return of income was picked up for scrutiny. 04. During the year, the learned Assessing Officer on perusal of the return of income found that assessee has obtained loan from nine parties aggregating to ₹9 crores. Therefore, the assessee was asked to show the identity, creditworthiness and genuineness of the transactions. Assessee submitted on 9 th December 2016 and 19 th December 2016, giving the confirmation of the lender, bank statement of the lender, copy of return of income along with the balance sheet and profit and loss account of the lender of all the parties. The assessee also submitted its own bank account showing the amount of loan received. On 24 th November 2016, assessee submitted a letter stating the name, address, Permanent Account Number (PAN), opening balance and subsequent repayment of the parties. The assessee also denied of having any connection with the accommodation entry providers. The assessee submitted that if there is any evidence available then assessee must be granted the details of such evidence as well as the opportunity to cross-examine such evidences. The assessee stated that by producing the above evidence the identity and creditworthiness of the lenders as well as genuineness of the transactions is established. Thus, the assessee submits that assessee has discharged its onus cast upon him with respect to Section 68 of the Act. The assessee also categorically stated that now onus is upon the learned Assessing Officer to show that the evidences submitted by the assessee are not reliable. 05. The learned Assessing Officer examined the financial statements of the lenders and noted that the details submitted by the assessee are incomplete and none of the lenders is moneylenders or non-banking financial institutions. Further, Page | 4 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 almost all the parties have shown loss in their trading activities. Further, the bank statement of the lender is also of one page. The learned Assessing Officer also noted that the accommodation entry provider used to accept the cash from beneficiaries and in returned the same as bogus loans. As the accommodation entry provider has maintained the parallel books of accounts and these entities are controlled by him, the addition under Section 68 of the Act was made of ₹9 crores. 06. Further, the interest paid to those parties of ₹56,29,040/-, was also disallowed. Further, interest of ₹1,43,262/- on account of interest to 13 other parties were also disallowed for the reason that for A.Y. 2013-14, the loans of these parties were added under Section 68 of the Act. 07. The learned Assessing Officer further found that assessee has earned dividend income of ₹4,60,006/- and disallowance under Section 14A of the Act of ₹9,60,000/- was made, suo moto. The learned Assessing Officer show caused the assessee for application of disallowance by invoking Rule 8D of the Rules and thereafter he proceeded to compute the disallowance of ₹4,03,13,012/-. As the assessee has already disallowed of ₹9,60,000/-, further, disallowance of ₹3,93,53,012/- was made. 08. Accordingly, assessment order under Section 143(3) of the Act was passed on 28 th December, 2016, computing the total income of ₹9,19,32,985/-. 09. The assessee aggrieved with the order preferred the appeal before the National Faceless Appeal Centre, Delhi [the learned CIT (A)]. The learned CIT (A) with respect to the addition of ₹9,00,00,000/- under Section 68 of the Act noted that assessee has provided the details of loan with name, address, PAN, confirmation of loan, bank statements, income tax return and the financials of the lenders. The assessee has also submitted its bank statement and therefore, the assessee has discharged the onus cast upon him under Section 68 of the Act by proving the identity and creditworthiness of the lender and genuineness of the transactions. The learned Assessing Officer ignored these documentary evidences and made the addition under Section 68 of the Act holding that these Page | 5 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 are the accommodation entries. The learned CIT (A) also noted that on identical facts and circumstance addition was made under Section 68 of the Act for A.Y. 2012-13, from companies, which are controlled by accommodation entry provider, passed the order on 11.07.2019 in ITA No. 6330/Mum/2017 deleting the addition. Therefore, he followed the decision of co-ordinate Bench in assessee‟s own case deleting the addition. He further held that addition cannot be made solely on the basis of statement of third party and further, the learned Assessing Officer has not made any enquiry with respect to the details furnished by the assessee and therefore, the learned Assessing Officer has failed to throwback its onus on the assessee. Accordingly, the addition of ₹9 crores was deleted. 