“disallowance under section 14A”

DisallowancesSection 14ASection 14A2,288 judgments

The decision most relied on for disallowance under section 14A is CIT v. Reliance Petroproducts Pvt. Ltd. (322 ITR 158), cited in 2,228 judgments on BharatTax.

Leading authorities on disallowance under section 14A

CIT v. Reliance Petroproducts Pvt. Ltd.

322 ITR 158 · 2010 · Supreme Court

2,228

citing judgments

Penalty under Section 271(1)(c) for furnishing inaccurate particulars or concealment of income is not automatically leviable if the assessee has made a full disclosure of all particulars and the addition or disallowance arises from a difference of opinion.

CIT v. Reliance Utilities & Power Ltd.

313 ITR 340 · 2009 · High Court

2,118

citing judgments

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

Maxopp Investment Ltd. v. CIT

402 ITR 640 · 2018 · Supreme Court

1,596

citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Cheminvest Ltd. v. CIT

378 ITR 33 · 2015 · High Court

1,569

citing judgments

A disallowance under Section 14A of the Income-tax Act, 1961, for expenditure incurred in relation to exempt income cannot be made if the assessee has not earned any exempt income during the relevant previous year.

S.A. Builders Ltd. v. CIT

288 ITR 1 · 2007 · Supreme Court

1,484

citing judgments

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

CIT v. HDFC Bank Ltd.

366 ITR 505 · 2014 · High Court

1,261

citing judgments

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT

328 ITR 81 · 2010 · High Court

1,183

citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

ACIT v. Vireet Investment Pvt. Ltd.

165 ITD 27 · 2017 · ITAT

882

citing judgments

No disallowance under section 14A can be made while computing book profits under section 115JB unless the expenditure is debited to the profit and loss account and satisfies clause (f) of Explanation 1 to section 115JB(2).

Judgments citing disallowance under section 14A

Hdfc Bank Limited (As Successor to Housing Development Finance Corporation Ltd), Mumbai vs. DCIT RG 1(1), Mumbai

ITA 4313/MUM/2010[2002-03]Status: DisposedITAT Mumbai28 Jan 2025AY 2002-03

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and Shri Ninad Patade, CAFor Respondent: Shri Biswanath Das, CIT DR

Section 1

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I.13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I.15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case of State

Hdfc Bank Limited (As Successor to Housing Development Finance Corporation Ltd), Mumbai vs. Addl CIT RG 1(1), Mumbai

ITA 3862/MUM/2009[2005-06]Status: DisposedITAT Mumbai28 Jan 2025AY 2005-06

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Adv

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I. 13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I. 15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case

Addl CIT RG 1(1), Mumbai vs. Hdfc Ltd, Mumbai

ITA 3788/MUM/2009[2005-06]Status: DisposedITAT Mumbai28 Jan 2025AY 2005-06

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I. 13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I. 15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case

Addl CIT RG 1(1), Mumbai vs. Hdfc Ltd, Mumbai

ITA 3785/MUM/2009[2004-05]Status: DisposedITAT Mumbai28 Jan 2025AY 2004-05

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and Shri Ninad Patade, CAFor Respondent: Shri Biswanath Das, CIT DR

Section 1

Hdfc Bank Limited (As Successor to Housing Development Finance Corporation Ltd), Mumbai vs. The Addl CIT RG 1(1), Mumbai

ITA 4315/MUM/2007[2002-2003]Status: DisposedITAT Mumbai28 Jan 2025AY 2002-2003

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I. 13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I. 15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case

DCIT Cir 1(1), Mumbai vs. M/S Housing Developement Finance Corporation Ltd, Mumbai

ITA 4162/MUM/2007[2003-2004]Status: DisposedITAT Mumbai28 Jan 2025AY 2003-2004

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocat

Section 1

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I. 13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I. 15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case

DCIT Cir 1(1), Mumbai vs. M/S Housing Developement Finance Corporation Ltd, Mumbai

In the result, appeals of both, assessee and revenue are decided

ITA 4161/MUM/2007[2002-2003]Status: DisposedITAT Mumbai28 Jan 2025AY 2002-2003

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and

Section 1

while computing disallowance under section 144 of the Act. Accordingly, the Corporation has excluded interest amounting to Rs 4,137.74 crore while computing disallowance under section 14A of the Act. I. 13. It is submitted that the balance interest expenditure amounting to Rs 1,005.13 is towards public deposits ... yield tax free interest or taxable income, however, since investments in such securities are mandatory, the same needs to be excluded while computing disallowance under section 14A of the Act. I. 15. In this regard we place reliance on the judgement of Hon'ble Cochin Tribunal in the case

