CIT v. Walfort Share & Stock Brokers (P.) Ltd.

326 ITR 1Supreme Court of India2010#116 most cited

What is CIT v. Walfort Share & Stock Brokers (P.) Ltd. authority for?

For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.

543

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2011 to 2026.

Also referred to as

CIT v. Walfort Share & Stock Brokers P. Ltd. · 326 ITR 1 · Section 14A disallowance · proximate cause exempt income · not automatic disallowance · actual exempt income · Section 94(7) · dividend stripping · loss ignored to extent of dividend · tax-exempt income expenditure

Also reported as

192 Taxmann 21141 DTR 233

Sections most often in play

Section 14ASection 143(3)Section 94(7)Section 10(35)Section 133ASection 148Section 148ASection 48
Read the full judgment

Issues it is cited on

section 14a(1)strategic investmentsection 14a(2)section 10(34)disallowance under section 14adisallowance u/s 14asection 14asection 80iamercantile system of accountingsection 115jbsection 115jrevenue expenditure

Judgments citing CIT v. Walfort Share & Stock Brokers (P.) Ltd.

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

Appeal of the assessee is partly allowed for statistical purpose

ITA 467/DEL/2014[2009-10]Status: DisposedITAT Delhi17 Oct 2018AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A .No. 467/Del/2014 (A.Y 2009-10)

Section 143(3)Section 144CSection 144C(5)Section 43Section 43B

…g officer does not have power to compute disallowance under section 14A of the Act as per provisions of Rule 8D, even for assessment years 2008-09 and onwards. Reliance in this regard is placed on following decisions: • CIT vs. Walfort Share & Stock Brokers: 326 ITR 1 (SC) • Godrej & Boyce Mfg. Co. Ltd. v. DCIT : 394 ITR 449 (SC) - affirming Godrej & Boyce Mfg. Co. Ltd. v. CIT: 328 ITR 81 (Bom.) • Maxopp Investment Ltd. vs. CIT: 347 ITR 272 (Del.) Attention is also invited to the decision of Punjab & Haryana High Court in the case of CIT vs. Hero Cycles: 323 ITR 518, wherein, too, High Court held that disallowa…

ACIT, Circle, Panchkula vs. M/S Janak Global Resources Pvt. Ltd., Panchkula

In the result, the appeal of the Revenue is dismissed

ITA 470/CHANDI/2018[2014-15]Status: DisposedITAT Chandigarh16 Oct 2018AY 2014-15
For Appellant: Shri Manoj KumarFor Respondent: Shri Parikshit Aggarwal, CA
Section 36Section 36(1)(iii)

…disallowed and could not be treated as business expenditure. The Hon'ble Apex Court reaffirmed the theory of apportionment of expenditure between taxable and non taxable income laid down by it in the case of CIT Vs. Walfort Share & Stock Brokers Pvt. Ltd., 326 ITR 1. After holding so, the Hon'ble Apex Court dealt with the appeal filed in the case of Avon Cycles Ltd. (supra) and taking note that the fact in that case was that the funds utilized by the assessee were mixed funds, the Hon'ble Apex Court held that the (supra) and more specifically para 42 of the said order 12 A.Y. 2014-15 wherein the case of Av…

Asst CIT Cir 6(1)(2), Mumbai vs. Ask Investment Managers P.Ltd, Mumbai

The appeal of the Revenue is allowed for statistical

ITA 534/MUM/2017[2012-13]Status: DisposedITAT Mumbai09 Oct 2018AY 2012-13

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Year 2012-13 Acit M/S Ask Investment Circle-6(1)(2), Managers Pvt. Ltd. बनाम/ R. No.536, 5Th Floor, 1St Floor Bandbox House, Vs. Aayakar Bhavan, Dr. Ab Road, Worli, M. K. Road, Churchgate, Mumbai-400030 Mumbai-400020 (राज"व /Revenue) ("नधा"रती /Assessee) P.A. No. Aafca2302P Shri Nitin Waghmode-Dr राज"व क" ओर से / Revenue By "नधा"रती क" ओर से / Assessee By Shri J.D. Mistri Sr. Advocate

Section 115JSection 14A

…t income. The said expression “in relation to” has been judiciously explained to mean some real and dominant relationship. 4.9. In this regard ld. counsel has relied on the decision of Hon’ble Supreme Court in the case of CIT Vs. Walford Share & Stock Brokers 326 ITR 1, wherein it has been held by the Apex Court that there must be proximate relationship of expenditure with the exempt income for the purpose of making disallowance u/s 14A of the Act. This decision was followed by the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. CIT 328 ITR 81. 4.10. He further referred to the decision o…

