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“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 Ronit Mercantile Private Limited, Mumbai vs. ITO, Ward 13(3)(2), Mumbai

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

ITA 385/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Jul 2024AY 2017-18

Bench: Shri Prashant Maharishi, Am M/S Ronit Mercantile Private Ito, Ward 13(3)(2), Limited Aaykar Bhavan A-101, Humgra Park Pathanwadi Vs. Road, Malad (East), Opp Masid Churchgate, Mumbai-400020 Mumbai-400 097 (Appellant) (Respondent) Pan No. Aadcr9382C Assessee By : None Revenue By : Shri R.R. Makwana, Dr Date Of Hearing: 06.06.2024 Date Of Pronouncement : 29.07.2024

For Appellant: NoneFor Respondent: Shri R.R. Makwana, DR
Section 115BSection 143(2)Section 143(3)Section 14ASection 68

were not complied with. The assessee also did not provide any information about the investment made. Therefore, the learned Assessing Officer made a disallowance under Section 14A of the Act of ₹3,02,671/- applying provisions of Rule 8D of the Rules. As the assessee did not furnish any information

Colgate-Palmolive (India) Limited, Mumbai vs. Principle Commissioner of Income Tax -6, Mumbai

ITA 2645/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Jul 2024AY 2017-18

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Bleι.Τ.Α. No. 2645/Mum/2024

For Appellant: Shri J.D. Mistry & Shri Madhur Agarwal, A/RsFor Respondent: Ms. Madhu Malati Ghosh, CIT, D/R
Section 142(1)Section 143(3)Section 263Section 80GSection 80J

before tax as per P&L 8,514,292,799 ADD: DISALLOWANCES Donation 165,200 Depreciation/Amortisation as per books 1,332,427,842 Disallowance under section 14A (As per TAR) 145,150 Corporate Social Responsibility 155,806,642 Amount of Interest paid to Micro, Small and Medium Enterprises

Deputy Commissioner of Income Tax, Vadodara vs. Jayant Shantilal Sanghvi, Vadodara

In the result, appeal preferred by the Revenue is dismissed

ITA 1134/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad26 Jul 2024AY 2016-17

Bench: Ms. Suchitra Raghunath Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 1134/Ahd/2023 ("नधा"रण वष" / Assessment Year : 2016-17) Deputy Commissioner Of Jayant Shantilal Sanghvi बनाम/ Pratham, Makrand Desai Income Tax Vs. Vadodara Road, Gotri, Vadodara, Gujarat 390007 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Anrps3651F (Appellant) .. (Respondent) Shri Ashesh R Rewar, Sr. Dr अपीलाथ" ओर से /Appellant By : ""यथ" क" ओर से/Respondent By : Shri Milin Mehta, A.R. 22/07/2024 Date Of Hearing Date Of Pronouncement 26/07/2024 O R D E R Per Shri Narendra Prasad Sinha, Am: This Appeal Is Filed By The Revenue Against The Order Of National Faceless Appeal Centre (Nfac), Delhi, (In Short ‘The Cit(A)’) Dated 06.11.2023 For The Assessment Year 2016-17. 2. The Brief Facts Of The Case Are That The Assessee, An Individual, E-Filed Return Of Income For A.Y. 2016-17 On 29.09.2016 Declaring Total Income Of Rs.13,82,36,020/-. In The Course Of Assessment, The Ao Found That The Assessee Had Declared Exempt Income Of Rs.4,02,26,125/- In Respect Of Profit

For Respondent: Shri Milin Mehta, A.R
Section 10(38)Section 14ASection 14A(2)

appeal before us. 5. The following grounds have been taken in this appeal: “1. "Whether Ld. CIT(A) was justified in deleting the disallowance under section 14A read with Rule 8D of the Act without appreciating the fact that the AO has drawn due satisfaction for invoking provisions of section ... drawn our attention to Para 5.1 of the assessment order wherein the AO had categorically recorded his satisfaction regarding disallowance under Section 14A of the Act and, thereafter, had also allowed opportunity to the assessee to explain why the said disallowance should not be made. In view of these facts

