2017 (3) TMI 266 - ITAT MUMBAI

Disallowance u/s 14A - as per assessee as in preceding years, accepted the suo-moto disallowance therefore, in the present Assessment Year also, the same has to be followed - Held that:- We find that the Tribunal for Assessment Year 2009-10, followed the decision of the Tribunal in the case of assessee itself for Assessment Year 2008-09 with respect to disallowance made by the Assessing Officer under rule-8D(2)(ii) and 8D(2)(iii) of the Rules along with the disallowance of the administrative expenses. In that case, the Ld. Commissioner of Income Tax (Appeal) restricted the disallowance to ₹ 10 lakh against the suomoto disallowance made to the tune of ₹ 1 lakh. The disallowance to the tune of ₹ 10 lakh was upheld by the Tribunal against the claim of ₹ 1 lakh by the assessee. So far as, the contention of the ld. counsel for the assessee that the disallowance may be restricted to ₹ 1 lakh only, is concerned, we are not satisfied with such reasoning because the rule of consistency applies to both sides and since, the Tribunal for Assessment Year 2008-09, 2009-10, being on identical facts, directed the Assessing Officer to restrict the disallowance as contained in the order of the Tribunal dated 27/03/2015 (for Assessment Year 2009-10), for the present Assessment Year also, the disallowance is directed to be restricted to ₹ 10 lakh under section 14A of the Act r.w.r. 8D(2)(iii), against the claim of the assessee at ₹ 1 lakh, consequently, the Ld. Assessing Officer is directed to follow the ratio laid down in order dated 27/03/2015 (Assessment Year 2009-10).

Disallowance of interest on the alleged basis that borrowed funds were utilized for non-business purposes - Held that:- As mentioned earlier, the Department in earlier and subsequent Assessment Year, accepted the stand of the assessee, therefore, no U-turn is permissible at this stage, when the facts are identical. Even otherwise, the issue of consistency has already been discussed by us in preceding paras of this order. Thus, the Ld. Assessing Officer is directed to follow the ratio laid down in theorder of the Tribunal in assessee's own case and hold that the funds were utilized for business purposes as the same were advanced by the assessee for the business exigencies of the assessee.