Aangan Agrotech Exports Pvt. Ltd., Ahmedabad vs. The Income Tax Officer, Ward-1(1), Ahmedabad

In the result, the appeal filed by the Assessee is partly allowed

ITA 474/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad08 Oct 2018AY 2010-11

Bench: Shri Pramod Kumar & Shri Mahavir Prasad)

For Appellant: Shri Afaq Saiyed, ARFor Respondent: Shri S. K. Dev, Sr. D.R
Section 10(38)Section 14A

…IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. No: 474/AHD/2015 (Assessment Year: 2010-11) Aangan Agrotech Exports V/S Income Tax Officer, Ward- Pvt. Ltd. 31, Madhuban 1 (1), Ahmedabad Tower, B/h. Town Hall, Ellisbridge, Ahmedabad- 380006 (Appellant) (Respondent) PAN: AADCA 1828N Appellant by : Shri Afaq Saiyed, AR Respondent by : Shri S. K. Dev, Sr. D.R. (आदेश)/ORDER Date of hearing : 18 -09-2018 Date of Pronouncement : 08 -10-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. This appeal by the Assesse…

Shivalik Ventures P. Ltd, Mumbai vs. DCIT (OSD-1), Mumbai

In the result, appeal of the Revenue is dismissed and the appeal of the

ITA 5407/MUM/2015[2012-13]Status: DisposedITAT Mumbai19 Sept 2018AY 2012-13

Bench: Shri B.R. Baskaran & Shri Pawan Singhm/S Shivalik Ventures Pvt. Ltd. Acit Cc-4(2), Plot No. 756, Staney Fernandes Aayakar Bhavan, .M. K. Road, Wadi, D S Babrekar Marg, Vs. Mumbai-400020. Dadar (W), Mumbai-400028. Pan: Aalcs7683R Appellant Respondent Acit Cc-4(2), M/S Shivalik Ventures Pvt. Ltd. Aayakar Bhavan, .M. K. Road, Plot No. 756, Staney Fernandes Mumbai-400020. Vs. Wadi, D S Babrekar Marg, Dadar (W), Mumbai-400028. Pan: Aalcs7683R Appellant Respondent Appellant By : Shri Vijay Mehta, Anuj Kisnadwala (Ar) Respondent By : Shri Manjunatha Swamy (Cit-Dr), Rajeev Gubgotra Date Of Hearing : 31.08.2018 Date Of Pronouncement : 19.09.2018 Orderunder Section 254(1)Of Income Tax Act Per Pawan Singh; 1. These Cross Appeals Filed Under Section 253 Of The Act Are Directed Against

For Appellant: Shri Vijay Mehta, Anuj Kisnadwala (AR)For Respondent: Shri Manjunatha Swamy (CIT-DR), Rajeev Gubgotra
Section 132Section 143(3)Section 253Section 254(1)

…allowable, as held by Hon’ble Bombay High Court in the case of Goodlass Nerolac Paints (137 ITR 58)(Bom). He submitted that the losses are not considered as expenditure as per the decision of Hon’ble Supreme Court in the case of Walfort Shares & securities (326 ITR 1)(SC). Relying on the decision of Nainital Bank (supra), the Ld D.R contended that each and every loss is not deductible. He also placed his reliance on the decisions reported in the case of Swadeshi Cotton Mills (63 ITR 57) to contend that the expenses, which are incurred wholly and exclusively for the purposes of business alone are deductible. T…

ACIT, Alwar vs. Vijay Solvex Limited, Alwar

In the result, revenue’s appeal as well as the C

ITA 292/JPR/2014[2008-09]Status: DisposedITAT Jaipur24 Aug 2018AY 2008-09
For Appellant: Shri P.C. Parwal (CA)For Respondent: Mrs. Roshanta Meena (JCIT) fu/kZkfjrh dh vksj ls@
Section 14ASection 92C

…interest free funds of Rs 688.76 lakhs. On the other hand, the unsecured loans and working capital loans stood invested in the stock and current debtors. 6.2 It was held by Hon'ble Supreme Court in the case of CIT Vs Walfort Shares & Stock Brokers Pvt. Ltd (326 ITR 1) that for attracting section 14A, there has to be a proximate cause for disallowance which is its relationship with the tax exempt income. The Hon'ble Punjab & Haryana High Court in the case of CU Vs Hero Cycles Ltd (323 ITR 518) held that merely because the assessee had incurred interest expenditure on borrowed funds, it would not ipso facto invit…