Godrej Investments Pvt Ltd (Now Amalgamated With Godrej and Boyce Mfg. Co. Ltd), Mumbai vs. Dy Commissioner of Income Tax, Circle 14(1)(2), Mumbai

Appeal is partly allowed in above terms

ITA 2233/MUM/2024[2016-2017]Status: DisposedITAT Mumbai26 Jul 2024AY 2016-2017

Bench: Shri Satbeer Singh Godara & Shri Omkareshwar Chidara

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

Assessing Officer. 3) The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in computing the disallowance under Section 14A of the Act in accordance with sub-clause (ii) and (iii) of clause (2) of Rule 8D, when the Appellant has suo moto computed ... actual amount of interest and administrative expenditure liable for disallowance under Section 14A of the Act read with Rule 8D(2)(1) amounting to Rs.15.44 lakhs. 4) The learned Commissioner of Income-tax (Appeals) erred in relying on factually erroneous presumptions and rejecting the contention raised by the Appellant that

Dy. CIT Circle 3(4), Mumbai vs. Asian Paints Ltd, Mumbai

In the result, appeals filed by assessee and Revenue for A

ITA 3083/MUM/2023[2018-19]Status: DisposedITAT Mumbai26 Jul 2024AY 2018-19

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

Section 115JSection 143(3)Section 14ASection 2(43)Section 35Section 40Section 80GSection 90

submissions in the light of decisions relied upon and perused material on record. Undisputedly, the assessee in its computation of income has computed disallowance under section 14A of the Act at Rs. 23,98,769 by applying certain principles of apportionment. Therefore, it is not a case of any disallowance ... assessee is incorrect having regard to the books of account maintained, has proceeded to compute the disallowance simply on the reasoning that disallowance under section 14A of the Act has to be made by applying the methodology of Rule 8D. In our view, the aforesaid reasoning of the Assessing Officer

Dy CIT Circle -3(4), Mumbai vs. Asian Paints Limited, Mumbai

In the result, appeals filed by assessee and Revenue for

ITA 3063/MUM/2023[2017-18]Status: DisposedITAT Mumbai26 Jul 2024AY 2017-18
Section 143(3)Section 14ASection 2(43)Section 35Section 40Section 80GSection 90

submissions in the light of decisions relied upon and perused material on _ record. Undisputedly, the assessee in its computation of income has computed disallowance under section 14A of the Act at Rs. 23,98,769 by applying certain principles of apportionment. Therefore, it is not a case of any disallowance ... assessee is incorrect _having regard_to the books of account_maintained. has proceeded _to compute the disallowance simply on _the reasoning that disallowance under section 14A of the Act has to_ be made_by applying the methodology of Rule 8D. In our view, the aforesaid_reasoning of the Assessing Officer

Dy CIT Circle 3(4), Mumbai vs. Asian Paints, Mumbai

ITA 2936/MUM/2023[2016-17]Status: DisposedITAT Mumbai26 Jul 2024AY 2016-17
Section 143(3)Section 14ASection 2(43)Section 35Section 40Section 80GSection 90

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT RENU JAUHRI, ACCOUNTANT MEMBER

Asian Paints Limited, Santacruz vs. Deputy Commissioner of Income Tax, Ltu Circle 2, Cuffe Parade

ITA 2700/MUM/2023[2016-17]Status: DisposedITAT Mumbai26 Jul 2024AY 2016-17
Section 143(3)Section 14ASection 2(43)Section 35Section 40Section 50Section 80GSection 90

submissions in the light of decisions relied upon and perused material on record. Undisputedly, the assessee in its computation of income has computed disallowance under section 14A of the Act at Rs. 23,98,769 by applying certain principles of apportionment. Therefore, it is not a case of any disallowance ... assessee is incorrect having regard to the books of account maintained, has proceeded to compute the disallowance simply on the reasoning that disallowance under section 14A of the Act has to be made by applying the methodology of Rule 8D. In our view, the aforesaid reasoning of the Assessing Officer