Ankur Goyal, Ghaziabad vs. ITO, Ward 1(1), Ghaziabad

In the result, the appeal of the assessee is allowed

ITA 2524/DEL/2023[2012-13]Status: DisposedITAT Delhi24 Jan 2025AY 2012-13

Bench: Shri Challa Nagendra Prasad & Shri Avdhesh Kumar Mishra

Section 142(1)Section 143(3)Section 147Section 14ASection 263

Officer (AO) to pass assessment 2 Micromax Informatics Ltd. order afresh after examining the issues of taxability of interest income on FDRs and disallowance under section 14A of the Act. 4. At the outset, the Ld. Authorized Representative (AR) submitted that the AO, in pursuance of the impugned order passed ... Rs.16,18,16,439/- on FDRs was not justified. 3 Micromax Informatics Ltd. 5. The second issue is in respect of the disallowance under section 14A of the Act. The Ld. AR, drawing our attention to the question No. 09 to the notice issued under section

M/S Jsw Infrastruture Limited, Mumbai vs. DCIT Circle-5(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 6015/MUM/2024[2018-19]Status: DisposedITAT Mumbai23 Jan 2025AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2018-19 M/S Jsw Infrastructure Ltd., Dy. Cit, Circle 5(2)(1), Jsw Centre Bandra Kurla Complex, Aayakar Bhavan, Maharishi Karve Bandra (East), Vs. Road, New Marine Lines, Churchgate, Mumbai-400051. Mumbai-400020. Pan No. Aabcj 6721 D Appellant Respondent

For Appellant: Ms. Vinita NaraFor Respondent: 02/01/2025

Section 14ASection 14A(2)

whether principal issue for determination in the present matter is whether principal issue for determination in the present matter is whether a disallowance under Section 14A Act can be made a disallowance under Section 14A Act can be made even even when the assessee has not earned any exempt income ... taxmann.com taxmann.com taxmann.com 13 13 13 (Bombay), (Bombay), (Bombay), categorically categorically categorically held held held that that that no no no disallowance under Section 14A can be made in the absence of er Section 14A can be made in the absence of er Section 14A can be made

Lycos Internet Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-16(1), Hyderabad

ITA 1769/HYD/2018[2012-13]Status: DisposedITAT Hyderabad22 Jan 2025AY 2012-13

Bench: Shri Vijay Pal Rao, Vice- & Shri Madhusudan Sawdia

For Appellant: Shri P Murali Mohan Rao, СА

Section 14ASection 249(4)(a)Section 263Section 36(1)(va)

income alone can be disallowed. In the case before us, when the assessee has not earned any exempt income, there can be no disallowance under section 14A of the Act. The Hon'ble Delhi High Court in the case of Cheminvest Ltd., reported

Maithan Alloys Ltd, Kolkata vs. DCIT, Cir. 1(1), Kolkata

In the result, the appeals of the assessee are partly allowed

ITA 543/KOL/2024[2011-12]Status: DisposedITAT Kolkata21 Jan 2025AY 2011-12

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Sidhhrath Kejriwal, ARFor Respondent: Shri Abhishek Kumar, DR

Section 143(3)Section 14ASection 36(1)(iii)

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM

DCIT 3(2)(1), Mumbai vs. M/S. Jindal Drugs Pvt. Ltd., Mumbai

In the result,appeal of the Revenue in ITA

ITA 5915/MUM/2024[2013-14]Status: DisposedITAT Mumbai21 Jan 2025AY 2013-14

Bench: Shri Sandeep Gosain & Shri Prabhash Shankardeputy Commissioner Of V/S. M/S Jindal Drugs Pvt. Ltd., Income Tax बनाम 12Th Floor, 3(2)(1),Aayakarbhawan, Bakhtawarramnathgoenka Room No. 608 Mumbai – Marg, Nariman Point Mumbai - 400020, Maharashtra 400 021, Maharashtra स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaacj1000A Appellant/अपीलार्थी .. Respondent/प्रतिवादी M/S Jindal Drugs Pvt. Ltd., V/S. Assistant Commissioner 12Th Floor, बनाम Of Income Tax 3(2)(1), Bakhtawarramnathgoenka Marg, Aayakarbhawan, Room No. 229Nariman Point Mumbai - 400 608 Mumbai – 400 020, 021, Maharashtra Maharashtra स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaacj1000A Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Rahul Hakkani,ARFor Respondent: Shri Sunil Mathews (Sr. DR)

