“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

M/S. Topgrain Corporate Service Pvt. Ltd., Kolkata vs. I.T.O., Ward - 4(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 2276/KOL/2025[2017-2018]Status: DisposedITAT Kolkata05 Feb 2026AY 2017-2018

Bench: Shri Rajesh Kumar (Accountant Member), Shri Pradip Kumar Choubey (Judicial Member)

Section 10Section 10(34)Section 10(38)Section 11Section 115JSection 12Section 14Section 14ASection 234BSection 234C

Bench decision in Vireet Investment (supra) wherein it was held that section 14A disallowance cannot be added to Book Profit u/s 115JB and disallowance under Section 14A could not be added back while computing book profits under Section 115JB. We have also considered the decision of Jurisdictional ITAT Kolkata Bench

Acitltu-2, Chennai vs. Ashok Leyland Limited, Chennai

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

ITA 945/CHNY/2018[2009-10]Status: DisposedITAT Chennai05 Feb 2026AY 2009-10

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.895/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 Ashok Leyland Limited, Vs. The Deputy Commissioner Of 1, Sardar Patel Road, Guindy, Income Tax, Chennai 600 032. Company Circle – Ltu, Chennai. [Pan: Aaaca4651L] (अपीलाथ"/Appellant) (""थ"/Respondent) आयकर अपील सं./I.T.A. No.945/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 The Assistant Commissioner Of Vs. Ashok Leyland Limited, Income Tax, 1, Sardar Patel Road, Guindy, Large Taxpayer Unit – 2, Chennai. Chennai 600 032. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Assessee By : Shri Vikram Vijayaraghavan, Advocate (Virtual) ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Cit सुनवाई की तारीख/ Date Of Hearing : 10.11.2025 घोषणा की तारीख /Date Of Pronouncement : 05.02.2026 आदेश /O R D E R Per S.S. Viswanethra Ravi: Both The Cross Appeals Filed By The Assessee & The Revenue Are Directed Against The Order Dated 28.12.2017 Passed By The Ld.

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri AR V Sreenivasan, CIT

assessee in challenging the action of the ld. CIT(A) in confirming the order of the Assessing Officer on account of disallowance under section 14A r.w. Rule 8D. 26. Having heard both the parties, at the outset, we note that the Assessing Officer discussed the said issue in para ... assessment order and made disallowance under section 14A r.w. Rule 8D considering the disallowance already made by the assessee. Having aggrieved, an appeal preferred by the assessee before the ld. CIT(A), wherein, the ld. CIT(A) confirmed the addition made by the Assessing Officer in making the disallowance under

Ashok Leyland Limited, Chennai vs. DCIT Company Circle 1 (1), Chennai

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

ITA 895/CHNY/2018[2009-10]Status: DisposedITAT Chennai05 Feb 2026AY 2009-10

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri AR V Sreenivasan, CIT

DCIT Circle 2.3.1, Mumbai, Mumba vs. Trent Limited, Mumbai

The appeals of the Revenue are dismissed

ITA 5245/MUM/2025[2020-21]Status: DisposedITAT Mumbai05 Feb 2026AY 2020-21

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokar

Section 143(3)Section 144BSection 14ASection 250

made investments which yielded exempt income in the form of dividend. In the respective returns of income, the assessee had suo motu made disallowance under section 14A of the Income-tax Act, 1961[hereinafter referred to as “the Act”] on account of expenditure allegedly attributable to earning of exempt income ... passed under section 143(3) read with section 144B Exempt income Rs. 1,00,73,900/- Rs. 14,65,60,351/- Suo motu disallowance under section 14A by assessee Rs. 4,75,774/- Rs. 35,32,482/- Disallowance computed by AO under section 14A

DCIT, Mumbai vs. Trent Limited, Mumbai

The appeals of the Revenue are dismissed

ITA 5244/MUM/2025[2018-19]Status: DisposedITAT Mumbai05 Feb 2026AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokar & Dcit Trent Limited, 552, 5Th Floor, Aayakar G-Block, Plot No. C Bhavan, M. K. Road, Vs. 60 Trent House, Mumbai-400 020 Beside City Bank Bandra K Complex, Bandra (E), Mumbai-400 051 Pan/Gir No. Aaacl1838J (Applicant) (Respondent) Revenue By Shri Ritesh Misra, Ld. Dr Assessee By Shri Nikhil Tiwari, Ld. Ar Date Of Hearing 28.01.2026 Date Of Pronouncement 05.02.2026

