Pr. CIT v. HSBC Invest Direct (India) Ltd.

421 ITR 125High Court2020#3810 most cited

What is Pr. CIT v. HSBC Invest Direct (India) Ltd. authority for?

Disallowance of expenditure incurred to earn exempt income under Section 14A cannot exceed the amount of exempt income earned.

31

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2020 to 2026.

Also referred to as

Pr. CIT v. HSBC Invest Direct (India) Ltd. · Section 14A · exempt income · disallowance · expenditure · Bombay High Court · exempt loss

Sections most often in play

Section 14ASection 143(3)Section 250Section 144C(3)Section 80D(2)(iii)Section 92BSection 92CA(3)Section 142(1)

Issues it is cited on

section 10(34)disallowance u/s 14adisallowance of interest expendituredisallowance under section 14asection 14asection 92ca(3)rule 46asection 115jbsection 92cascrutiny assessmentsection 37(1)previous year

Judgments citing Pr. CIT v. HSBC Invest Direct (India) Ltd.

ACIT-2(2)(12), Mumbai vs. M/S Mpl Plastics Limited (Earlier Known As M/S Milton Plastics Ltd), Mumbai

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

ITA 2952/MUM/2022[2013-2014]Status: DisposedITAT Mumbai27 Apr 2023AY 2013-2014
Section 143(3)Section 14A

…/s.14A is concerned, admittedly, the ld. CIT(A) has restricted the disallowance to the exempt of income which issue now is covered by the following decisions of the Hon’ble Jurisdictional High Court:-  429 ITR 319 (Bom) Pr. CIT v Ajit Ramakant Phatarpekar  421 ITR 125 (Bom) PV HSBC Invest Direct (India) Ltd 27. Thus, on this issue also, the grounds raised by the Revenue for A.Y.2013-14 to 2016-17 are dismissed. 27. In the result, all the appeals of the Revenue are dismissed. Order pronounced on 27th April, 2023 (PADMAVATHY S) JUDICIAL MEMBER Mumbai; Dated 27/04/2023 KARUNA, sr.ps 21 ITA Nos. 2952-2957/Mum/…

Shree Garuda Plant Products Ltd, Nashik vs. Income-Tax Officer, Ward - 1 (2), Nashik

ITA 492/PUN/2019[2015-16]Status: DisposedITAT Pune14 Oct 2022AY 2015-16

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita No.492/Pun/2019 िनधा"रण वष" / Assessment Year : 2015-16 Shree Garuda Plant Products The Income Tax Officer, Ltd., Vs Ward-1(2), Nashik. B-26, Additional Midc Area, Ambad, Nashik. Pan: Aaacg 0563 H Appellant/ Assessee Respondent / Revenue Assessee By Shri Nishint Gandhi – Ar Revenue By Shri M.G.Jasnani – Dr Date Of Hearing 20/07/2022 Date Of Pronouncement 14/10/2022 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Is Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeals)-1, Nashik For The Assessment Year 2015-16, Dated 19.02.2019, Emanating Out Of Order Under Section 143(3) Of The Income Tax Act, 1961 Dated 26.12.2017. The Assessee Has Raised The Following Grounds Of Appeal: “1.In The Facts & Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) - 1, Nashik ["The Cit (A)" For Short] Erred In Confirming The Order Of The Learned Income Tax Officer - 1 (2), Nashik, ["The Ao" For Short] Which Was Passed In Violation Of Principles Of Natural Justice Without Affording A Proper Opportunity Of Being Heard To The Appellant. 2. In The Facts & Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Confirming The Action Of The Ao In Invoking Section 14A R.W.R. 8D Of The Act, Whereby A Disallowance Of Rs.12,81,831/- Was Made In The Hands Of The Appellant.

Section 115JSection 143(3)Section 14ASection 2Section 2(22)(e)

…and therefore, the provision of section 14A do not prohibit disallowance of expenditure in relation to exempt loss incurred by the assessee, is neither here nor there. The Hon'ble jurisdictional High Court in Pr. CIT v. HSBC Invest Direct (India) Ltd. [2020] 421 ITR 125 (Bom.) has held 'that disallowance cannot exceed the exempt income so earned by the assessee during the year under consideration.' If the disallowance is to be restricted to the amount of exempt income, the sequitur is that there can never be any disallowance u/s 14A in the absence of positive exempt income for the year. Insofar as section 14A is…

Dy.C.I;.T.Central Cir6 (3), Mumbai vs. M/S. Reynold Shirting Ltd, Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 2388/MUM/2021[2017-18]Status: DisposedITAT Mumbai03 Aug 2022AY 2017-18