Section 143(3)Section 14ASection 8D(2)(ii)

that the sole purpose of theinvestments made by the appellant was to earn exempt income. The AO also noted that the working of disallowance under section 14A r.w. Rule 8D given by the appellant was not correct. Thus, applying the Rule 8D, the AO computed the totaldisallowance under section 14A ... submissions of the appellant, and keeping in mind thecase laws relied upon by the appellant, it was observed that while making the disallowance under section 14A r.w. Rule 8D, the AO did examine the accountsof the appellant, and found that the investments made by the appellant were onlytowards earning

ACIT-3(4), Mumbai vs. Union Bank of India ( Erstwhile Corporation Bank), Mumbai

In the result both the appeals filed by the revenue are partly allowed

ITA 1228/MUM/2024[2020-21]Status: DisposedITAT Mumbai20 Jan 2025AY 2020-21

Bench: Shri.B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Ananthan S / Ms. LalithaFor Respondent: ShriAshish Heliwal, CIT DR

Section 115JSection 143(3)Section 14ASection 250Section 251(1)(a)Section 36Section 36(1)(iii)Section 36(1)(vii)Section 36(1)(viia)

recognized by the Hon’ble Karnataka High Court. Accordingly, the revenue’s grounds of appeal, Ground Nos. (i) to (iii) are dismissed. 7. Disallowance under section 14A 7.1 The Ld. AO made an addition of Rs. 4,27,73,538/- on the ground that the assessee had not allocated expenses ... assessee can demonstrate that investments yielding exempt income were made out of their own funds and not from borrowed funds, no disallowance under Section 14A of the Act is warranted. Further, in the case of Punjab National Bank (449 ITR 468, Del), the Hon’ble Delhi High Court ruled that

Super Lifestyle Diamonds Pvt.Ltd, Mohali vs. Pr.CIT-1, Chandigarh

The appeal of the assessee is allowed

ITA 181/CHANDI/2021[2015-16]Status: DisposedITAT Chandigarh17 Jan 2025AY 2015-16

Bench: Shri Rajpal Yadav & Shri Krinwant Sahay

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Kusum Bansal, CIT, DR

Section 139(1)Section 143(3)Section 14ASection 263

current loss of Rs.61,50,658/-. The AO has passed an assessment order under Section 143(3) on 29.08.2017. He made a disallowance under Section 14A amounting to Rs.3,37,534/- and an addition of Rs.2,22,347/-. In this way, he A.Y.2015-16 3 determined losses to be carried forward

M/S Niwas Residential & Commercial Properties Pvt Ltd, Mumbai vs. Principle Commissioner of Income Tax-8, Mumbai

ITA 2114/MUM/2024[2018-19]Status: DisposedITAT Mumbai17 Jan 2025AY 2018-19

Bench: Shri B.R. Baskaran & Shri Raj Kumar Chauhan

Section 14ASection 263

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “B” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR

Deputy Commissioner of Income Tax, Circle 4(2), Delhi, I.P.Estate vs. Bureau Veritas Consumer Products Services(India) Pvt. Ltd., Lajpat Nagar

ITA 3158/DEL/2023[2017-18]Status: DisposedITAT Delhi14 Jan 2025AY 2017-18

Bench: Ms. Madhumita Roy & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2013-14] The Assistant Commissioner Of M/S Dalmia Cement Bharat Ltd. Income Tax, Circle-1, Dalmiapuram, Williams Road, Vs Tamilnadu, 621651 Cantonment, Trichy, Tamil Nadu-620001 Pan-Aadca9414C Assessee Revenue Cross Objection No.63/Chny/2018 (Arising Out Of Ita No.3157/Chny2017) [Assessment Year: 2013-14] M/S Dalmia Cement Bharat Ltd. The Assistant Commissioner Of Dalmiapuram, Income Tax, Circle-1, Tamilnadu-621651 Vs Williams Road, Cantonment, Trichy, Tamil Nadu-620001 Pan- Aadca9414C Assessee Revenue [Assessment Year: 2014-15] The Assistant Commissioner Of M/S Dalmia Cement Bharat Ltd. Income Tax, Circle-1, Dalmiapuram, Williams Road, Vs Tamilnadu, 621651 Cantonment, Trichy, Tamil Nadu-620001 Pan-Aadca9414C Assessee Revenue

