Dhanuka & Sons. v. CIT

339 ITR 319High Court2011#1115 most cited

What is Dhanuka & Sons. v. CIT authority for?

Disallowance under Section 14A for expenditure incurred to earn exempt dividend income (under Section 10(34)) is permissible. The assessee bears the burden to show the source of funds for acquiring shares, regardless of whether those shares are old or recently acquired.

100

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

Dhanuka & Sons v. CIT · Section 14A disallowance · exempt income · dividend income · Section 10(34) · expenditure for exempt income · burden of proof acquisition shares · source of funds shares · old shares immaterial

Also reported as

12 Taxmann.com 227201 Taxmann 105244 CTR 511

Sections most often in play

Section 14ASection 115JBSection 142(1)Section 143(2)Section 143(3)Section 37Section 43ASection 80G

Issues it is cited on

section 41(4)section 194a(1)section 36(1)(viii)depreciation on goodwillsection 36(1)(viia)section 36(2)section 14a(2)section 36(1)(vii)block of assetssection 41section 194abook profits

Judgments citing Dhanuka & Sons. v. CIT

ACIT Ltu 2, Chennai vs. Indian Overseas Bank, Chennai

In the result, the assessee’s appeal in ITA No

ITA 948/CHNY/2018[2014-15]Status: DisposedITAT Chennai21 Jan 2020AY 2014-15

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकर अपील सं/.I.T.A. No. 948/Chny/2018 "नधा"रण वष"/Assessment Year : 2014-15

For Appellant: Shri. M. Srinivasa Rao, CIT
Section 115JSection 36(1)(vii)Section 36(1)(viia)

…. This decision follows the judgment of the hon’ble Bombay high court (which is also the concerned jurisdictional high court) in case of Godrej & Boyce Manufacturing Co. Ltd vs A CIT, 328 ITR 81 and that of hon’ble Calcutta high court in Dhanuka& Sons vs CIT, 339 ITR 319. Notonly this, the hon’ble Third Member also refers to the case law CC! Ltd.(supra) and expresses a view that the aforesaid decisions of otherhon’ble high courts were not brought to the notice of the Karnatakahigh court. In these circumstances, the picture that emerges is thatvarious high courts have expressed divergent opinions on this legalissu…

Indian Overseas Bank, Chennai vs. DCIT Ltu-2, Chennai

In the result, the assessee’s appeal in ITA No

ITA 777/CHNY/2018[2014-15]Status: DisposedITAT Chennai21 Jan 2020AY 2014-15

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकर अपील सं/.I.T.A. No. 948/Chny/2018 "नधा"रण वष"/Assessment Year : 2014-15

For Appellant: Shri. M. Srinivasa Rao, CIT
Section 115JSection 36(1)(vii)Section 36(1)(viia)

…. This decision follows the judgment of the hon’ble Bombay high court (which is also the concerned jurisdictional high court) in case of Godrej & Boyce Manufacturing Co. Ltd vs A CIT, 328 ITR 81 and that of hon’ble Calcutta high court in Dhanuka& Sons vs CIT, 339 ITR 319. Notonly this, the hon’ble Third Member also refers to the case law CC! Ltd.(supra) and expresses a view that the aforesaid decisions of otherhon’ble high courts were not brought to the notice of the Karnatakahigh court. In these circumstances, the picture that emerges is thatvarious high courts have expressed divergent opinions on this legalissu…

DCIT, Cir-12(1), Kolkata vs. M/S Bengal Ambuja Housing Development Ltd., Kolkata

In the result, the both appeals of the Revenue are dismissed

ITA 1514/KOL/2015[2010-2011]Status: DisposedITAT Kolkata18 Oct 2019AY 2010-2011

Bench: Shri A. T. Varkey, Jm & Shri A.L.Saini, Am]

Section 80ISection 80i

…predecessor. We therefore rely on the judgment of the Hon'ble Calcutta High Court in the case of CIT vs Rasoi Ltd. (supra) wherein the Hon'ble High Court taking note of the judgment passed by the co-ordinate Bench of the Calcutta High Court in Dhanuka & Sons 339 ITR 319 held as under: "It appears for both the assessment years the Appellate Authority held that there was no finding of direct nexus between the borrowed fund and investment in shares. The assessee's own funds were far in excess of the average total investments. There could not be any presumption of utilization of borrowed funds. Hence disallowance u…