Section 143(3)Section 144BSection 14ASection 250

made investments which yielded exempt income in the form of dividend. In the respective returns of income, the assessee had suo motu made disallowance under section 14A of the Income-tax Act, 1961[hereinafter referred to as “the Act”] on account of expenditure allegedly attributable to earning of exempt income ... 144B Exempt income Rs. 1,00,73,900/- Rs. 14,65,60,351/- Suo motu Rs. 4,75,774/- Rs. 35,32,482/- disallowance under section 14A by assessee Disallowance Rs. 11,46,63,480/- Rs. 9,51,09,170/- computed by AO under section 14A Addition made

Ambuja Cements Limited, Mumbai vs. PCIT, Mumbai-3, Mumbai

ITA 3474/MUM/2025[2019-20]Status: DisposedITAT Mumbai05 Feb 2026AY 2019-20

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri Sourabh Soparkar, AR (virtually appear)For Respondent: Shri Rajesh Kumar Yadav, (CIT-DR)

Section 143(3)Section 14ASection 263

expert's report by the assessee does not absolve the AO from his statutory duty to independently determine the correct quantum of disallowance under Section 14A read with Rule 8D. The AO is required to form his own satisfaction, having regard to the accounts, and cannot mechanically rely ... 3474/Mum/2025 A.Y. 2019-20 Ambuja Cements Limited, Mumbai investment was decided in favour of the Revenue for the purposes of computation of disallowance under section 14A r.w. Rule 8D.We are of the considered opinion that it was incumbent on the AO to examine a third party report especially

ACIT., Circle-5(1), Hyderabad vs. Engenrin Hydro Power Limited, Hyderabad

In the result, all the four appeals filed by the Revenue are dismissed

ITA 831/HYD/2024[2018-19]Status: DisposedITAT Hyderabad04 Feb 2026AY 2018-19

Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 115JSection 14ASection 14A(3)

available on the statute before it is amendment vide the Finance Act, 2022 w.e.f 01/04/2022, in the absence of any exempt income no disallowance under section 14A of the Act could have been made in its hands. We find that the aforesaid issue is clearly covered by the judgment

ACIT., Circle-5(1), Hyderabad vs. Engenrin Hydro Power Limited, Hyderabad

In the result, all the four appeals filed by the Revenue are dismissed

ITA 830/HYD/2024[2018-19]Status: DisposedITAT Hyderabad04 Feb 2026AY 2018-19

Bench: SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 115JSection 14ASection 14A(3)

ACIT., Circle-5(1), Hyderabad vs. Engenrin Hydro Power Limited, Hyderabad

In the result, all the four appeals filed by the Revenue are dismissed

ITA 829/HYD/2024[2017-18]Status: DisposedITAT Hyderabad04 Feb 2026AY 2017-18

Bench: SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 115JSection 14ASection 14A(3)

ACIT., Circle-5(1), Hyderabad vs. Engenrin Hydro Power Limited, Hyderabad

In the result, all the four appeals filed by the Revenue are dismissed

ITA 828/HYD/2024[2016-17]Status: DisposedITAT Hyderabad04 Feb 2026AY 2016-17

Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 115JSection 14ASection 14A(3)

Tata Chemicals Ltd., Mumbai vs. Dy CIT 2 (3)(1), Mumbai

ITA 7912/MUM/2019[2015-16]Status: DisposedITAT Mumbai04 Feb 2026AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Appellant: Mr. Nitesh Joshi a/wFor Respondent: Mr. Ajay Chandra, CIT-DR

Section 14ASection 35Section 43BSection 80Section 91Section 92Section 92A(3)

prior to the insertion of Rule 8D of the Income-tax Rules, 1962, and during that period, the settled legal position was that disallowance under section 14A was to be made on a reasonable basis. The assessee’s method, having been accepted as reasonable in earlier years, ought ... applied mechanically and that a finding of actual incurrence of expenditure for earning exempt income is a sine qua non for making a disallowance under section 14A. Such satisfaction, it was urged, must be arrived at objectively, in good faith, and upon due consideration of the relevant facts and circumstances

Better Value Leasing & Finance Limited, Mumbai vs. Jurisdictional Assessing Officer, Circle 2(1)(1), Aayakar Bhawan, Mumbai

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

ITA 6082/MUM/2025[2017-18]Status: DisposedITAT Mumbai03 Feb 2026AY 2017-18

Bench: SHRI ANIKESH BANERJEE (Judicial Member), SHRI MAKARAND VASANT MAHADEOKAR (Accountant Member)

For Appellant: Shri Anil Sathe, CAFor Respondent: Shri Leyaqat Ali Aafaqui (SR DR)