Section 14ASection 32(1)(iia)

made out in favour of the assessee. We have also noted that judicial precedents relied upon also support the view that no disallowance under section 14A read with Rule-8D(ii) is permissible in cases where the assessee had surplus own funds. Accordingly, we are of the considered view that

Sapphire Foods India Limited, Mumbai vs. DCIT, Circle 3(3)(1), Mumbai

In the result the appeal filed by the assessee stands dismissed

ITA 3579/MUM/2024[AY 2022-23]Status: DisposedITAT Mumbai13 Jan 2025

Bench: Smt. Beena Pillai, Jm

Section 143(2)Section 14ASection 250

towards the investment. It was also contended that, most importantly no dividend income was earned during the year under consideration and therefore no disallowance under section 14A r.w. Rule 8D could be made. The assessee placed reliance on following decision to support its contention that no expenditure could be attributable ... also relied on decision of this Tribunal in assessee’s own case for assessment A 2006-07 and 2007-08 wherein the disallowance under section 14A was deleted relying on the decision of Hon’ble Bombay High Court in case of Reliance Utilities and Power Ltd (supra). 2.4 The Ld.AO

Khosla Machines Pvt. Ltd., Chandigarh vs. Income Tax Officer, Ward 1(4), Chandigarh

In the result, the appeal of the assessee is allowed

ITA 696/CHANDI/2024[2017-18]Status: DisposedITAT Chandigarh09 Jan 2025AY 2017-18

Bench: Us.

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Dr. Ranjeet Kaur, Sr. DR

Section 14A

assessee has claimed exempt income of Rs. 30,41,259/- against investment of Rs. 322,62,709/- in Mutual Funds and no disallowance under Section 14A has been made by the Assessee in its return of income and the assessee’s explanation was sought. In response, the assessee submitted that

Dinesh Bhoja Shetty, Mumbai vs. DCIT, Circle 41(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3506/MUM/2024[2012-13]Status: DisposedITAT Mumbai08 Jan 2025AY 2012-13

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2018-19 Dice Districts (India) Pvt. Ltd., Ito Ward 6(2)(1), 307-308, Midas, Sahar Plaza, Aayakar Bhavan, Vs. Andheri East, Mumbai-400020. Mumbai-400069. Pan No. Aaecd 2751 N Appellant Respondent

For Appellant: Mr. Pravin Salunkhe, Sr. DRFor Respondent: Mr. Dharan Gandhi

Section 14ASection 234B

private limited companies. However, no equity shares of various private limited companies. However, no equity shares of various private limited companies. However, no disallowance under Section 14A of the Act was made by the owance under Section 14A of the Act was made by the owance under Section 14A ... considered view that for the assessment year under consideration— —which admittedly precedes A.Y. 2023 which admittedly precedes A.Y. 2023–24—no disallowance under Section 14A of the Act is warranted in the disallowance under Section 14A of the Act is warranted in the disallowance under Section 14A

Agrasen Engineering Industries Private Limited, Jaipur vs. National E-Assessment Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 1085/JPR/2024[2018-19]Status: DisposedITAT Jaipur08 Jan 2025AY 2018-19

Bench: Him.

For Appellant: Sh. Vijay Goyal, CAFor Respondent: Mrs. Anita Rinesh, JCIT-Sr. DR

Section 111ASection 115JSection 142(1)Section 143(2)Section 143(3)Section 14A

14A are not automatic a) Before making disallowance u/s 14A of the Act the ld. A.O. needs to record satisfaction that suo-moto disallowance under Section 14A was not correct. The Ld. CIT (A) wrongly held that the Ld. A.O. has recorded the satisfaction. However, from the assessment order ... ground raised by the Revenue is dismissed.” v) In CIT v Hero Cycles Limited [323 ITR 518] the hon’ble court held that disallowance under section 14A was not permissible where there was no nexus between the expenditure incurred and the income generated. (vi) Hon’ble High Court of Gujarat