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IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCH “C”, MUMBAI

BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND

SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER

ITA No.8973/Mum/2025

(Assessment year: 2011-12)

Pankaj Jayantilal Patel vs DCIT Circle-32(1), Mumbai

6^th& 7^th Floor, Divya Darshan Room No.702, Kautilya Bhavan, G

Vallabhnagar CHS, JVPD Block, Bandra Kurla Complex,

Scheme, N S Road No.5, Vile Bandra (E), Mumbai-400051

Parle (W), Mumbai-400056

PAN:AABPP2157L

APPELLANT RESPONDENT

Assessee by : Shri Kumar Kale

Revenue by : Shri R.A. Dhyani CIT DR & Shri V.S. Mahajan (Sr.DR)

Date of hearing : 04/05/2026

Date of pronouncement : 06/05/2026

O R D E R

Per:Anikesh Banerjee (JM):

The instant appeal of the assessee filed against the order of the NFAC, Delhi

[for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax

Act 1961 (for brevity ‘the Act’) for Assessment Year 2011-12, date of order

30.10.2025. The impugned order emanated from the order of the Ld. Assistant

Commissioner of Income Tax Officer-21(1), Mumbai (for brevity the ‘Ld. AO’)

order passed under section 143(3) of the Act date of order 31.03.2014.

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ITA No.8973/Mum/2025

Pankaj Jayantilal Patel

2. The brief facts of the case are that the assessee is an individual capacity

filed the return by declaring total income Rs.1,69,18,240/-, comprising mainly of

business income amount to Rs.1,42,94,623/- in respect of Trading and F&O

activities in share and interest and short term capital gain of Rs.1,82,672/- on sale

of shares. The assessee also declares long term capital gain amount to

Rs.1,79,818/-. The assessee also reported long term capital gain Rs.10,20,97,931/-

on sale of shares which was claimed exempt u/sec. 10(38) of the Act. In the return

of Income, the assessee disallowed the expenses related to dividend income

under the head “expenses related to dividend” amount to Rs.18,44,964/- which

was claimed that the said expenses are disallowed related to dividend income in

nature of disallowance of Section 14A of the Act. During the assessment

proceeding the Ld. AO had separately calculated the expenses related exempted

income u/sec. 14A read with Rule 8D of the Income Tax Rule, 1962 and

determined 0.5% of average investment of Rs.37,33,18,980/- which comes to

Rs.18,66,595/-. The aggrieved assessee filed an appeal before the Ld. CIT(A). the

Ld. CIT(A) uphold the impugned assessment order. Being aggrieved assessee filed

an appeal before us.

3. The Ld. AR submitted a paper book comprising pages 1 to 92, which has

been placed on record. The Ld. AR contended that, in the computation of income,

the assessee had already disallowed expenditure relatable to dividend income

amounting to Rs. 18,44,964/-, and the relevant computation is annexed at APB

pages 2 to 5. Accordingly, it was argued that any further disallowance of

expenditure under section 14A r.w. Rule 8D by the Ld. AO would result in double

disallowance. The Ld. AR further submitted that the identical issue has already

been adjudicated by the Coordinate Bench of the ITAT in the assessee’s own case

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ITA No.8973/Mum/2025

Pankaj Jayantilal Patel

in ITA No. 6006/Mum/2012, order dated 28.03.2014, and the relevant extract

from paragraph 6 is reproduced here in below:

“6. After considering the entire material placed on record we are of the considered view that

disallowance under Section 14A can be made only if the assessee has incurred expenditure

against the exempt Income. If no expenditure has been claimed, no disallowance can be made

even as per Rule BD. In the instant case we found that total expenditure debited by the assessee

in the P&L account is Rs. 16,28,355/- As per the working given by the assessee before Bench the

assessee himself has made disallowance of 15% of expenditure in respect of depreciation, car

expenses, interest on car loan and car insurance. Thus, 15% of expenditure works out to be

Rs.2,20,575/- As per the assessee there is actual claim of expenditure of Rs 14,07,780/- However

as per the audited P&L account placed