PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-4 vs. M/S IFCI LTD

This appeal which calls in question the order of the Income Tax Appellate Tribunal [‘ITAT’] dated 31 August 2020 raises questions identical to those which we considered in ITA 499/2022. 2. While ruling on the question of Section 14A of the Income Tax Act, 1961 [‘Act’], the ITAT has observed thus: - “38. Ground number 9 is with respect to the disallowance u/s 14A of the income tax act. The assessee has earned exempt dividend income of Rs.271,595,658. The learned assessing officer noted that average investment in shares during the financial year 2001-02 is Rs.12,587,810,000 and the cost of borrowing is 12.14%, Rs.1,528,160,134, the proportionate interest cost attributable to earning of the dividend income. He further found that assessee has incurred the administrative expenditure of Rs.49,83,90,000 on the total receipts of Rs.22,486,490,000 wherein the dividend income is only Rs.271,595,658, therefore he worked out the proportionate administrative expenses disallowance of Rs.6,019,639. He therefore disallowed Rs.1,534,179,773 u/s 14A of the act. As the assessee has already disallowed a sum of Rs.2 lakhs, the net disallowance was made. On appeal before the learned CIT-A, he held that interest free This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/04/2024 at 12:01:01

In view of the aforesaid, we are of the considered opinion that no exception can possibly be taken to the view as expressed. The appeal raises no substantial question of law. It shall stand dismissed.