Bench: Shri Pavan Kumar Gadale & Shri Amarjit Singhdcit, Cc – 6(3) Vs. Reynold Shirting Ltd Room No. 1926, 19Th 402, 4Th Floor, Kamla Floor, Air India Bldg, Hub Ns Road No.1 Nariman Point, Juhu Scheme, Vile Mumbai-400021. Parle (W), Mumbai -400049. Pan/Gir No. : Aaccr7055H Appellant .. Respondent Appellant By : Ms.Mahita Nair.Dr Respondent By : Ms.Mitalli Gopani.Ar Date Of Hearing 03.08.2022 Date Of Pronouncement 08.08.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Revenue Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals) – 54, Mumbai Passed U/S 143(3) & 250. The Revenue Has Raised The Following Revised Grounds Of Appeal:

For Appellant: Ms.Mahita Nair.DRFor Respondent: Ms.Mitalli Gopani.AR
Section 115JSection 143(2)Section 143(3)Section 14A

…herefore, the disallowance u/s 14A r.w.r 8D has to be restricted to the dividend earned during the year of Rs.57,500/-. For this the appellant has relied on the judicial precedents in the case of Bombay High Court in the case of HSBC Invest Direct India Ltd. (421 ITR 125), Delhi High Court in the case of Joint Investments P. Ltd. (372 ITR 295), Punjab & Haryana High Court in the case of Pr.CIT vs. Empire Package Pvt. Ltd. (286 CTR 457), the Hon'ble Supreme Court in the case of Maxopp Investment Ltd. vs. CIT (402 ITR 640). It is also submitted that total Investments as at 31/3/2013 Rs.251,44,04,281/- (P.Y. Rs.252…

ACIT Cent. Cir 5(40, Mumbai vs. M/S. Wadhwa Group Holdings Pvt. Ltd, Mumbai

ITA 148/MUM/2022[2017-18]Status: DisposedITAT Mumbai29 Jul 2022AY 2017-18

Bench: Shri Kuldip Singh & Shri S. Rifaur Rahmanassessment Year: 2017-18 The Asstt. Commissioner M/S. Wadhwa Group Of Income Tax, Holdings Pvt. Ltd., Central Circle – 5(4), 301 Platina, Room No.1927, 19Th Floor, Plot C-59, Vs. Air India Building, G Block, Nariman Point, Bandra Kurla Complex, Mumbai - 400021 Bandra (E), Mumbai – 400 098 Pan: Aaccv3961G (Appellant) (Respondent)

For Appellant: Shri Mahesh O. Rajora, A.RFor Respondent: Shri Kishor Dhule, D.R
Section 143(3)Section 14A

…come. The disallowance under section 14A was to be limited to the extent of the dividend income earned by the assessee which was exempt from tax.” Similar view was taken by the Hon'ble Bombay High Court in the case of PCIT Vs. HSBC Invest Direct (India) Ltd [421 ITR 125] wherein the Hon'ble Bombay High Court directed to restrict the disallowance u/s 14A r.w.r. 8D to exempt income earned by the assessee during the year. To support this claim, the appellant has also relied upon the decision in the case of M/s. Daga Global Chemicals Pvt. Ltd. Vs ACIT [46 ITR(Trib) 70](Mumbai, Joint Investment Private Limited [372…

Dy CIT. CC- 1(4), Mumbai vs. M/S. D.B. Realty Ltd., Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

ITA 90/MUM/2021[2017-18]Status: DisposedITAT Mumbai21 Apr 2022AY 2017-18
For Appellant: Ms. Pooja RenderFor Respondent: Shri Sanjeev Kashyap (DR)
Section 143(1)Section 143(2)Section 14A

…t income in the relevant assessment year. The CIT(A) has placed reliance upon the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT 6 A.Y.2017-18 (ITA. No. 749/2014) dated 02.09.2015 and CIT Vs. HSBC Invest Direct (India) (2020) 421 ITR 125 (Bom) and PCIT Vs. IL & FS Energy Development Co Ltd. ITA. No.520/2017 and Maxopp Investment Ltd. Vs. CIT 402 ITR 640 (SC) and other judgments which have been mentioned above. The facts are not distinguishable at this stage. The CIT(A) has rightly deleted the addition by relying upon the above mentioned decisions. No law contrary to the law relie…

M/S Ind Synergy Limited, Raipur (Cg) vs. The Dy. Commissioner of Income Tax 1(2), Raipur (Cg)

In the result, appeal of the assessee is allowed in terms of our aforesaid observations

ITA 312/BIL/2016[2011-12]Status: DisposedITAT Raipur30 Mar 2022AY 2011-12

Bench: Shri Ravish Sood & Shri Jamlappa D Battullआयकर अपील सं. / Ita No. 312/Rpr/2016 "नधा"रण वष" / Assessment Year : 2011-12 M/S. Ind Synergy Limited Gokul Puram, Kachna Road, Khamardih, Raipur (C.G.) Pan : Aaaci7072D .......अपीलाथ" / Appellant बनाम / V/S. The Deputy Commissioner Of Income Tax-1(2), Raipur (C.G.) ……""यथ" / Respondent Assessee By : Shri Abhishek Mahawar, Ar Revenue By : Shri Shravankumar Meena, Dr