ACIT 9(3)(2), Mumbai vs. Gini & Jony Ltd, Mumbai

In the result , appeal of the Revenue in ITA no

ITA 1892/MUM/2017[2009-10]Status: DisposedITAT Mumbai21 Aug 2018AY 2009-10

Bench: Shri C.N. Prasad & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.1892 & 1893/Mum/2017 (नििाारण वर्ा / Assessment Year : 2009-10 & 2012-13) बिाम/ Acit 9(3)(2) M/S. Gini & Jony Ltd. 418, 4Th Floor, A-601, Citi Point, Aayakar Bhavan, Andheri Kurla Road, V. Mumbai-400020 Andheri (E), Mumbai-400059, स्थायी ऱेखा सं./ Pan : Aaacg1295N (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Gaurav KabraFor Respondent: Shri A.M. Mittal, CIT-DR
Section 143(3)Section 147Section 14ASection 37

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10. The provisio…

DCIT 10(2)(2), Mumbai vs. Mirc Electronics Private Ltd, Mumbai

In the result, the appeal Revenue is dismissed

ITA 3845/MUM/2018[2013-14]Status: DisposedITAT Mumbai10 Aug 2018AY 2013-14

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.3845 & 3846/Mum/2018 (नििाारण वर्ा / Assessment Year : 2013-14 & 2014-15) बिाम/ Dcit-10(2)(2) Mirc Electronics Room No. 216-A, 2Nd Floor Limited, G-1, Aayakar Bhavan, M K Road Onida House, V. Mumbai-400020 Mahakali Caves Road, Midc, Mumbai-400093 स्थायी ऱेखा सं./ Pan : Aaacm8055A (अपीऱाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri. Satish Chandra Rajore Assessee By : Shri Dharmendra Singh सुनवाई की तारीख /Date Of Hearing : 10.08.2018 घोषणा की तारीख /Date Of Pronouncement : 10.08.2018 आदेश / O R D E R Per Bench: These Two Appeals, Filed By Revenue, Being Ita No. 3845 & 3846/Mum/2018 For Assessment Year 2013-14 & 2014-15 Respectively , Are Directed Against Separate Appellate Order(S) Both Dated 27.03.2018 Passed By Learned Commissioner Of Income Tax (Appeals)-17, Mumbai (Hereinafter Called “The Cit(A)”), For Assessment Year 2013-14 & 2014-15 Respectively , The Appellate Proceedings Had Arisen Before Learned Cit(A) From Separate Assessment Order(S) Dated 28.03.2016 & 29.12.2016 Respectively Passed By Learned Assessing Officer (Hereinafter Called “The Ao”) U/S 143(3) Of The Income-Tax Act

For Appellant: Shri Dharmendra SinghFor Respondent: Shri. Satish Chandra Rajore
Section 10(34)Section 143(3)Section 14A

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 I.T.A. No.3845 & 3846/Mum/2018 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to…

DCIT Cir. 2(2)(1), Mumbai vs. L & T Power Development Ltd., Mumbai

In the result, the appeal of the revenue stand dismissed

ITA 874/MUM/2017[2013-14]Status: DisposedITAT Mumbai10 Aug 2018AY 2013-14

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.874/Mum/2017 (नििाारण वर्ा / Assessment Year : 2013-14) Dcit Cit 2(2)(1) बिाम/ L&T Power Development Room No. 545, 5 Th Floor, Ltd., Aayakar Bhavan, L&T House, N.M. Road, V. M.K Road, Ballard Estate, Mumbai-400020 Mumbai-400038 स्थायी ऱेखा सं./ Pan : Aabcl3867C (अपीऱाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri. Nishant Samaiya, Dr Assessee By : Shri Govind Jhaveri सुनवाई की तारीख /Date Of Hearing : 09.08.2018 घोषणा की तारीख /Date Of Pronouncement : 09.08.2018 आदेश / O R D E R Per Ramit Kocharthis Appeal, Filed By The Revenue, Being Ita No. 874/Mum/2017, Is Directed Against Appellate Order Dated 09.11.2016 Passed By Learned Commissioner Of Income Tax (Appeals)-5, Mumbai (Hereinafter Called “The Cit(A)”), For Assessment Year 2013-14, The Appellate Proceedings Had Arisen Before Learned Cit(A) From Assessment Order Dated 30.11.2015 Passed By Learned Assessing Officer (Hereinafter Called “The Ao”) U/S 143(3) Of The Income-Tax Act, 1961 (Hereinafter Called “The Act”) For Assessment Year 2013-14. I.T.A. No.874/Mum/2017

