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IN THE INCOME TAX APPELLATE TRIBUNAL

“E” BENCH MUMBAI

BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER &

SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER

ITA No. 5244/Mum/2025

(Assessment Year: 2018-19)

&

ITA No. 5245/Mum/2025

(Assessment Year: 2020-21)

DCIT Trent Limited,

552, 5^th Floor, Aayakar G-Block, Plot No. C

Bhavan, M. K. Road, Vs. 60 Trent House,

Mumbai-400 020 Beside City Bank

Bandra K Complex,

Bandra (E),

Mumbai-400 051

PAN/GIR No. AAACL1838J

(Applicant) (Respondent)

Revenue by Shri Ritesh Misra, Ld. DR

Assessee by Shri Nikhil Tiwari, Ld. AR

Date of Hearing 28.01.2026

Date of Pronouncement 05.02.2026

आदेश / ORDER

PER BENCH:

These are two appeals preferred by the Revenue for

Assessment Years 2018–19 and 2020–21, arising out of separate

orders passed by the Commissioner of Income-tax (Appeals),

2 ITA No. 5244 & 5245/Mum/2025

Trent Limited

National Faceless Appeal Centre, Delhi [hereinafter referred to as

“CIT(A)”]. Since the issues involved in both the appeals are

identical and arise out of similar factual matrix, they were heard

together and are being disposed of by this consolidated order for

the sake of convenience.

Facts of the Case

2. The assessee is a company engaged in the business of

retailing of readymade garments, accessories and household

items. For both the assessment years under consideration, the

assessee had made investments which yielded exempt income in

the form of dividend. In the respective returns of income, the

assessee had suo motu made disallowance under section 14A of

the Income-tax Act, 1961[hereinafter referred to as “the Act”] on

account of expenditure allegedly attributable to earning of exempt

income.

3. The cases were selected for scrutiny and assessments were

framed under section 143(3) read with section 144B of the Act.

During the course of assessment proceedings, the Assessing

Officer observed that the assessee had earned exempt income and

that administrative and managerial resources were necessarily

deployed for making and monitoring investments. The Assessing

Officer was of the view that the suo motu disallowance made by

the assessee was not scientific and that the provisions of section

14A read with Rule 8D of the Income-tax Rules, 1962 were

applicable. Accordingly, the Assessing Officer computed

3 ITA No. 5244 & 5245/Mum/2025

Trent Limited

disallowance by applying 1 percent of the annual average of

monthly investments and made additions over and above the

amount already disallowed by the assessee in the return of

income. Year-wise factual particulars of both the years are as

follows:

A.Y. 2018–19 A.Y. 2020–21

Particulars

Date of return of 30.11.2018 30.01.2021

income

Returned total Rs. 1,75,56,47,040/- Rs. 2,29,81,74,180/-

income

Assessment order Order dated 09.08.2021 Order dated 23.09.2022

passed under section passed under section

143(3) read with section 143(3) read with section

144B 144B

Exempt income Rs. 1,00,73,900/- Rs. 14,65,60,351/-

Suo motu Rs. 4,75,774/- Rs. 35,32,482/-

disallowance under

section 14A by

assessee

Disallowance Rs. 11,46,63,480/- Rs. 9,51,09,170/-

computed by AO

under section 14A

Addition made by Rs. 11,41,87,706/- Rs. 9,15,76,688/-

AO over and above

assessee’s

disallowance

CIT(A) order Order dated 30.06.2025 Order dated 30.07.2025

passed under section 250 passed under section 250

4. Aggrieved by the assessment orders, the assessee carried

the matter in appeal before the CIT(A). Before the first appellate

4 ITA No. 5244 & 5245/Mum/2025

Trent Limited

authority, the assessee submitted that identical issue had arisen

in its own case in earlier years and the Tribunal had accepted the

method adopted by the assessee for computing disallowance

under section 14A and had deleted the disallowance made by the

Assessing Officer by applying Rule 8D. It was contended that the

facts in the years under consideration were identical and,

therefore, the disallowance made by the Assessing Officer was

liable to be deleted.

5. The CIT(A), after considering the submissions of the

assessee and the judicial precedents in assessee’s own