JAYPEE FORGE PRIVATE LIMITED,MUMBAI V. DCIT CIRCLE 14(1)(1), MUMBAI

ITA 4079/MUM/2025

AI Insights

The case involves Jaypee Forge Private Limited, which appealed against the order of the CIT(A) confirming the disallowance of Rs. 9,23,013 under Section 14A read with Rule 8D of the Income Tax Act, 1961, for the Assessment Year 2017-18. The AO had initially disallowed this amount, considering all investments of the assessee, whereas only those yielding exempt income should have been considered. The Tribunal, referencing the Special Bench decision in ACIT vs Vireet Investments Pvt. Ltd., restored the issue to the AO for a fresh examination, directing the assessee to provide details of investments that yielded exempt income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714774 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: ACIT v/s Vireet Investments Pvt. Ltd. (2017) 58 ITR (T.) 313
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA; DR
• Assessee Lawyers: ADITYA RAMCHANDRAN; AR
• Keywords: Opportunity of being heard; Earning of tax free income; Rule 8D
• Section: 10; 14A

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 4079/Mum/2025 Assessment Year: 2017-18 Jaypee Forge Private Limited 1106 G Square Jawahar Road NR BMC Office Ghatkopar (East) Mumbai - 400077 [PAN: AAACJ1662KJ] Vs DCIT, Circle – 14(1)(1), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Aditya Ramchandran, A/R Revenue by : Shri Vivek Perampurna, CIT D/R सुनवाई की तारीख/Date of Hearing : 04/08/2025 घोषणा की तारीख /Date of Pronouncement: 07/08/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. CIT(A)/Addl./ JCIT(A)-1, Visakhapatnam [hereinafter the ‘ld. CIT(A)’] dated 21/05/2025 pertaining to AY 2017-18. 2. The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the disallowance of Rs. 9,23,013/- u/s 14A r.w.r. 8D. Briefly stated the facts of the case are that the assessee filed its return of income electronically on 26/10/2017 declaring total income at Rs. 2,10,17,240/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. While scrutinizing the return of income, the AO noticed that the assessee Printed from counselvise.com I.T.A. No. 4079/Mum/2025 2 has claimed exemption u/s 10 of the Act totaling to Rs. 18,85,679/-. The AO found that the assessee has made a suo moto disallowance of Rs. 51,587/- and exempt long term capital gain of Rs. 18,34,092/-. The AO found that the assessee has made a suo moto disallowance of Rs. 51,587/- u/s 14A of the Act. Invoking the provisions u/s 14A r.w.r. 8D, the AO computed the disallowance at Rs. 9,74,600/- and refusing the suo moto disallowance, made addition of Rs. 9,23,013/-. The assessee carried the matter before the ld. CIT(A) but without any success. 3. Before us, the ld. Counsel for the assessee stated that while computing the disallowance, the AO has taken all the investments of the assessee whereas he should have considered only those investments which yielded exempt income. Per contra, the ld. D/R strongly supported the findings of the AO. 4. We have carefully considered the orders of the authorities below. It is an undisputed fact that while invoking Rule 8D for the computation of disallowance u/s 14A of the Act, the AO has considered all the investments made by the assessee. Before us, the assessee has furnished a chart of investments which yielded exempt income. We are of the considered view that the AO should consider only those investments which yield exempt income as held by the Special Bench in the case of ACIT v/s Vireet Investments Pvt. Ltd. (2017) 58 ITR (T.) 313. 5. We accordingly restore the issue to the file of the AO. The assessee is directed to furnish the details of investments which yield exempt income and the AO is directed to examine the same and decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee. Printed from counselvise.com I.T.A. No. 4079/Mum/2025 3 6. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 7th August, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 07/08/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0015ितिलिप अ\u001aेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u0015 थ / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai Printed from counselvise.com "