ITAT Upholds ITR of Aishwarya Rai Bachchan, Deletes ₹4.11 Crore Disallowance u/s 14A [Read Order]
The Tribunal agreed that the assessing officer’s calculation lacked sufficient basis and upheld the Commissioner of Income‑Tax (Appeals)’ decision favouring the taxpayer.
![ITAT Upholds ITR of Aishwarya Rai Bachchan, Deletes ₹4.11 Crore Disallowance u/s 14A [Read Order]](https://images.taxscan.in/h-upload/2025/11/04/2102268-itat-itr-aishwarya-rai-bachchan-disallowance-taxscan.webp "ITAT Upholds ITR of Aishwarya Rai Bachchan, Deletes ₹4.11 Crore Disallowance u/s 14A [Read Order]")
The Income‑Tax Appellate Tribunal, Mumbai Bench (ITAT) has dismissed the Revenue’s appeal against Aishwarya Rai Bachchan in her income‑tax dispute for the assessment year 2022‑23. The tribunal cancelled the proposed additional disallowance of ₹4.11 crore under Section 14A of the Income‑tax Act, 1961. The appeal challenged the taxpayer’s suo‑moto disallowance of ₹49.08 lakh and the CIT(A)’s deletion of excess disallowance, referencing the Supreme Court ruling in Maxopp Investments Ltd. v. CIT (2018).
Aishwarya Rai Bachchan had filed her return for the assessment year 2022‑23, disclosing a total income of approximately ₹39.33 crore. During scrutiny of her ITR, the AO challenged the self‑disallowed expense of ₹49,08,657 and argued that, under the mandate of Section 14A (read with Rule 8D), additional disallowance should apply to interest‑free funds used for earning exempt income.
The AO computed a 1 % disallowance on investments, arriving at roughly ₹4.60 crore, and after deducting the voluntary amount she had already disallowed, arrived at an extra disallowance of ₹4.11 crore.
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The Commissioner of Income Tax (CIT(A)) observed that the total actual expenses in the year were only around ₹2.48 crore, and found fault with the AO’s broad‑brush approach of applying 1% without demonstrating the link between funds and exempt income. The CIT(A) deleted the excess disallowance.
On appeal by the Revenue to the ITAT, the Tribunal upheld the CIT(A)’s findings, observing that the AO had not articulated any reasoned basis for rejecting the taxpayer’s calculation. Since actual total expenses were far lower than the proposed disallowance, the addition lacked substance.
Investments that did not generate tax‑free income in the year should not have been included in the computation of disallowance under Section 14A. The assessee’s representative countered that the AO had not addressed her detailed submissions, and the disallowance computation was illogical given the actual expenses incurred. As a result, the Tribunal deleted the additional disallowance of ₹4.11 crore.
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