ITAT Mumbai Deletes ₹4.6 Crore Disallowance Against Aishwarya Rai Bachchan Under Section 14A, Terms AO’s Computation ‘Illogical And Unreasonable’
Pranav B Prem
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, comprising Pawan Singh (Judicial Member) and Renu Jauhri (Accountant Member), has granted major relief to Aishwarya Rai Bachchan by deleting a ₹4.6 crore disallowance made under Section 14A of the Income Tax Act, 1961, holding that the computation by the Assessing Officer (AO) was “devoid of logic and clearly unreasonable.” The case pertained to Assessment Year 2022–23, during which the assessee declared a total income of ₹39.33 crore and had voluntarily disallowed ₹49.08 lakh under Section 14A towards expenditure related to earning exempt income of ₹2.14 crore.
The Assessing Officer rejected this computation and made a further disallowance of ₹4.60 crore under Rule 8D, bringing the total assessed income to ₹43.44 crore. The CIT(A) (National Faceless Appeal Centre, Delhi) later deleted the addition, prompting the Revenue to appeal before the Tribunal.
Tribunal’s Findings
The Tribunal observed that the Assessing Officer failed to record satisfaction as required under Section 14A before rejecting the assessee’s voluntary disallowance. It further noted that the AO “mechanically rejected” the assessee’s computation without examining the accounts or segregating investments that actually yielded exempt income.The Bench emphasized that the total expenditure debited to the profit and loss account was only ₹2.48 crore, whereas the disallowance of ₹4.6 crore made by the AO was “illogical and baseless.” The Tribunal relied on precedents, including Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC) and Vireet Investment Pvt. Ltd. v. ACIT (165 ITD 27, Delhi Special Bench), to underline that only expenditure incurred in relation to exempt income can be disallowed. Holding that the AO’s computation was made “without proper appreciation of facts or legal principles,” the ITAT found the disallowance to be unfounded and confirmed the CIT(A)’s order deleting the addition.
Operative Part
“We are of the considered view that the disallowance made by the Assessing Officer over and above the suo-moto disallowance made by the assessee is without any basis and deserves to be deleted,” the Bench stated. Accordingly, the Tribunal dismissed the Revenue’s appeal, thereby granting full relief to Aishwarya Rai Bachchan.
Appearance
Appellant by: Shri Mani Jain
Respondent by: Shri Surendra Mohan- Sr. DR
Cause Title: ACIT v. Aishwarya Rai Bachchan
Case No: ITA No.5403/MUM/2025 (A.Y.2022-23)
Coram: Pawan Singh (Judicial Member), Renu Jauhri (Accountant Member)