For Appellant: Shri Govind JhaveriFor Respondent: Shri. Nishant Samaiya, DR
Section 143(3)Section 14A

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10. The provisio…

DCIT, C-4(1), Chandigarh vs. M/S Punjab Agro Industries Corp. Ltd., Chandigarh

In the result, appeal of the Revenue is hereby dismissed

ITA 1320/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh23 Jul 2018AY 2013-14

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2013-14

For Appellant: Shri. Satish BansalFor Respondent: Shri. Yoginder Mittal
Section 14A

…hus, one to one relationship has been established between the borrowed funds and the investments made by the AO. 2. In this regard, kind attention is invited to the decision of the H'ble Supreme Court in the case of Walfort Share and Stock Brokers (P) Limited 326 ITR 1 (SC) wherein it was held that the Section 14A clarifies that expenses incurred can be allowed only to the extent they are "relatable to the earning of taxable income". The relevant observation of the H'ble Supreme Court is apparent from the relant extract as reproduced below: "17. The. insertion of S.14A with retrospective effect is the serious att…

M/S. Federal Mogul Goetze India Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 3324/DEL/2015[2009-10]Status: DisposedITAT Delhi27 Jun 2018AY 2009-10

Bench: : Shri Bhavnesh Saini & Shri L.P. Sahu

Section 14ASection 36(1)(ii)Section 36(1)(iii)

…Section 14A contemplates is the expenditure actually incurred for earning tax free income and not assumed expenditure or deemed expenditure. " It may be submitted that this judgement of the Bombay High Court has been confirmed by the Hon'ble Supreme Court in [326 ITR 1]. ITA No. 3324/Del./2015 6 Similarly, in the case of CIT v. Hero Cycles Ltd. 323 ITR 518, Hon'ble Punjab & Haryana High Court has held that "if there is no nexus between income earned and expenditure incurred, no disallowance can be made. " We may also refer to the decision of Hon'ble Delhi High Court in the case of CIT v. Sushma Kapoor reported…

M/S Munjal Showa Limited, Haryana vs. Deputy Commissioner of Income-Tax, New Delhi

In the result, appeal of the assessee is allowed in part for statistical purposes

ITA 1579/DEL/2015[2010-11]Status: DisposedITAT Delhi27 Jun 2018AY 2010-11

Bench: Shri R.S. Syal & Shri K.Narasimha Charyassessment Year: 2010-11 Vs Dcit, Circle 17(1), Munjal Showa Ltd., 9-11, Maruti Industrial Area, New Delhi. Gurgaon, Haryana. Pan: Aaacm0070D

Section 14ASection 94(8)

…tfully following the decision of the Hon’ble jurisdictional High Court in the case of HT Media vs Pr. CIT (2017) 85 Taxmann.com 113 (Del), CIT vs Reliance Utilities and Powers Ltd. (2009) 313 ITR 340 (Bom); CIT vs Walfort Share & Stock Brokers (P) Ltd. (2010) 326 ITR 1 (SC); and Godrej and Boyce Mfg. Co. Ltd. vs DCIT, 328 ITR 81, it was held that in the absence of AO determining the direct nexus between parties funds and investment, no question of invoking the provisions of Section 14A arises. While respectfully following the decisions cited 7 (supra), we find that the disallowance to the tune of Rs.35.56 lacs m…

Matrix Enport Holdings Private Limited, Secunderabad, Hyderabad vs. ACIT, Circle-16(2), Hyderabad

In the result, appeal of assessee is allowed

ITA 15/HYD/2017[2012-13]Status: DisposedITAT Hyderabad08 Jun 2018AY 2012-13

Bench: Smt P. Madhavi Devi & Shri S. Rifaur Rahmanassessment Year: 2012-13 Matrix Enport Holdings Pvt. Vs. Asst. Commissioner Of Ltd., Secunderabad Income-Tax, Circle – 16(2), Hyderabad. Pan – Aafcm 4926R

For Appellant: Shri K.A. Sai PrasadFor Respondent: Shri M. Naveen
Section 143(1)Section 143(2)Section 143(3)Section 14A