Section 115JSection 143(3)Section 14ASection 250

respectively. The assessee contended that no specific expenditure was incurred for earning the exempt income and, accordingly, no disallowance under section 14A of the Act was made in the return of income. The case was selected for scrutiny assessment. The Ld. AO, not being satisfied with the submissions ... year amounted to Rs.79,43,082/-, which constituted only about 5.4% of the total revenue. Without prejudice, the Ld. AR submitted that the disallowance under section 14A should be restricted proportionately and, in any case, should not exceed the exempt income. 4. The Ld. AR filed a paper book containing

ACIT, Mumbai vs. Raheja Universal Pvt Limited, Mumbai

ITA 5344/MUM/2025[2018-19]Status: DisposedITAT Mumbai03 Feb 2026AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 143(2)Section 143(3)Section 14ASection 14A(2)Section 36(2)

Ground Nos. 1 and 2, the Revenue has assailed the action of the learned Commissioner of Income-tax (Appeals) in restricting the disallowance under section 14A of the Income-tax Act, 1961 to the extent of the exempt dividend income earned by the assessee during the year. 6.1 The facts ... partnership firm, M/s Raheja International. The assessee contended that it had not incurred any expenditure for earning the exempt income and, therefore, no disallowance under section 14A was called for. In support, reliance was placed on the judgment of the Hon'ble Punjab & Haryana High Court in CIT v. Hero

Elegant Marbles and Grani Industries Limited, Mumbai vs. ACIT, Circle 6(2)(2), Mumbai

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

ITA 7415/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Jan 2026AY 2017-18

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokarelegant Marbles & Grani Vs Assistant Commissioner Of Income Industries Limited Tax, Circle 6(2)(2), Mumbai Room No. 506, 5Th Floor Aayakar Raghuvanshi Mill Compound, Senapati Bapat Marg, Lower Bhawan, M.K. Road, Mumbai Parel, Mumbai-400013 400020 Pan: Aaace1584C Appellant Respondent Assessee By : Shri Shreyash Shah, Respondent By : Shri Ritesh Misra (Cit Dr) Date Of Hearing : 27/01/2026 Date Of Pronouncement : 30/01/2026 O R D E R Per: Anikesh Banerjee (Jm): The Instant Appeal Of The Assessee Filed Against The Order Of The Nfac, Delhi [For Brevity ‘The Ld. Cit(A)], Order Passed Under Section 250 Of The Income Tax Act 1961 (For Brevity ‘The Act’) For Assessment Year 2017-18, Date Of Order 06.11.2025. The Impugned Order Emanated From The Order Of The Ld. Assistant Commissioner Of Income Tax Circle.-6(2)(2), Mumbai (For Brevity The “Ld. Ao”), Order Passed Under Section 143(3) Of The Act, Date Of Order 12.12.2019. 2

For Appellant: Shri Shreyash ShahFor Respondent: Shri Ritesh Misra (CIT DR)

Section 139(1)Section 143(1)Section 143(3)Section 14ASection 14A(2)Section 250

7415/Mum/2025 Elegant Marbles and Grani Industries Ltd. to record satisfaction that having regard to the kind of the assessee, suo moto disallowance under Section 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting ... found acceptable in the view of CBDT's Circular No. 5/2014, dated 11th February, 2014, wherein it has been clarified that disallowance under section 14A of the Act read with Rule-8D of the Income Tax Rules' 1962 needs to be made even in a case where the assessee

DCIT, Mumbai vs. Trent Limited, Mumbai

In the result, these grounds of appeal are

ITA 5242/MUM/2025[2014-15]Status: DisposedITAT Mumbai30 Jan 2026AY 2014-15

Bench: Shri Pawan Singh& Shri Girish Agrawal(Physical Hearing) Trent Limited Dcit-2(3)(1), Mumbai 552, 5Th Floor, Aayakar Bhavan, Bombay House, Mumbai, Vs Maharashtra – 400001. Maharishi Karve Road, [Pan: Aaacl1838J] Mumbai-400020. Appellant / Assessee Respondent / Revenue Dcit-2(3)(1), Mumbai Trent Limited 552, 5Th Floor, Aayakar Bhavan, Vs G Block, Plot No. C 60, Trent House, Maharishi Karve Road, Beside City Bank, Bandra K Complex, Mumbai-400020. Bandra E Mumbai – 400051. [Pan: Aaacl1838J] Appellant / Revenue Respondent / Assessee