Asian Paints Limited, Santacruz vs. Assistant Commissioner of Income Tax, Ltu Circle 1, Cuffe Parade

ITA 2697/MUM/2023[2017-18]Status: DisposedITAT Mumbai26 Jul 2024AY 2017-18
Section 143(3)Section 14ASection 2(43)Section 35Section 40Section 50Section 80GSection 90

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT RENU JAUHRI, ACCOUNTANT MEMBER

Asian Paints Limited, Santacruz vs. National Faceless Assessment Centre, Delhi

ITA 2696/MUM/2023[2018-19]Status: DisposedITAT Mumbai26 Jul 2024AY 2018-19
Section 143(3)Section 14ASection 2(43)Section 35Section 40Section 50Section 80GSection 90

submissions in the light of decisions relied upon and perused material on record. Undisputedly, the assessee in its computation of income has computed disallowance under section 14A of the Act at Rs. 23,98,769 by applying certain principles of apportionment. Therefore, it is not a case of any disallowance ... assessee is incorrect having regard to the books of account maintained, has proceeded to compute the disallowance simply on the reasoning that disallowance under section 14A of the Act has to be made by applying the methodology of Rule 8D. In our view, the aforesaid reasoning of the Assessing Officer

ITO, New Delhi vs. M/S Ansal Housing & Construction Ltd., New Delhi

In the result, the cross-objection filed by the assessee is dismissed

ITA 2731/DEL/2010[2007-08]Status: DisposedITAT Delhi26 Jul 2024AY 2007-08

Bench: Shri G.S.Pannu & Shri Kul Bharat[Assessment Year : 2007-08] Dcit, Vs Ansal Housing & Construction Ltd., Central Circle-20, Ugf-15, Indraprastha Building, 21, New Delhi. Barakhamba Road, New Delhi. Pan-Aaaca0377R Appellant Respondent

Section 143(3)Section 14ASection 80Section 80I

circumstances of the case, the Ld CIT(A) has erred in law and facts of the case in deleting addition by way of disallowance under section 14A of Income Tax Act, 1961 read with Rule 8D of Income Tax Rule, 1962 and computation of disallowance under the Rule have been ... failed to establish any nexus between the funds borrowed from public deposits and the exempt income earned by the assessee, disallowance under section 14A of the Act was not warranted. Submission At the outset, it is respectfully submitted that provisions of Rule 8D are not applicable for the relevant assessment

M/S. Dhanashree Developers P Ltd., Maharashtra vs. ACIT, New Delhi

In the result the appeal of the assessee is allowed

ITA 3065/DEL/2016[2012-13]Status: DisposedITAT Delhi25 Jul 2024AY 2012-13

Bench: Shri G.S Pannu, Hon’Ble & Shri Vimal Kumarasstt. Year 2012-13 Dhanashree Developers P. Ltd. Vs. Acit, Central 303, Western Edge-1, Circle-27, Western Express Highway, New Delhi. Above Metro Mall, Borivali (East) Mumbai 400066 Pan Aaccd6182F (Appellant) (Respondent)

For Appellant: Shri Tanzil Padvekar, AdvocateFor Respondent: Shri Ram Dhan Meena, Sr.DR
Section 143(2)Section 14A

matter we are inclined to allow the appeal on this very issue.” 9. Learned authorised representative for the Department submitted that disallowance under section 14A was rightly disallowed. 10. From examination of record in light of aforesaid rival contention it is crystal clear that as per balance sheet the assessee