For Appellant: Shri Abhishek Mahawar, ARFor Respondent: Shri Shravankumar Meena, DR
Section 143(3)Section 14ASection 2(24)(x)Section 3Section 36(1)(va)

…. CIT (2015) 378 ITR 33 ( Delhi) (ii) Pr. CIT Vs. Karnataka State Financial Corporation Ltd. (2021) 127 taxmann.com 115 ( Karnataka) (iii) Pr. CIT Vs. Kohinoor Project (P) Ltd. (2020) 425 ITR 700 ( Bom.) (iv) Pr. CIT Vs. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Bom.) 8. Backed by our aforesaid observations, we are unable to persuade ourselves to subscribe to the disallowance worked out by the Assessing Officer u/s.14A of the Act, i.e, de-hors any exempt dividend income having been earned by the assessee during the year under consideration. We, thus, direct the Assessing Officer to vacate the disallowa…

Dy CIT, Circle-7(1)(1), Mumbai vs. M/S. Mep Infrastructure Developers Ltd., Mumbai

In the result, appeal of the Revenue is dismissed

ITA 512/MUM/2021[2017-18]Status: DisposedITAT Mumbai26 Nov 2021AY 2017-18

Bench: Mrs. Diva Singh & Shri Rifaur Rahmandy.Cit, Circle-7(1)(1), Room No. 126, 1St Floor, Aayakar Bhavan, M.K. Road, Mumbai-400020 ............ Appellant Vs. M/S. Mep Infrastructure Developers Ltd. 410, Boomerang, Chandivali Farm Road, Andheri East, Mumbai-400072. Pan: Aadcm3650J ............ Respondent Appellant By : Sh. Kishore Dhule, Sr. Dr Respondent By : Ms. Tejal Saraf (Ar) Date Of Hearing : 24/11/2021 Date Of Pronouncement : 26/11/2021 Hearing Via Webex Order Per Diva Singh, J.M: In The Facts Of The Present Case, It Is Seen That The Assessee-Company Is Engaged In The Business Of Toll Collection As Per The Contract Entered With Various Authorities & Also In Providing Road, Repair & Maintenance Service To Its Subsidiaries Companies. 2. For The Purposes Of Addressing The Issues Necessitating Adjudication, It Is Necessary To First Address The Fact That The Present Appeal Has Been Filed By The Revenue, Wherein The Correctness Of The Order Dated 27.01.2021 Passed

For Appellant: Sh. Kishore Dhule, Sr. DRFor Respondent: Ms. Tejal Saraf (AR)
Section 14ASection 80I

…n be made, however, taking note of the decisions of the Hon’ble Karnataka High Court in the case of Pragati Krishna Gramin bank Vs. JCIT (2018) 256 Taxman 349 (Kar) (HC), the Hon’ble Bombay High Court in the cases of Pr.CIT Vs. HSBC Invest Direct (India) Ltd. 421 ITR 125 (Bom) and Nirved Traders (P) Ltd. (2020) 421 ITR 142 and of the Hon’ble Gujarat High Court in the case of CIT Vs. Corrtech Energy (P.) Ltd. he restricted the disallowance to Rs. 1,68,580/-. 9. Aggrieved by this the Revenue is in appeal before the ITAT. 10. We have heard the rival submissions and perused the material on record. On a consideration…

Dy CIT CC-1(4), Mumbai vs. M/S. Marine Drive Hospitality & Realty P. Ltd., Mumbai

In the result both the appeals filed by the revenue are dismissed

ITA 70/MUM/2021[2013-14]Status: DisposedITAT Mumbai03 Nov 2021AY 2013-14

Bench: Shri M Balaganesh & Shri Pavan Kumar Gadale & Dcit, Cc – 1(4), Vs. M/S. Marine Drive 9Th Floor, 902, Pratishta Hospitality & Reality Bhavan, Old Cgo Bldg Pvt Ltd., (Annexe), Mk Road, Ground Floor, Db Mumbai – 400 020. House, Gen. Ak Vaidya Marg, Goregaon (E), Mumbai – 400 063. Pan/Gir No. : Aaccn1891R Appellant .. Respondent

For Appellant: Shri. Suresh Parisamy. DRFor Respondent: Ms. Hema Kataria. AR
Section 143(1)Section 143(2)Section 143(3)Section 14A