010. Consequently, the disallowance of interest to those parties and as well as to those parties which were taken loans from them added under Section 68 of the Act for A.Y. 2012-13, was deleted by the co-ordinate bench, was also deleted. 011. The learned CIT (A) with respect to the disallowance under Section 14A of the Act has categorically held that assessee has dividend income of ₹4,66,066/- and it has exempt income earned of ₹4,66,066/- and suo moto disallowance of ₹9,60,000/- under Section 14A of the Act. Further, the disallowance cannot be made holding that the disallowance already offered by the assessee is more than exempt income. 012. Therefore, the learned Assessing Officer is aggrieved with the appellate order has preferred this appeal challenging the addition under Section 68 of the Act and disallowance of interest as well as deletion of disallowance u/s 14A of the Act. 013. The learned Departmental Representative on deletion of addition under Section 68 of the Act of ₹9 crores contended that all the 9 parties from whom the assessee has taken a loan which operated by the accommodation entry provider which is confirmed in their statements that these loans are operated by them for providing accommodation entries. Accordingly, it was submitted that the order passed by the learned Assessing Officer is correct. He submitted that the learned Page | 6 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 CIT (A) has followed the order of the co-ordinate Bench in assessee‟s own case for A.Y. 2012-13 that has been challenged by the learned Assessing Officer by filing of appeal under Section 260 A of the Act on 20 February 2020. Therefore, the reliance on that order is unfounded. He further submitted that when the assessee has furnished the evidence based on which the addition was deleted is stated to be accommodation entry provider. There is no reason to believe these documents. 014. On the issue of interest disallowance deleted by the learned CIT (A), he submitted that interest paid to those parties whose loans are not genuine, interest disallowance is correctly made by the learned Assessing Officer. On the disallowance under Section 14A of the Act restricted to the exempt income by the learned CIT (A), He submitted that provisions of the law does not support such contention and there is no proposition in the Act that disallowance should be restricted to the exempt income only. 015. The learned Authorized Representative vehemently submitted that the identical appeal is filed by the learned Assessing Officer for A.Y. 2012-13 in ITA No.6330/Mum/2017, dated 11.07.2019, wherein the addition of approximately Rs. 16 crores was made by the learned Assessing Officer, deleted by the learned CIT (A) and such deletion was confirmed by the co-ordinate Bench. He submitted in that year the learned Assessing Officer carried out the enquiry by issuing notices under Section 133(6) of the Act and only partial parties responded, even then the addition was deleted. He submitted that for this year all the details submitted by the assessee, no enquiry was made by the learned Assessing Officer and therefore, the case for this year stand on better footings. He further referred to paper book containing 136 pages to show that in page no. 42 to 47, the assessee has also given details of loan taken and repaid. He further referred to page no. 48 to 57, wherein the confirmation with respect to each of the lenders along with their bank statements, the return of income and balance sheet is furnished. The assessee also asked by letter dated 24 th November, 2016, the learned Assessing Officer whether there is any material are found remotely suggested that the loan taken by the assessee are not genuine. The assessee specifically raised the request that it is for now the learned Assessing Officer to Page | 7 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 throwback the onus to the assessee, which the learned Assessing Officer failed to do so. He further stated that in absence of any enquiry made by the learned Assessing Officer on the details submitted, where the assessee has discharged its onus cast under Section 68 of the Act, the learned CIT [A] has correctly deleted the addition. 016. On interest disallowances deleted by the LD CIT [A] it was submitted that when the addition u/s 68 is deleted with respect to those parties, there is no reason that disallowance of interest can at all be made. He referred to the ITAT decision in case of assessee for Ay 2012-13 where in the addition u/s 68 is deleted with respect to those parties; interest paid to them is disallowed by the ld AO. 017. On disallowance u/s 14A rwr 8 D, He further submitted that disallowance offered by the assessee has been retained by the learned CIT (A), which is higher than the exempt income therefore; further addition made by the learned Assessing Officer has been correctly deleted. 