M/S Dhanashree Developers P. Ltd., Mumbai vs. DCIT, New Delhi

In the result the appeal of the assessee is allowed

ITA 1848/DEL/2016[2010-11]Status: DisposedITAT Delhi25 Jul 2024AY 2010-11

Bench: Shri G.S Pannu, Hon’Ble & Shri Vimal Kumarasstt. Year 2010-11 Dhanashree Developers P. Ltd. Vs. Dcit, Central 303, Western Edge-1, Western Circle-4, Express Highway, New Delhi. Above Metro Mall, Borivali (East) Mumbai 400066 Pan Aaccd6182F (Appellant) (Respondent)

For Appellant: Shri Tanzil Padvekar, AdvocateFor Respondent: Shri Ram Dhan Meena, Sr.DR
Section 143(2)Section 14A

made on account of bogus purchases, on account of late payment of VAT/TDS is of penal in nature the additions were rightly made. Disallowance under section 14A was rightly disallowed. 13. From examination of record in light of aforesaid rival contention it is crystal clear that Learned

ACIT, Circle-1(1)(1), Ahmedabad, Vejalpur vs. Axis Bank Limited, Ellisbridge

In the result, the appeal of the Department is dismissed

ITA 49/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad24 Jul 2024AY 2011-12

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr. Advocate & ShriFor Respondent: Dr. Darsi Suman Ratnam, CIT DR
Section 143(3)Section 14ASection 254

fact that all the operating expense/ administrative expenses have been allocated to exempt income on a reasonable basis while computing suo-moto disallowance under Section 14A and accordingly, no further disallowance of administrative expenses is warranted. 1.3 The learned AO and Hon'ble CIT(A) erred in rejecting ... decision of the Hon'ble ITAT in the Bank's own case for AY 2008-09 in ITA No. 251/Ahd/2012, wherein the disallowance under Section 14A on account of interest had been deleted by the Hon'ble ITAT. The Ld. AO and Hon'ble CIT(A) failed to appreciate that

ACIT, Circle-1(1)(1), Ahmedabad, Vejalpur vs. Axis Bank Ltd, Elisbridge

In the result, the appeal of the Department is dismissed

ITA 48/AHD/2024[2010-11]Status: DisposedITAT Ahmedabad24 Jul 2024AY 2010-11

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr. Advocate & ShriFor Respondent: Dr. Darsi Suman Ratnam, CIT DR
Section 143(3)Section 14ASection 254

fact that all the operating expense/ administrative expenses have been allocated to exempt income on a reasonable basis while computing suo-moto disallowance under Section 14A and accordingly, no further disallowance of administrative expenses is warranted. 1.3 The learned AO and Hon'ble CIT(A) erred in rejecting ... decision of the Hon'ble ITAT in the Bank's own case for AY 2008-09 in ITA No. 251/Ahd/2012, wherein the disallowance under Section 14A on account of interest had been deleted by the Hon'ble ITAT. The Ld. AO and Hon'ble CIT(A) failed to appreciate that

Axis Bank Limited, Ahmedabad vs. The ACIT., Circle-1(1)(1), Ahmedabad

In the result, the appeal of the Department is dismissed

ITA 143/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad24 Jul 2024AY 2011-12

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr. Advocate & ShriFor Respondent: Dr. Darsi Suman Ratnam, CIT DR
Section 143(3)Section 14ASection 254

fact that all the operating expense/ administrative expenses have been allocated to exempt income on a reasonable basis while computing suo-moto disallowance under Section 14A and accordingly, no further disallowance of administrative expenses is warranted. 1.3 The learned AO and Hon'ble CIT(A) erred in rejecting ... decision of the Hon'ble ITAT in the Bank's own case for AY 2008-09 in ITA No. 251/Ahd/2012, wherein the disallowance under Section 14A on account of interest had been deleted by the Hon'ble ITAT. The Ld. AO and Hon'ble CIT(A) failed to appreciate that