…it does not account for the concept of 'real income'. It does not note that under Section 5 of the Act, the question of taxation of 'notional income' does not arise. As explained in Commissioner of Income Tax v. Walfort Share and Stock Brokers Pvt. Ltd [2010] 326 ITR 1 (SC), the mandate of Section 14A of the Act is to curb the practice of claiming deduction of expenses incurred in relation to exempt income being taxable income and at the same time avail of the tax incentives by way of exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income. Consequently, the C…

Asst. Commissioner of Income Tax, Circle-16(1), Hyderabad vs. Lanco Thermal Power Limited, Hyderabad

In the result, Revenue’s appeal is accordingly dismissed

ITA 421/HYD/2018[2014-15]Status: DisposedITAT Hyderabad06 Jun 2018AY 2014-15

Bench: Smt. P. Madhavi Devi & Shri S.Rifaur Rahmandy. Commissioner Of Vs M/S. Lanco Thermal Power Income Tax, Circle 16(1) Limited, Hyderabad Hyderabad Pan: Aabcv6386N (Appellant) (Respondent)

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri M.H. Naik, DR
Section 14A

…ed in deleting the disallowance u/s 14A of Rs.5, 79,05,000/-. 2. The CIT(A) erred in ignoring CBDTs circular No.5 of 2014 dated 11.02.2014. 3. The CIT(A) erred in ignoring the Supreme Court decision in the case of CIT vs. Walfort Share of Stock Brokers P Ltd [326 ITR 1], wherein it was held that the mandate of section 14A was to curb the practice of claiming deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of exempt income without making any apportionment of expenses incurred in relation to exempt income. Page 1 of 2 ITA N…

The ACIT, Central-1, Indore vs. M/S. Arihant Capital Markets Ltd., Indore

In the result, the appeal of the revenue and cross objection of

ITA 370/IND/2017[2013-14]Status: DisposedITAT Indore31 May 2018AY 2013-14

Bench: Shri Kul Bharat & Shri Manish Boradassessment Year: 2013-14

Section 143(2)Section 143(3)Section 14A

…n in so far as that the disallowance can be contemplated only when exempt income is earned and there is some expenditure incurred. The Honourable Supreme Court also upheld its own findings rendered in CIT v/s Wallfort Shares & Stock Brokers Pvt. Ltd. (2010) 326 ITR 1 (SC) that the basic principal of taxation is to tax the net income and on the same analogy the exemption is also in respect of net income attracted. 15. The above distinguishing facts prove that the finding of the Hon'ble Apex Court cannot be applied to the facts of the assessee’s case because it is well evident that the borrowed funds have not…

Assistant Commissioner of Income Tax, Kota vs. Smt. Manisha Agarwal, Kota

In the result, appeal of the revenue is dismissed

ITA 340/JPR/2018[2011-12]Status: DisposedITAT Jaipur16 May 2018AY 2011-12
For Appellant: NoneFor Respondent: Shri Raj Mehra (JCIT) fu/kZkfjrh dh vksj ls@
Section 14A

…tion shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. 120101 326 ITR 1 .... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income 4 Smt. Manisha Agarwal, Kota. without making any apportionment of expenses incurred in relation to…

ITO, Ward-2(1), Guntur vs. Vasantha Traders, Guntur

In the result, appeal of the revenue is dismissed

ITA 17/VIZ/2018[2013-14]Status: DisposedITAT Visakhapatnam04 May 2018AY 2013-14

Bench: Shri V. Durga Rao& Shri D.S. Sunder Singhआयकर अपील सं./I.T.A.No.17/Viz/2018 (धनधाारण िर्ा/Assessment Year:2013-14) Ito Vs. M/S Vasantha Traders Ward-2(1) D.No.4-383/6, Guntur Thimmapuram(V) Edlapadu(M) Guntur [Pan :Aahfv8178M] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलाथी की ओर से/ Appellant By : Shri V.Appala Raju, Dr प्रत्यथी की ओर से / Respondent By : Shri G.V.N.Hari, Ar सुनिाई की तारीख / Date Of Hearing : 26.04.2018 04 .05.2018 घोषणा की तारीख/Date Of Pronouncement :

For Appellant: Shri V.Appala Raju, DRFor Respondent: Shri G.V.N.Hari, AR
Section 14A

…4A was inserted providing that no deduction shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. The Supreme Court in the judgment in the case of CIT v. Walfort Share & Stock Brokers (P.) Ltd. [2010] 326 ITR 1/192 Taxman 211 has observed that section 14A desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income. The provisio…