018. We have carefully considered the rival contentions and perused the orders of the lower authorities. The brief facts of the case shows that the assessee company during the year had taken loan from nine parties amounting to ₹9 crores. These 9 parties are stated by the learned Assessing Officer being companies connected with an accommodation entry provider. Therefore, the learned Assessing Officer show causes the assessee as to why these loans are not treated as genuine loans. The assessee submitted the reply with respect to these 9 loans, submitting the ledger confirmation, their bank statements, their return of income and their balance sheet. On submission of these details, the assessee also stated before the learned Assessing Officer vide letter dated 19 th December, 2016, stating that assessee has provided the explanation with respect to the lenders showing their identity and creditworthiness as well as the genuineness of the transaction. The assessee also categorically stated that there is no material provided to the assessee, which suggests that the loans taken by the assessee are not genuine. 019. The assessee further stated that the learned Assessing Officer has relied upon the statement of accommodation entry provider, however, neither the cross Page | 8 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 examination of the same despite request, was provided and further no material was also given by the learned Assessing Officer to show that the impugned loans are not genuine. Ld AO did not give any evidence to the assessee to show that loans are not genuine. 020. When the assessee has discharged its initial onus , it is duty of the learned Assessing Officer to carry out necessary enquiries either [1] by issuing notice under Section 133(6) of the Act to the lenders, [2] by issuing summons to the parties, [3] by asking the assessee to produce parties or [4] by deputing the inspectors for verification, or [5] or carry out survey etc. at the premises of the lenders. 021. The learned Assessing Officer has not conducted any enquiry with respect to all or any of the lenders. This is also when the assessee has made a written request to the ld AO to examine his evidences submitted and make inquiry. Despite this, LD AO did not conduct any inquiry. 022. It merely stated that income shown by the parties from trading activities is a loss to offset interest income, etc. That may be the reasons for suspicion, the learned Assessing Officer should have conducted further enquiry to support his suspicion, and otherwise the suspicion merely remains suspicion. If it is without any evidence, it has no value. So We agree with the argument of the learned Authorized Representative that mere suspension without further enquiry does not take place of „proof or evidence‟ that the loans are not genuine. 023. However, we agree with the arguments of the learned Departmental Representative that mere repayment of the loans subsequently does not make the original acceptance of loan as genuine. Such an argument is against the language of the provision of section 68 of the act. Criteria of „identity, creditworthiness and genuineness‟ are to be tested at the time of amount credited in the books of the assessee. All subsequent events are immaterial. 024. Further, the order of the co-ordinate Bench in assessee‟s own case for A.Y. 2012-13 on identical facts supports the case of the assessee, where deletion of addition of unsecured loans under Section 68 of the Act was confirmed by the Page | 9 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 ITAT. Though the learned Assessing Officer has preferred appeal before the Hon'ble High Court against that order of ITAT, however, until the order of the co-ordinate Bench is reversed/ upset by the Hon'ble High Court, it judicially binds us. 025. In view of this, we do not find any merit in the ground no.1 of the appeal of the learned Assessing Officer and confirmed the order of the CIT (A) in deleting the addition under Section 68 of the Act of ₹9 crores. Thus, ground no.1 is dismissed. 026. Coming to ground no.2, with respect to interest disallowance with respect to lenders whose loans are added under Section 68 of the Act in earlier years as well as in this year, we find that addition under Section 68 of the Act is deleted of those parties; consequent disallowance of interest also cannot survive. Accordingly, we confirm the order of the learned CIT (A) in deleting the disallowance on account of interest. Ground no.2 of the appeal is also dismissed. 027. With respect to ground no.3 of disallowance under Section 14A of the Act, we find that assessee has suo moto disallowed ₹9,60,000/-, whereas exempt income earned by the assessee is merely ₹4,60,006/-, the learned CIT (A) has correctly deleted the disallowance following the decision of Hon'ble jurisdictional high court in 421 ITR 142. Thus, the learned CIT (A)‟s order deleting the disallowance under Section 14A of the Act is upheld and ground no. 3 and 4 of the appeal is dismissed. 