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ITAT restricts disallowance u/s 14A to 1% of exempt income considering identical ruling of earlier year

July 3, 2019[2019] 106 273 (Mumbai)/[2019] 177 ITD 327 (Mumbai)

INCOME TAX: Where Assessing Officer on an ad-hoc basis disallowed 5 per cent of exempt dividend income earned towards expenditure attributable to earning such income, since while deciding identical issue in assessee's own case for an earlier assessment year, Tribunal had restricted such disallowance to 1 percent of exempt income earned during year, following consistent view of Tribunal on disputed issue, disallowance under section 14A was to be restricted to 1 percent of exempt income earned during year

INCOME TAX: Where assessee's claim of deduction on account of amortization of upfront payment made towards leasehold land was rejected both by Assessing Officer and DRP only for reason that such deduction was not claimed either in original or in revised return of income, since it was a fact on record that in computation of income assessee had claimed such deduction, assessee's claim of deduction was to be examined on merit by DRP instead of rejecting it on technical ground and, thus, issue was to be remanded

INCOME TAX: Where assessee made provision for reversal of bad debts in its books of account at higher amount, however, assessee had wrongly offered lesser amount as income on account of such reversal and, accordingly, claimed that differential amount should be excluded from tax, Assessing Officer was unjustified in rejecting aforesaid claim of assessee merely because such claim was not made in return of income

INCOME TAX: Where assessee had advanced loan to its AEs without charging any interest and transfer pricing adjustment was made taking ALP of interest at LIBOR plus 200 basis points, in view of fact that assessee had contended that as per internal CUP available, interest rate could not exceed LIBOR plus 50 basis points, assessee's contention regarding availability of internal CUP required examination and, therefore, issue was to be remanded to Transfer Pricing Officer

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