ACIT, Circle-12(2), Kolkata vs. M/S Selvel Advertising Private Limited, Kolkata

In the result, appeals filed by Revenue in ITA No

ITA 2197/KOL/2016[2013-14]Status: DisposedITAT Kolkata04 May 2018AY 2013-14

Bench: Shri Aby T. Varkey & Dr.A.L. Saini

Section 143(3)Section 14ASection 153Section 2(24)(x)Section 36(1)(va)

…is taxable. For attracting the provisions of section 14A- “there should be proximate cause for disallowance which has relationship with the tax exemptincome as held by the Hon'ble Supreme Court in case of CIT Vs. Walfort Share and Stock Brokers P. Ltd. (2010) 326 ITR 1). Therefore, there should be a proximate relationship between the expenditure and the income which does not form part of the total income. In the case in hand the assessee has claimed that no expenditure has been incurred for earning the exempt income, therefore, it was incumbent on the AO to find out as to whether the assessee has incurred any exp…

ACIT, Cir-12(2), Kolkata vs. M/S Selvel Advertising Private Limited, Kolkata

In the result, appeals filed by Revenue in ITA No

ITA 2196/KOL/2016[2012-13]Status: DisposedITAT Kolkata04 May 2018AY 2012-13

Bench: Shri Aby T. Varkey & Dr.A.L. Saini

Section 143(3)Section 14ASection 153Section 2(24)(x)Section 36(1)(va)

…is taxable. For attracting the provisions of section 14A- “there should be proximate cause for disallowance which has relationship with the tax exemptincome as held by the Hon'ble Supreme Court in case of CIT Vs. Walfort Share and Stock Brokers P. Ltd. (2010) 326 ITR 1). Therefore, there should be a proximate relationship between the expenditure and the income which does not form part of the total income. In the case in hand the assessee has claimed that no expenditure has been incurred for earning the exempt income, therefore, it was incumbent on the AO to find out as to whether the assessee has incurred any exp…

ACIT 21(1), Mumbai vs. Arvind Kumar Aggarwal, Mumbai

In the result, appeal filed by the revenue is hereby dismissed and cross-objection filed by the assessee is hereby ordered to be partly allowed

ITA 910/MUM/2015[2011-12]Status: DisposedITAT Mumbai04 May 2018AY 2011-12

Bench: Shri R. C. Sharma, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.910/Mum/2015 (निर्धारण वर्ा / Assessment Year: 2011-12) Acit-21(1) (Erstwhile बिधम/ Shri Arvind Kumar Aggarwal, Flat No.805-806, Acit-18(1) Room No. 116, Vs. El-Dorado Chsl, Vs Road, 1St Floor, Piramal Chambers, Prabhadevi, Mumbai-400028 Parel, Mumbai-400012 Co. No.147/Mum/2016 (Ita. No. 910/Mum/2015) (निर्धारण वर्ा / Assessment Year: 2011-12) Shri Arvind Kumar बिधम/ Acit-21(1) (Erstwhile Aggarwal, Flat No.805-806, Acit-18(1) Room No. 116, Vs. El-Dorado Chsl, Vs Road, 1St Floor, Piramal Chambers, Prabhadevi, Mumbai-400028 Parel, Mumbai-400012 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacpm2137J (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri V. Vidhyadhar (Dr) Assessee By: Shri Rajiv Khandelwal सुनवाई की तारीख / Date Of Hearing: 06.04.2018 घोषणा की तारीख /Date Of Pronouncement: 04.05.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue As Well As Assessee Have Filed The Above Mentioned Appeals As Well As Cross Objection Against The Order Dated 27.11.2014 Passed By The Commissioner Of Income Tax (Appeals)-33, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2011-12. Ita. No.910/M/15 Co. No. 147/M/2016 A.Y. 2011-12

For Appellant: Shri Rajiv KhandelwalFor Respondent: Shri V. Vidhyadhar (DR)
Section 10BSection 142(1)Section 143(2)Section 48Section 53ASection 54

…majority Judgment in the McDowell held ix planning may be legitimate provided it is within the framework of Law" 38, In a number of judgments like McDowells& Co Vs CTO (154 ITR 148), AzadiBachaoAndolan (263 ITR 706) and Walfort Shares & Stock Brokers Pvt Ltd (41 DTR 233), in the context of tax avoidance and tax evasion, the Hon'ble Supreme Court has laid down certain broad principles in this respect which are as follows - • Every action or inaction which results in reduction of lax {lability is not to be viewed with suspicion and IEno! to be treated as a device for avoidance of tax; • A tax-saving motivation does…