…was not justified in ITA No. 70 & 71/Mum/2021 M/s Marine Drive Hospitality & Realty Pvt Ltd, Mumbai invoking the provisions of Rule 8D and computing the disallowance of Rs.4,30,00,254/- u/s.14A. 4.4 In the case of CIT v. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Born) , dismissing the appeal of the revenue the Hon'ble Bombay High court held that the disallowance of expenditure incurred to earn the exempt income could not exceed the exempt income earned. It was further held that the ratio of the decisions in the cases of Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (Delhi) (HC)) and CIT v. Holcim India (P) L…

Kopergaon Peoples Co-Op Bank Ltd, Ahmednagar vs. Assistant Commissioner of Income-Tax, Ahmednagar Circle, Ahmednagar

In the result, the appeal is partly allowed

ITA 405/PUN/2018[2013-14]Status: DisposedITAT Pune31 Aug 2021AY 2013-14

Bench: Shri R.S. Syal & Shri S.S. Viswanethra Raviआयकर अपील सं. / Ita No.405/Pun/2018 िनधा"रण वष" / Assessment Year : 2013-14 Kopergaon Peoples Cop. Bank Ltd., Vs. Acit, Bank Road, Kopergaon, Ahmednagar Circle, Ahmednagar – 423601 Ahmednagar Pan : Aaaak2255J Appellant Respondent

Section 14ASection 244A

…4A of the Act. Similar view has been taken by the Hon'ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. Taking this proposition further, the Hon’ble jurisdictional High Court in Pr. CIT VS. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Bom) has held that disallowance u/s 14A cannot exceed the amount of exempt income. Considering the ratio laid down in the case of HSBC Invest Direct (India) Ltd. (supra), we order to sustain the disallowance at Rs.80,837/-. 5. The second ground is against the confirmation of addition of interest u/s.244A of the Act amounting to Rs.3,30,210/-.…

Kumar Properties and Real Estate Private Limited, Pune vs. Deputy Commissioner of Income-Tax, Circle - 14, Pune

In the result, the appeal is partly allowed

ITA 2977/PUN/2017[2013-14]Status: DisposedITAT Pune28 Apr 2021AY 2013-14

Bench: Shri R.S. Syal & Shri S.S.Viswanethra Raviआयकर अपील सं. / Ita No.2977/Pun/2017 िनधा"रण वष" / Assessment Year 2013-14 Kumar Properties & Real Estate Vs. Dcit, Circle-14, Private Limited, Pune Ist Floor, Kumar Capital, East Street, Camp, Pune – 411 001 Pan : Aaack7490H Appellant Respondent Assessee By Shri Rajan Vora & Shri Rajendra Agiwal Revenue By Shri Vitthal Bhosale Date Of Hearing 27.04.2021 Date Of Pronouncement 28-04.2021 आदेश / Order Per R.S. Syal, Vp : This Appeal By The Assessee Is Directed Against The Order Passed By The Cit(A)-7, Pune On 01.09.2017 In Relation To The Assessment Year 2013-14. 2. The Assessee Has Assailed Confirmation Of Addition Of Rs.1,47,65,688/- Towards Deemed Rental Income On Stock-In-Trade Of Unsold Flats/Bungalows Held By The Assessee, As A First Major Issue. Succinctly, The Factual Panorama Of The Case Is That The Assessee Has Been Engaged In The Business Of Development Of Properties With The Projects `Kumar Infinia’ & `Kumar Picasso’

Section 2Section 22Section 23Section 27

…and therefore, the provision of section 14A do not prohibit disallowance of expenditure in relation to exempt loss incurred by the assessee, is neither here nor there. The Hon’ble jurisdictional High Court in Pr. CIT VS. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Bom) has held `that disallowance cannot exceed the 14 Kumar Properties and Real Estate Private Limited exempt income so earned by the assessee during the year under consideration.’ If the disallowance is to be restricted to the amount of exempt income, the sequitur is that there can never be any disallowance u/s 14A in the absence of positive ex…

Suma Shilp Ltd, Pune vs. Deputy Commissioner of Income-Tax, Circle - 6, Pune

In the result, the appeal is allowed

ITA 1681/PUN/2017[2012-13]Status: DisposedITAT Pune03 Jul 2020AY 2012-13

Bench: Shri R.S. Syal & Shri Partha Sarathi Chaudhuryिनधा"रण वष" / Assessment Year : 2012-13

Section 14A

…4A of the Act. Similar view has been taken by the Hon'ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. Taking this proposition further, the Hon’ble jurisdictional High Court in Pr. CIT VS. HSBC Invest Direct (India) Ltd. (2020) 421 ITR 125 (Bom) has held that disallowance u/s 14A cannot exceed the amount of exempt income. Adverting to the facts of the instant case, it is seen that the amount of suo motu disallowance offered by the assessee (Rs.3.00 lac) is greater than the amount of exempt income (Rs. 1.83 lac). That being the position, there can be no question of any further di…