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2022 (4) TMI 868 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Mandation of recording satisfaction - voluntary disallowance made u/s 14A - CIT(A) directed the AO to exclude the investments made by the assessee in subsidiary companies after proper verification from the calculations in the Rule 8D(2) r.w. section 14A in computing the regular income - HELD THAT:- AO has not recorded any satisfaction as to how the disallowance voluntarily made by the assessee is not correct and moreover, AO has not given any findings in the assessment order with regard to the correctness in respect of expenditure incurred to earn exempt income. DR could not controvert the decision of the Hon’ble Supreme Court in the case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] which was followed by the Coordinate Benches of the Tribunal in assessee’s own case for the assessment year 2013-14 [2017 (5) TMI 1702 - ITAT CHENNAI] to decide the issue in favour of the assessee. Thus, respectfully following the decision of the Coordinate Benches of the Tribunal in assessee’s own case for the assessment year 2013-14 as well as the decision of the Hon’ble Supreme Court in the case of Maxopp Investment Ltd. v. CIT (supra), we hold that the Assessing Officer was not justified in making disallowance under section 14A of the Act. Thus, the ground raised by the assessee is allowed. Exclusion of the disallowance under section 14A for disallowance u/s 115JB - HELD THAT:- As in the case of Sobha Developers Ltd. v. DCIT [2021 (1) TMI 378 - KARNATAKA HIGH COURT] wherein, it was held that the disallowance made under section 14A of the Act could not be added to book profits of the assessee under section 115JB. Royalty payment as revenue expenditure - HELD THAT:- Against the disallowance of royalty payment by following the decisions of the Tribunal in assessee’s own case for the assessment years 2012-13 and 2013-14, the ld. CIT(A) directed the Assessing Officer to allow the royalty payment by treating it as revenue expenditure. Thus, we find no infirmity in the order passed by the ld. CIT(A). Just because the Revenue has filed an appeal against the order of the Tribunal before the Hon’ble Madras High Court, we cannot take a different view until and unless the decision of the Tribunal has been reverted or modified. Accordingly, the ground raised by the Revenue stands dismissed.
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