Section 115JSection 143(3)Section 153Section 254(1)Section 40A(2)Section 92BSection 92C

challenged by the Department and is pending adjudication before the Hon’ble High Court. 7. Whether Ld. CITIA) failed to consider that the disallowance under section 14A represent expenditure relatable to income not forming part of total income under the Act, and such expenditure ought to be considered ... aforesaid various disallowances, the assessee filed appeal before ld. CIT(A). The ld. CIT(A) allowed part relief to the assessee on disallowance under section 14A and on disallowance of brand equity fees in treating as capital expenditure and all other disallowances were upheld. Aggrieved by the order

Trent Limited, Mumbai vs. Deputy Commissioner of Income Tax 2(3)(1), Mumbai

In the result, these grounds of appeal are

ITA 5166/MUM/2025[2014-15]Status: DisposedITAT Mumbai30 Jan 2026AY 2014-15

Section 115JSection 143(3)Section 153Section 254(1)Section 40A(2)Section 92BSection 92C

Assistant Commissioner of Income Tax, Circle 14(1)(2), Mumbai vs. Lighthouse Learning Private Limited, Mumbai

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

ITA 5433/MUM/2024[2020-21]Status: DisposedITAT Mumbai30 Jan 2026AY 2020-21

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

Section 14ASection 250Section 32(1)Section 32(1)(ii)Section 43(1)Section 43(6)

CBDT, some, courts have taken a view that if there is no exempt income during a year, no disallowance under section 14A of the Act can be made for that year and in order to make the intention of the legislature clear and to make it free from any misinterpretation ... expenses incurred of Rs. 39,61,85,881; (Allowed by CIT(A), Not Challenged by Department before Hon. ITAT) e) Disallowance under Section 14A of the Act red with Rule 8D of the Income Tax Rules, 1962 ('Rules') of Rs 8,10,655; 5. Aggrieved by the said order

Dy. Commissioner of Income Tax 5(2)(1), Mumbai vs. Jsw Steel Coated Products Limited, Mumbai

In the result, appeal of the

ITA 5143/MUM/2024[2016]Status: DisposedITAT Mumbai30 Jan 2026

Bench: Shri Pawan Singh & Shri Girish Agrawal

Section 254Section 80Section 801ASection 80A(6)

appeal is dismissed. CO Nos. 257 & 258 /Mum/2024 M/s. JSW Steel Coated Products Limited 12. Ground no. 10 relates to disallowance under section 14A and ground no. 11 relates to adding the disallowance of section 14A to book profit under section 115JB. The ld. AR of the assessee submits that ... assessee has shown / earned dividend income of Rs. 87,53,540/-. The assessing officer invoked the provision of Rule 8D and computed disallowance under section 14A of Rs. 23,89,750/- and also added to the book profit under section 115JB. Before ld. CIT(A), the assessee submitted that assessing

DCIT-5(2)(1), Mumbai, Aayakar Bhavan vs. Jsw Steel Coated Products Limited, Mumbai

In the result, appeal of the

ITA 5142/MUM/2024[2015-16]Status: DisposedITAT Mumbai30 Jan 2026AY 2015-16

Bench: Shri Pawan Singh & Shri Girish Agrawal

Section 254Section 80Section 801ASection 80A(6)

dismissed. ITA Nos. 5142 & 5143/Mum/2024 And CO Nos. 257 & 258 /Mum/2024 M/s. JSW Steel Coated Products Limited - 12.Ground no. 10 relates to disallowance under section 14A and ground no. 11 relates to adding the disallowance of section 14A to book profit under section 115JB. The ld. AR of the assessee ... assessee has shown / earned dividend income of Rs. 87,53,540/-. The assessing officer invoked the provision of Rule 8D and computed disallowance under section 14A of Rs. 23,89,750/- and also added to the book profit under section 115JB. Before ld. CIT(A), the assessee submitted that assessing

ACIT, Circle-2(1)(1), Mumbai vs. M/S Bank of India, Mumbai

ITA 1548/MUM/2023[2018-2019]Status: DisposedITAT Mumbai30 Jan 2026AY 2018-2019

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri C. NareshFor Respondent: Shri Satya Pal Kumar, CIT (DR)

Section 10Section 14ASection 250Section 32Section 90

trade and the income arising therefrom are not exempt from tax. Further, dividend/interest income is incidental to holding such securities and hence, disallowance under section 14A of the Act is not warranted. In support of its contention, the assessee, inter-alia, placed reliance upon the decision ... ground that may be necessary at the time of hearing." 45. Grounds No.1 and 2 raised in Revenue's appeal pertain to the disallowance under section 14A read with Rule 8D of the Rules. 46. While considering the similar disallowance made under section 14A read with Rule