028. Accordingly, ITA No.1136/M/2023 of the learned Assessing Officer is dismissed. 029. In co No 61/M/2023 for assessment year 2014 – 15, assessee has challenged the order of the ld CIT [A] for the reason that, while adjudicating on disallowance of expenses under section 14 A of the act the learned CIT – A has upheld the sumo to disallowance made by the assessee. In this case, the exempt income earned by the assessee is ₹ 460,006/– and the sumo to disallowance offered by the assessee is ₹ 960,000. As the disallowance under section 14 A of the act cannot exceed the exempt income and further wherein the appeal is a Page | 10 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 continuation of the assessment proceedings, the sumo to disallowance offered by the assessee of ₹ 960,000, is required to be restricted to the exempt income of ₹ 4,060,006. In view of this, the cross objection filed by the assessee is allowed. 030. ITA number 2455/M/2023 is filed by the assessing officer for assessment year 2017 – 18 against the appellate order passed by the Commissioner of income tax (Appeals) on 13/05/2023 , wherein the appeal filed by the assessee against the assessment order passed under section 143 (3) of the income tax act dated 27/12/2019 passed by the deputy Commissioner of income tax – 12 (1) (2), Mumbai was partly allowed. 031. Grievance of the learned assessing officer in this appeal are [1] deletion of the addition under section 68 of the income tax act of Rs 150 lakhs by admitting the additional evidences though assessee did not submit those documentary evidences before the assessing officer despite ample opportunity given by the learned AO during assessment proceedings, [2] deletion of the disallowance of interest of ₹ 7,643,849/– and [3] deletion of disallowance of ₹ 3,913,899/– under section 14 A of the act. 032. Fact shows that assessee filed its return of income on 6/11/2017 at loss of ₹ 367,59,450/– the return was picked up for scrutiny and culminated into the assessment order passed under section 143 (3) of the act on 27/12/2019. 033. The learned assessing officer in the assessment proceedings disallowed the interest expenditure of ₹ 7,643,849/– holding that this amount of interest has been paid by the assessee to the 9 parties which were added by the learned assessing officer under section 68 of the income tax act in earlier years. The learned AO was of the view that these loans are not genuine and therefore the interest paid on those loans are also non-genuine expenditure. When the issue travelled before the learned CIT – A, he deleted the disallowance is the loan of ₹ 9 crores added by the learned assessing officer under section 68 of the act for assessment year 2014 – 15 was deleted by him, the consequent interest disallowance is also required to be deleted. Page | 11 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 034. On hearing the parties we find that when the addition under section 68 with respect to the loans on which interest has been paid during the year, the disallowance of such interest cannot be made when the addition under section 68 of the income tax act made by the learned assessing officer with respect to those parties for assessment year 2014 – 15 has already been deleted following the order of the coordinate bench for assessment year 2012 – 13 by this order. Accordingly, ground number 3 of the appeal of the learned assessing officer is dismissed. 035. The learned assessing officer during the course of assessment proceedings noted that the assessee has obtained a loan of Rs 150 lakhs from M/s Money Diam and has paid interest of ₹ 1,350,008 the rate of 9% of the said party. The learned assessing officer questioned the assessee, the assessee did not file any reply, and therefore the addition of Rs 150 lakhs was made under section 68 of the income tax act. When the matter reached before the learned CIT – A the assessee made an application for admission of additional evidence in the form of confirmation of the party from assessment year 2014 – 15 and 2017 – 18 and Ledger account. The reason for non-submission of those evidences before the learned assessing officer, assessee submitted that assessee was not in possession and those documents were not available with it at the relevant time and therefore those additional evidences may be admitted. The learned CIT – A forwarded that additional evidence to the learned assessing officer for submission of the remand report on admission of the additional evidence as well as on the merit of additional evidence. The learned assessing officer filed the remand report on 10/05/2023. The learned assessing officer in