Axis Bank Limited, Ahmedabad vs. The ACIT., Circle-1(1)(1), Ahmedabad

In the result, the appeal of the Department is dismissed

ITA 142/AHD/2024[2010-11]Status: DisposedITAT Ahmedabad24 Jul 2024AY 2010-11

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr. Advocate & ShriFor Respondent: Dr. Darsi Suman Ratnam, CIT DR
Section 143(3)Section 14ASection 254

fact that all the operating expense/ administrative expenses have been allocated to exempt income on a reasonable basis while computing suo-moto disallowance under Section 14A and accordingly, no further disallowance of administrative expenses is warranted. 1.3 The learned AO and Hon'ble CIT(A) erred in rejecting ... decision of the Hon'ble ITAT in the Bank's own case for AY 2008-09 in ITA No. 251/Ahd/2012, wherein the disallowance under Section 14A on account of interest had been deleted by the Hon'ble ITAT. The Ld. AO and Hon'ble CIT(A) failed to appreciate that

DCIT-CC-7(3), Aaykar Bhavan, Maharishi Karve Road, Mumbai, Maharashtra vs. Arihant Premises Private Limited, Mumbai

In the result, ground Nos

ITA 1602/MUM/2024[2013-14]Status: DisposedITAT Mumbai24 Jul 2024AY 2013-14

Bench: Shri Prashant Maharshi & Shri Anikesh Banerjeedcit-Cc-7(3), Vs Arihant Premises Private Limited Room No-655, Aayakar Bhavan, 412, Floor-4, Vardhaman Chamber Maharishi Karve Road, Cawasji Patel Road, Horniman Mumbai-400 020 Circle, Fort, Mumbai-400 001 Pan : Aaaca7260K Appellant Respondent

For Appellant: Shri Neeraj ShethFor Respondent: Shri Manoj Kumar Sinha (SRDR)
Section 139(1)Section 143(3)Section 14ASection 250Section 36Section 36(1)(iii)

Special Bench of ITAT, Mumbai in the case of M/s Wallstreet Construction 102 TTJ 505. In relation to the disallowance under section 14A, the Ld.CIT(A) fully relied on the order of Reliance Powers & Utilities vs CIT 313 ITR 340(Bom) and the assessee had declared that there ... exempt income during this impugned assessment year. So, disallowance under section 14A isquashed. For disallowance under section 36(1)(iii), it is clear that the assessee has sufficient amount to lend the amount to the party for purchasing the shares.We fully relied on the order of the Hon’ble Bombay

Hero Motocorp Ltd (As Successor of Hero Investment P.Ltd), New Delhi vs. DCIT, Circle 11(1), New Delhi

The appeal is allowed

ITA 1053/DEL/2023[2011-12]Status: DisposedITAT Delhi24 Jul 2024AY 2011-12

Bench: Shri G.S. Pannu & Shri Anubhav Sharmaassessment Year: 2011-12

Section 143(3)

account of - (i) treating profit on sale of investment and interest income as business income-Rs.7,50,07,419; and (ii) disallowance under section 14A- Rs.1,01,82,707. The said assessed total income was subsequently rectified to Rs.6,02,96,513 vide order dated 08.04.2015 passed under section ... companies." 22. Ld. Sr. Counsel has emphasized that in the original assessment order passed under section 143(3), the assessing officer specifically made disallowance under section 14A on the ground that the assessee had incurred expenses in relation to investments, resulting in exempt dividend income. It was contended that while

Chowdry Associates, New Delhi vs. ACIT, Circle-6(1), New Delhi

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

ITA 7718/DEL/2019[2013-14]Status: DisposedITAT Delhi24 Jul 2024AY 2013-14

Bench: Shri Saktijit Dey & Shri Naveen Chandra

For Appellant: Shri M.P. Rastogi, AdvFor Respondent: Shri Vivek Kumar Upadhyay, Sr. DR
Section 10(38)Section 14ASection 28

circumstances deleted the addition u/s 14A. 25. We have given thoughtful consideration to the orders of the authorities below. The issue of disallowance under section 14A has been elaborately dealt with by the Coordinate Bench of Delhi ITAT in AY 2014-15 in ITA no 6525/Del/2019 dated 14.09.2023 in assessee