Crompton Greaves Ltd, Mumbai vs. DCIT Cir 6(2), Mumbai

In the result, the assessee’s appeal in ITA No

ITA 5390/MUM/2017[2009-10]Status: DisposedITAT Mumbai27 Sept 2019AY 2009-10

Bench: Shri A. D. Jain, Vp & Shri Rajesh Kumar, Am Asst. Cit-6(2)(1) M/S. Crompton Greaves Ltd. R. No.504/563-C, 5Th Floor, 6Th Floor, Cg House, Vs. Aayakar Bhavan, M. K. Road, Dr. Annie Besant Road, Worli, Mumbai-400 020 Mumbai-400 030 Pan/Gir No. Aaacc 2089 A (Revenue) : (Assessee) & M/S. Crompton Greaves Ltd. Asst. Cit-6(2)(1) 6Th Floor, Cg House, R. No.504/563-C, 5Th Floor, Vs. Dr. Annie Besant Road, Worli, Aayakar Bhavan, M. K. Road, Mumbai-400 030 Mumbai-400 020 Pan/Gir No. Aaacc 2089 A (Assessee) : (Revenue) : Shri A. M. Mittal Revenue By Assessee By : Shri Pradip Kapasi Date Of Hearing : 23.09.2019 Date Of Pronouncement : 27.09.2019

For Appellant: Shri Pradip Kapasi
Section 14(1)Section 14ASection 35

…owance u/s. 14A of the Act had been made in the computation of the income. The A.O. considered the assessee’s explanation that it had not incurred any expenditure for earning the exempt income. However, the A.O. rejected the same, relying on Dhanuka and Sons 339 ITR 319 (Cal), wherein it was held that the assessee has to show the source of acquisition of shares by producing the material that the shares are acquired from funds available in the hands of the assessee at M/s. Crompton Greaves Ltd. the relevant point of time, without taking any benefit of any loan. The A.O. also relied on the decision of the Hon'ble…

ACIT 6(2)(1), Mumbai vs. Crompton Greaves Limited, Mumbai

In the result, the assessee’s appeal in ITA No

ITA 5295/MUM/2017[2009-10]Status: DisposedITAT Mumbai27 Sept 2019AY 2009-10

Bench: Shri A. D. Jain, Vp & Shri Rajesh Kumar, Am Asst. Cit-6(2)(1) M/S. Crompton Greaves Ltd. R. No.504/563-C, 5Th Floor, 6Th Floor, Cg House, Vs. Aayakar Bhavan, M. K. Road, Dr. Annie Besant Road, Worli, Mumbai-400 020 Mumbai-400 030 Pan/Gir No. Aaacc 2089 A (Revenue) : (Assessee) & M/S. Crompton Greaves Ltd. Asst. Cit-6(2)(1) 6Th Floor, Cg House, R. No.504/563-C, 5Th Floor, Vs. Dr. Annie Besant Road, Worli, Aayakar Bhavan, M. K. Road, Mumbai-400 030 Mumbai-400 020 Pan/Gir No. Aaacc 2089 A (Assessee) : (Revenue) : Shri A. M. Mittal Revenue By Assessee By : Shri Pradip Kapasi Date Of Hearing : 23.09.2019 Date Of Pronouncement : 27.09.2019

For Appellant: Shri Pradip Kapasi
Section 14(1)Section 14ASection 35

…owance u/s. 14A of the Act had been made in the computation of the income. The A.O. considered the assessee’s explanation that it had not incurred any expenditure for earning the exempt income. However, the A.O. rejected the same, relying on Dhanuka and Sons 339 ITR 319 (Cal), wherein it was held that the assessee has to show the source of acquisition of shares by producing the material that the shares are acquired from funds available in the hands of the assessee at M/s. Crompton Greaves Ltd. the relevant point of time, without taking any benefit of any loan. The A.O. also relied on the decision of the Hon'ble…

Megatherm Electronics Pvt. Ltd., Kolkata vs. DCIT, Cir-2, Kolkata

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

ITA 348/KOL/2016[2009-2010]Status: DisposedITAT Kolkata10 Jul 2019AY 2009-2010

Bench: Sh. J.Sudhakar Reddy & Sh.S.S.Viswanethra Ravimegatherm Electronics Pvt.Ltd., Vs Dcit, 123, Sdf Building, Block Gp, Circle-2, Sector-V, Salt Lake City, Kolkata-700069. Kolkata-700091. Pan-Aaccm0633N (Appellant) (Respondent) Appellant By Sh. Vivek Churiwala, Ca Respondent By Sh. C.J.Singh, Jcit, Sr.Dr Date Of Hearing 23.04.2019 Date Of Pronouncement 10.07.2019 Order Per S.S. Viswanethra Ravithis Appeal Filed By The Assessee Against The Order Dated 31.12.2015 Passed By Cit(A)-1, Kolkata For Ay 2009-10. 2. The Only Issue Is To Be Decided As To Whether The Cit(A) Is Justified In Confirming The Addition Made By The Ao U/S 14A Of The Income Tax Act, 1961 (In Short “Act”) R.W. Rule 8D(2)(Ii) Of The Income Tax Rules, 1962 (In Short “Rules”) In The Facts & Circumstances Of The Case.

Section 143(3)Section 14A

…D(2)(ii) made disallowance u/s 14A of the Act to an extent of Rs.51,57,686/- vide order u/s 143(3) of the Act. The CIT(A) confirmed the order of AO by placing reliance in the decision of Hon’ble High Court of Calcutta in the case of Dhanuka & Sons reported in 339 ITR 319 (Cal.). 4. Before us, Ld. AR submits that the ratio laid down by the Hon’ble High Court of Calcutta in the case of Dhanuka & Sons (supra) is not applicable because the assessee made investment for acquisition of shares of its subsidiary companies from the own funds available in the hands of assessee without taking the benefit of borrowed loans.…

Gujarat Urja Vikas Nigam Ltd., Baroda vs. The Dy.CIT, Circle-1(1), Baroda

In the result, appeal I.T

ITA 3437/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad26 Apr 2019AY 2008-09
For Appellant: Shri J.P. Shah, A.RFor Respondent: Shri/Ms. Rita Dokania, Sr. D.R
Section 115JSection 143(3)Section 147Section 148Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA Nos. 3358, 1988, 3359 & 3360 /Ahd/2015 A. Y. 2008-09, 2010-11, 2011-12 & 2012-13 The DCIT, Gujarat Urja Vikas Circle-1(1)(1), Nigam Ltd. Sardar Vadodara Vs Patel Vidyut Bhavan (Appellant) Race Course Circle, Baroda-390007 PAN: AACCG2861L (Respondent) ITA Nos. 3437, 2014, 3438 & 3439/Ahd/ 2015 A. Y. 2008-09, 2010-11, 2011-12 & 2012-13 Gujarat Urja Vikas Nigam The DCIT, Ltd. Sardar Patel Vidyut Circle-1(1)(1), Bhavan Race Course Vs Vadodara Circle, Baroda-390007…

The Dy.Commissioner of Income Tax, Circle-1(1)(1)(1), Vadodara vs. Gujarat Urja Vikas Nigam Ltd., Baroda

In the result, appeal I.T

ITA 3358/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad26 Apr 2019AY 2008-09
For Appellant: Shri J.P. Shah, A.RFor Respondent: Shri/Ms. Rita Dokania, Sr. D.R
Section 115JSection 143(3)Section 147Section 148Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA Nos. 3358, 1988, 3359 & 3360 /Ahd/2015 A. Y. 2008-09, 2010-11, 2011-12 & 2012-13 The DCIT, Gujarat Urja Vikas Circle-1(1)(1), Nigam Ltd. Sardar Vadodara Vs Patel Vidyut Bhavan (Appellant) Race Course Circle, Baroda-390007 PAN: AACCG2861L (Respondent) ITA Nos. 3437, 2014, 3438 & 3439/Ahd/ 2015 A. Y. 2008-09, 2010-11, 2011-12 & 2012-13 Gujarat Urja Vikas Nigam The DCIT, Ltd. Sardar Patel Vidyut Circle-1(1)(1), Bhavan Race Course Vs Vadodara Circle, Baroda-390007…

Eveready Industries India Ltd., Kolkata vs. DCIT, Circle - 11(1), Kolkata

In the result, the appeal of the assessee is partly allowed

ITA 655/KOL/2018[2012-13]Status: DisposedITAT Kolkata13 Feb 2019AY 2012-13

Bench: Shri P.M. Jagtap, Vice-(Kz) & Shri S.S. Viswanethra Ravi

Section 115JSection 143(3)Section 144C(3)Section 14ASection 263Section 30Section 35Section 35DSection 36(1)(iv)Section 37

…ITA No. 655/KOL/2018 A.Y. 2012-2013 Eveready Industries India Limited IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA ‘A’ BENCH, KOLKATA Before Shri P.M. Jagtap, Vice-President (KZ) and Shri S.S. Viswanethra Ravi, Judicial Member I.T.A. No. 655/KOL/2018 Assessment Year: 2012-2013 Eveready Industries India Limited,................................................Appellant 1, Middleton Street, Kolkata-700 071 [PAN: AAACE 5778 N] -Vs.- Deputy Commissioner of Income Tax,...........................................Respondent Circle-11(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 Appearanc…

Rasna Pvt. Ltd., Ahmedabad vs. The Dy. CIT., Circle-3(1)(2), Ahmedabad

In the result, appeal ITA 2334/Ahd/2015 filed by assessee is partly allowed

ITA 2334/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad30 Jan 2019AY 2010-11
For Appellant: Shri P.F. Jain, A.RFor Respondent: Shri Lalit P. Jain, Sr. D.R
Section 143(3)Section 36Section 41(1)

…ts, I hold that disallowance for the purpose of section 14A is to be made against interest expenditure debited in the Profit & Loss account. This way, I am inclined to agree with the disallowance made by the Id. A.O. Further in the case of M/s. Dhanuka & Sons 339 ITR 319 Hon'ble Kolkata High Court has held that, it is for the assessee to show thq source of acquisition of those shares by production of materials that those were acquired from the funds available in the hands of the assessee at the relevant point of time without taking benefit of any loan. Hon'bie Ahmedabad Bench in the case of AC IT vs Transformers…

The DCIT, Circle-1(1)(1), Ahmedabad vs. Arcoy Inustries(India) Pvt. Ltd., Ahmedabad

In the result, revenue’s appeal is dismissed

ITA 1770/AHD/2016[2012-13]Status: DisposedITAT Ahmedabad24 Jan 2019AY 2012-13

Bench: Shri Pramod Kumar & Ms. Madhumita Roy

For Appellant: Shri Vinod Talwani, Sr.D.RFor Respondent: Shri P.M. Mehta and G. M. Thakor, A.R
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 145ASection 14A

…rest bearing funds for making investment is not tenable since the assessee company has not shown it by any flow of funds. Reliance was placed by the Learned DR on the judgment passed by the Hon’ble High Court of Calcutta in the case of Dhanuka & Sons Vs. CIT, 339 ITR 319 (2011) where it was held that it was for the assessee to show by production of materials on records that, the shares were acquired from funds available in its hand at relevant point of time without taking benefit of any loans. It is a fact that the assessee as suo moto disallowed Rs.29,20,159/- in the computation of income and therefore the expen…

Symphony Ltd., Ahmedabad vs. The Dy.CIT, Circle-8, Ahmedabad

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

ITA 2133/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad16 Jan 2019AY 2010-11
For Appellant: Shri Bharat Shah, A.RFor Respondent: Shri Mudit Nagpal, Sr. D.R
Section 14Section 143(2)Section 143(3)Section 14ASection 14A(2)Section 14A(3)

…facts, I hold that disallowance for the purpose of section 14A is to be made against interest expenditure debited in the Profit & Loss account. This way, I am inclined to agree with the disallowance made by the A.O. Further in the case of M/s. Dhanuka & Sons 339 ITR 319 Hon’ble Kolkata High Court has held that, it is for the assessee to show the source of acquisition of these shares by production of material that these were acquired from the funds available in the hands of the asessee at the relevant point of time without taking benefit of any loan. Hon’ble Ahmedabad Bench in the case of ACIT vs. Transformer & R…

Maruti Traders & Investors, Kolkata vs. ACIT, Circle - 31, Kolkata

In the result, the appeal of the assessee in ITA No

ITA 637/KOL/2018[2013-14]Status: DisposedITAT Kolkata28 Nov 2018AY 2013-14

Bench: Hon’Ble Shri S.S.Godara, Jm & Hon’Ble Shri M.Balaganesh, Am] I.T.A No. 846/Kol/2017 I.T.A. No. 637/Kol/2018 Assessment Year : 2013-14

For Appellant: Shri D.S. Damle, ARFor Respondent: Shri P.K. Srihari, CIT DR
Section 143(3)Section 14A

…entions of the assessee and by placing reliance on the special bench decision of Mumbai Tribunal in the case of ITO vs Daga Capital Management P Ltd reported in 117 ITD 169 and Hon’ble Jurisdictional High Court in the case of Dhanuka & Sons vs CIT reported in 339 ITR 319 (Cal) arrived at the average of shares held as stock in trade and applied 0.5% thereon and made disallowance u/s 14A of the Act in the sum of Rs 28,41,850/-. 2.2. The assessee clearly pointed out from its audited financial statements for the year under consideration as well as in the subsequent assessment years that it had retained the investmen…

Maruti Traders & Investors, Kolkata vs. ACIT Circle 31, Kolkata

In the result, the appeal of the assessee in ITA No

ITA 846/KOL/2017[2013-14]Status: DisposedITAT Kolkata28 Nov 2018AY 2013-14

Bench: Hon’Ble Shri S.S.Godara, Jm & Hon’Ble Shri M.Balaganesh, Am] I.T.A No. 846/Kol/2017 I.T.A. No. 637/Kol/2018 Assessment Year : 2013-14

For Appellant: Shri D.S. Damle, ARFor Respondent: Shri P.K. Srihari, CIT DR
Section 143(3)Section 14A

…entions of the assessee and by placing reliance on the special bench decision of Mumbai Tribunal in the case of ITO vs Daga Capital Management P Ltd reported in 117 ITD 169 and Hon’ble Jurisdictional High Court in the case of Dhanuka & Sons vs CIT reported in 339 ITR 319 (Cal) arrived at the average of shares held as stock in trade and applied 0.5% thereon and made disallowance u/s 14A of the Act in the sum of Rs 28,41,850/-. 2.2. The assessee clearly pointed out from its audited financial statements for the year under consideration as well as in the subsequent assessment years that it had retained the investmen…

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1392/KOL/2017[2011-12]Status: DisposedITAT Kolkata22 Nov 2018AY 2011-12

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…Court in the case of CIT vs. Rasio Ltd (ITA No.109 of 2016) dated 15.02.2017 appeared to be very relevant. In this judgment the jurisdictional Calcutta High Court had benefit of considering the earlier judgment of the same court in the case of Dhauka & Sons (339 ITR 319) as also the judgment of the Bombay High Court in the case of CIT vs. HDFC Bank (383 ITR 529). In the case of Rasoi Ltd (supra), the High Court found that assessee’s own funds were higher than the investments in tax free securities and in that view of the matter, the interest disallowance made u/s. 14A read with Rule 8D(2)(ii) which was deleted b…

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1391/KOL/2017[2010-11]Status: DisposedITAT Kolkata22 Nov 2018AY 2010-11

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…Court in the case of CIT vs. Rasio Ltd (ITA No.109 of 2016) dated 15.02.2017 appeared to be very relevant. In this judgment the jurisdictional Calcutta High Court had benefit of considering the earlier judgment of the same court in the case of Dhauka & Sons (339 ITR 319) as also the judgment of the Bombay High Court in the case of CIT vs. HDFC Bank (383 ITR 529). In the case of Rasoi Ltd (supra), the High Court found that assessee’s own funds were higher than the investments in tax free securities and in that view of the matter, the interest disallowance made u/s. 14A read with Rule 8D(2)(ii) which was deleted b…

DCIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Limited, Kolkata

ITA 1390/KOL/2017[2009-10]Status: DisposedITAT Kolkata22 Nov 2018AY 2009-10

Bench: Shri S.S.Godara & Shri, M. Balaganesh

Section 143(3)Section 92B

…Court in the case of CIT vs. Rasio Ltd (ITA No.109 of 2016) dated 15.02.2017 appeared to be very relevant. In this judgment the jurisdictional Calcutta High Court had benefit of considering the earlier judgment of the same court in the case of Dhauka & Sons (339 ITR 319) as also the judgment of the Bombay High Court in the case of CIT vs. HDFC Bank (383 ITR 529). In the case of Rasoi Ltd (supra), the High Court found that assessee’s own funds were higher than the investments in tax free securities and in that view of the matter, the interest disallowance made u/s. 14A read with Rule 8D(2)(ii) which was deleted b…

DCIT, Circle - 8(1), Kolkata vs. M/S. Ashiana Housing Limited, Kolkata

In the result, the appeal filed by the Revenue stands dismissed and the appeal filed by the assessee stands partly allowed for statistical purposes

ITA 2271/KOL/2017[2012-13]Status: DisposedITAT Kolkata05 Oct 2018AY 2012-13

Bench: The Cit-A. The Cit-A By Placing His Reliance On An Order Of Kolkata Bench (Itat, Kolkata) In The Case Of Rei Agro Ltd Reported In (2013) 144 Itd 141 (Kolkata-Trib) Directed The Ao To Verify The Details Of Investment Filed Before Him & To Compute The Expenditure Accordingly In Terms Of Investment, Which Yielded Exempt Income.

For Appellant: Shri A. Bhattacharya, Addl. CIT, ld. Sr.DRFor Respondent: S/Shri Arvind Agarwal, Advocate &
Section 14ASection 14A(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA Before: Shri M. Balaganesh, Accountant Member and Shri S.S. Viswanethra Ravi, Judicial Member I.T.A No. 2271/Kol/2017 A.Y: 2012-13 D.C.I.T, Circle-8(1), Vs. M/s. Ashiana Housing Kolkata Limited PAN:AADCA9093P [Appellant] [Respondent] For the Appellant : Shri A. Bhattacharya, Addl. CIT, ld. Sr.DR For the Respondent : S/Shri Arvind Agarwal, Advocate & Rajat Agarwal, CA, ld.ARs Date of hearing : 12-09-2018 Date of pronouncement : 05-10-2018 ORDER Shri S.S. Viswanethra Ravi, JM: This appeal by the Revenue is directed against the order of the Commis…

Bisnauth Investments Ltd, Kolkata vs. DCIT, Circle-6, Kolkata

In the result, both the appeals are partly allowed

ITA 681/KOL/2017[2010-11]Status: DisposedITAT Kolkata05 Sept 2018AY 2010-11

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 14A

…re such expenditure merely because as per the mathematical formula prescribed in Rule 8D(2)(iii), the expenditure disallowable exceeded the actual expenses. Relying on the judgment of the jurisdictional Calcutta High Court in the case of Dhanuka& Sons Vs CIT (339 ITR 319), he therefore submitted that the appropriate course in such a scenario would be to allocate the actual administrative expenditure on proportionate basis and disallow the expensewhich is relatable to earning tax free income. The Ld. AR therefore submitted that if such proportionate expenditure was disallowed then the amount disallowable under cla…

Bisnauth Investments Ltd, Kolkata vs. DCIT, Circle-6, Kolkata

In the result, both the appeals are partly allowed

ITA 680/KOL/2017[2009-10]Status: DisposedITAT Kolkata05 Sept 2018AY 2009-10

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 14A

…re such expenditure merely because as per the mathematical formula prescribed in Rule 8D(2)(iii), the expenditure disallowable exceeded the actual expenses. Relying on the judgment of the jurisdictional Calcutta High Court in the case of Dhanuka& Sons Vs CIT (339 ITR 319), he therefore submitted that the appropriate course in such a scenario would be to allocate the actual administrative expenditure on proportionate basis and disallow the expensewhich is relatable to earning tax free income. The Ld. AR therefore submitted that if such proportionate expenditure was disallowed then the amount disallowable under cla…