the remand report was confronted by the assessee with the Ledger account of the lender in the books of the assessee for financial year 2013 – 14 and 2016 – 17 along with the relevant extracts of the bank statement showing the loan received from that party. It was the claim of the assessee that as per the Ledger account the assessee has taken loan in the financial year 2013 – 14 relevant to assessment year 2014 – 15 and therefore the addition cannot be made on the same loan in assessment year 2017 – 18. To support the contention of the assessee, the bank statement of the assessee was also produced. The learned assessing officer in the remand report Page | 12 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 stated that the additional evidences should not be admitted because the assessee was given ample opportunities during the course of assessment proceedings and further on verification of the additional evidence submitted the CIT – A was requested to decide the appeal on merits. The learned CIT – A as per paragraph number 6.3 officer order considered the various circumstances for admission of the additional evidences in terms of rule 40 6A of the income tax rules. He held that there is a reasonable cause to which the assessee could not find these evidence before the learned assessing officer as mentioned in paragraph number 5.2 of the order. Therefore such additional evidences were admitted following the decision of the honourable Bombay High Court in case of 231 ITR 01, honourable Kerala High Court in 265 ITR 217, and honourable Allahabad High Court in 104 ITR 120. Further, the addition was also deleted, as the amount of loan was not received during the year but in assessment year 2014 – 15. 036. On hearing the parties we find that the learned CIT – A is within his powers to admit the additional evidences for which the learned CIT – A has recorded the reasons which are not assailed by the revenue before us. Therefore, we do not have any reason to state that the admission of additional evidence by the learned CIT – A is not valid. Even otherwise on the merits of the case when the loan is not received during the financial year 2016 – 17 (assessment year 2017 – 18), but in assessment year 2014 – 15, the addition could not have been made in this year. Accordingly we dismiss ground number 1 and 2 of the appeal of the assessee and direct the learned assessing officer to delete the addition of Rs 150 lakhs under section 68 of the income tax act as well as the consequent interest expenditure thereon amounting to ₹ 1,350,000/–. 037. Coming to the ground number 4 of the appeal of the learned assessing officer against the deletion of the disallowance of ₹ 3,913,899/– under section 14 A of the act read with rule 8D of the income tax act, we find that the fact shows that the learned assessing officer noted that assessee has reported equity shares of ₹ 45.82 crores but has offered disallowance under section 14 A of the income tax act of only ₹ 1 lakh. When questioned, it was submitted that assessee has earned any exempt income of ₹ 269,721/– and has offered SUO Moto disallowance of ₹ 1 lakh. Assessee also submitted that the expenses claimed as deduction by the Page | 13 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 assessee is only ₹ 146,931,165 out of which a sum of ₹ 143,012,889 is provision for determination in value of investment, which has already been disallowed. Further, in the computation of income tax the assessee has made a total disallowance of ₹ 144,487,205 out of total expenditure in the profit and loss account of ₹ 14.16 crores. The balance expenses are only ₹ 24.43 lakhs, which are normal business expenditure. The learned assessing officer rejected the contention of the assessee and computed the disallowance under section 14 A read with rule 8D of the act and computed the disallowance of ₹ 3,913,899.When the matter reached before the learned CIT – A he restricted the disallowance to the extent of exempt income of ₹ 269,721. The learned assessing officer is aggrieved with the same. 038. On hearing the parties we find that the disallowance is restricted to the exempt income earned by the learned CIT – A, there is no infirmity in appellate order passed by him ground number 4 of the appeal of the assessing officer is dismissed. 039. Accordingly, ITA number 2455/M/2023 for assessment year 2017 – 18 filed by the assessing officer is dismissed. Order pronounced in the open court on 18.12.2023. Sd /- Sd /- (ABY T VARKEY) ( PR A S H A N T M A H A R I SH I ) ( J U D I C I A L M E M B E R ) ( A C C O U N T A N T M E M B E R ) Mumbai, Dated: 18.12. 2023 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. Page | 14 ITA Nos.1136 & 2455/Mum/2023 CO No.61/Mum/2023 M/s Businessmatch Services (India) Pvt. Ltd.; A.Y. 14-15 & 17-18 BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai