“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

Cadila Pharmaceuticals Ltd., Ahmedabad vs. The Asst. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

In the result, appeals of the Revenue are dismissed and that of the assessee are allowed for statistical purposes

ITA 51/AHD/2020[2008-09]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2008-09

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, and Shri Parin Shah, Ars

Section 250(6)Section 40Section 9(1)(vii)

case for Asst.Year 2007-08 and 2011-12 holding so. He therefore made a plea before the ld.CIT(A) to restrict the disallowance under section 14A to the extent of exempt income earned, and further requested suo moto disallowance made by the assessee under section 14A ... being entertained by the ITAT, and following the decision of the ITAT in the said year, he restricted the disallowance under section 14A to the extent of exempt income earned amounting to Rs.29,926/-. 70. Before us, the ld.DR was unable to rebut the finding of the ld.CIT

Sai Service Private Limited, Pune vs. The Deputy Commissioner of Income Tax, Circle-10, Pune

In the result, appeal of the assessee partly allowed

ITA 1076/PUN/2023[2020-21]Status: DisposedITAT Pune16 Apr 2024AY 2020-21

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita No.1076/Pun/2023 िनधा"रण वष" / Assessment Year : 2020-21 Sai Service Private Limited, Dcit, Circle-10, Mumbai Pune Road, Vs Pune Phugewadi, Pune 411 012 Maharashtra Pan : Aabcs4998M Appellant/ Assessee Respondent /Revenue Assessee By Smt. Deepa Khare – Ar Revenue By Shri Sourabh Nayak - Dr Date Of Hearing 22/02/2024 Date Of Pronouncement 16/04/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By Assessee Is Against The Order Of Ld.Commissioner Of Income-Tax(Appeals) In The National Faceless Appeal Centre, Delhi Passed U/S.250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) On 04.09.2023 For Assessment Year 2020-21. The Grounds Of Appeal Raised By The Assessee For A.Y. 2020-21 Are As Under : “The Appellant Being Aggrieved By The Order & Decision Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, Vide Order Dated 04/09/2023 Bearing Din & Order No. Itba/Nfac/S/250/2023-24/1055706047(1) Is Filing This Appeal On The Following Grounds Of Appeal. 1. The Commissioner Of Income Tax (Appeals) Erred In Confirming The Additional Disallowance Of Rs.78,20,410/-

Section 10Section 14ASection 14A(2)Section 250Section 270A(1)

rule 8D of Rs.78,20,410/-”. 2.1 The ld.AR brought to our notice that AO has not recorded any satisfaction before making the disallowance under section 14A of the Act. The ld.AR took us through the relevant paragraphs of the assessment order. Therefore, ld.AR pleaded that disallowance under section 14A ... before applying the theory of apportionment, the AO needs 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

Sai Service Private Limited, Pune vs. The Deputy Commissioner of Income Tax, Circle-10, Pune

In the result, appeal of the assessee is partly allowed

ITA 1075/PUN/2023[2018-19]Status: DisposedITAT Pune16 Apr 2024AY 2018-19

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita Nos.1074 & 1075/Pun/2023 िनधा"रण वष" / Assessment Years : 2017-18 & 2018-19 Sai Service Private Limited, Dcit, Circle-10, Mumbai Pune Road, Vs Pune Phugewadi, Pune 411 012 Maharashtra Pan : Aabcs4998M Appellant/ Assessee Respondent /Revenue Assessee By Smt. Deepa Khare– Ar Revenue By Shri Sourabh Nayak- Dr Date Of Hearing 22/02/2024 Date Of Pronouncement 16/04/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: These Two Appeals Filed By Assessee Are Against The Separate Orders Of Commissioner Of Income-Tax (Appeals) In The National Faceless Appeal Centre, Delhi Passed U/S.250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) On 04.09.2023 & 18.09.2023 Respectively For Assessment Years 2017-18 & 2018-19. Since Some Grounds Of Appeal Are Common In All These Appeals, We Proceed To Dispose Of These Appeals By This Consolidated Order For The Sake Of Convenience. We Are Discussing A.Y.2017-18 Hereonwards.

Section 10Section 139(1)Section 142(1)Section 143(1)Section 14ASection 250Section 36(1)(va)Section 80G

grounds of appeal. 5. Such order and such other orders be passed as deem fit and proper.” 16. The Ground No.2 is regarding disallowance under section 14A of the Act. Assessee had received a dividend of Rs.2,20,97,710/-. Assessee claimed the said amount exempt under section ... Assessee had voluntarily disallowed Rs.8,34,424/- under section 14A of the Act. The Assessing Officer(AO) invoked the disallowance under section 14A read with Rule 8D(2)(ii) at 1% of the Average Investments made during the Financial Year. The AO has recorded proper satisfaction before invoking Rule

Sai Service Private Limited, Pune vs. The Deputy Commissioner of Income Tax, Circle-10, Pune

In the result, appeal of the assessee is partly allowed

ITA 1074/PUN/2023[2017-18]Status: DisposedITAT Pune16 Apr 2024AY 2017-18

Section 10Section 139(1)Section 142(1)Section 143(1)Section 14ASection 250Section 36(1)(va)Section 80G

Deputy Commissioner of Income Tax, Chandigarh vs. Essix Biosciences Limited, Chandigarh

In the result, the appeal filed by the Department is

ITA 534/CHANDI/2023[2014-15]Status: DisposedITAT Chandigarh12 Apr 2024AY 2014-15

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Ved Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR

Section 14ASection 201Section 40

Department {CIT(A), ITD)} [NFAC] has erred both on facts and in law in ITA 534/CHD/2023 & C.O. 08/CHD/2024 A.Y.2014-15 5 restricting the disallowance under Section 14A to Rs. 48,48,000/- despite the fact that assessee has earned the exempt income of Rs. 7,12,442/- during the year under ... circumstances of the case, the above action of the Ld. CIT(A), ITD is contrary to the settled position of law that the disallowance under Section 14A cannot exceed the amount of exempt income earned by the assessee. (iii) On the facts and circumstances of the case, the above action

Techno Electric & Engineering Company Limited., Noida vs. A.O, C.C-2(1), Kolkata

In the result appeal filed by the assessee is allowed for statistical purposes

ITA 1124/KOL/2023[2015-16]Status: DisposedITAT Kolkata12 Apr 2024AY 2015-16

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 14A

investments were made out of the own funds and no borrowed funds were applied in making such investments. Therefore, there cannot be any disallowance under section 14A of the Act. The ld. CIT (A) accept the contention 3 I.T.A. No.1124/Kol/2023 Assessment Year: 2015-16 Techno Electric & Engineering Company Limited ... decided in favour of assessee by observing as under: “1. The next substantial question of law is with regard to the disallowance under section 14A of the Act. The tribunal after noting several decisions has directed the assessing officer to compute the disallowance as per Rule 8D by taking into

Modi Entertainment Ltd vs. DCIT Circle 5 (1)

In the result, the appeal of the assessee on this ground is dismissed

ITA 3051/DEL/2007[2001-2002]Status: DisposedITAT Delhi12 Apr 2024AY 2001-2002

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Rohit Garg, AdvFor Respondent: Sh. Sanjay Kumar, Sr. DR

Section 10(33)Section 115JSection 143(3)Section 14ASection 2Section 4

right in holding that while computing the book profit under section 115JA (sic. Section 115JB) of the Income-tax Act, 1961, no disallowance under section 14A was required to be made? 9 Modi Entertainment Ltd. (ii) Whether the Income-tax Appellate Tribunal was right in deleting interest under section 234D

Axis Bank Limited, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

The appeal of the assessee is partly allowed for statistical purposes

ITA 365/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2018-19

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2018-19 Axis Bank Limited, Vs. Assistant Commissioner Of “Trishul”, 3Rd Floor, Opp. Income-Tax, Samartheshwar Temple, Nr. Law Circle 1(1)(1), Garden, Ellisbridge, Ahmedabad Ahmedabad-380006 Pan : Aaacu 2414 K अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Dr. Darsi Suman Ratnam, Cit-Dr सुनवाई क" तारीख/Date Of Hearing : 29.11.2023/03.04.2024 घोषणा क" तारीख /Date Of Pronouncement: 10.04.2024 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: By Way Of This Appeal, The Assessee-Appellant Has Challenged Correctness Of The Order Dated 28Th July, 2022 Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act” For Short], For The Assessment Year (Ay) 2018-19. 2. Ground No.1 Raised By The Assessee Reads As Under:- “1. Disallowance In Respect Of Annual Technical Fees (Tax Effect - Rs. 16,84,276) 1.1 The Learned Drp Has Erred In Upholding Addition Made By Ao In Respect Of Treating Annual Technical Services (Ats) Fees Paid To Infosys Limited To The Extent Of Rs. 48.66 Lacs As Prior Period Expense. 1.2. It Is Submitted That The Expenditure Relates To Amount Payable To Infosys & No Part Of The Amount Was Claimed As Expenditure At Any Time In The 2 Axis Bank Limited Vs. Acit Ay : 2018-19

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Section 143(3)Section 144C

details of which were called for and duly submitted by the assessee. The relevant figures for the current A.Y. for working out the disallowance under Section 14A r.w. Rule 8D as submitted by the assessee are:- 8 Axis Bank Limited Vs. ACIT AY : 2018-19 (Amount in cr) Working ... came to 3.72% of the expenses. And accordingly an amount of Rs.1,03,08,336/- was determined suo moto by the assessee as disallowable under section 14A of the Act, and disallowed while computing its taxable income. Thus, the assessee had demonstrated a reasonable basis for calculating the disallowance

M/S. Vidhata Associates, Gandhinagar vs. The Pr. CIT, Gandhinagar

In the result, the appeal of the assessee is allowed

ITA 419/AHD/2020[2015-16]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2015-16

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Mehuk K. Patel, AdvocateFor Respondent: Shri Sudhendu Das, CIT-DR

Section 143(3)Section 263Section 30(1)(iii)Section 36(1)(iii)

Naga Dhunseri Group Ltd 146 taxmann.com 424 (Calcutta), the High Court held that where Principal Commissioner invoked revisionary proceedings on grounds that disallowance under Section 14A in respect of exempt income was not considered by AO even when assessee’s case was selected for limited scrutiny to verify introduction ... capital in NBFC/investment companies which was linked to such disallowance, since issue of disallowance under Section 14A was not an issue selected for limited scrutiny, Principal Commissioner could not make a roving enquiry in guise of a limited scrutiny and thus, impugned revisionary order was to be quashed

Il&Fs Maritime Infrastructure Company Limited, Mumbai vs. The Deputy Commissioner of Income Tax-14(1)(1), Mumbai

ITA 3558/MUM/2023[2013-14]Status: DisposedITAT Mumbai08 Apr 2024AY 2013-14

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Ms. Hetal Vora &For Respondent: H.M. Bhatt

Section 143(2)Section 14A

Delhi High Court holding that no question of law arose from the order of the Income-tax Appellate Tribunal (Tribunal), thereby deleting the disallowance under section 14A of the Act in absence of any exempt income during the year • In 2018, the Hon'ble Supreme Court had previously dismissed ... appellant, provisions of Rule 8D shall also remain inapplicable Accordingly, in the absence of any exempt income being earned by the appellant, no disallowance under section 14A is applicable during the year under consideration 2.7 The appellant further relies on the decision of the Hon'ble Delhi High Court

Dy CIT CC 6(4), Mumbai vs. Arshiya Ltd., Mumbai

ITA 971/MUM/2020[2013-14]Status: DisposedITAT Mumbai08 Apr 2024AY 2013-14

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Ajay ChandraFor Respondent: Piyush Chhajed

Section 10(34)Section 143(2)Section 143(3)Section 14A

Page 1 ITA No.3952/Mum/2015 & 971/Mum/2020, ITA No.7900/Mum/2019 ACIT, CC 6(4) Vs. M/s Arshiya Limited IN THE INCOME TAX APPELLATE

ACIT CC 6(4), Mumbai vs. Arshiya Ltd, Mumbai

In the result, the appeal of the revenue vide ITA No

ITA 3952/MUM/2015[2011-12]Status: FixedITAT Mumbai08 Apr 2024AY 2011-12

Bench: Shri Aby T Varkey&

For Respondent: Piyush Chhajed

Section 10(34)Section 143(2)Section 143(3)Section 14A

ITA No.3952/Mum/2015 & 971/Mum/20 ies 20, ITA No.7300/Mum/2019 ACIT, CC 6(4) Vs. M/s Arshiya Limited IN THE INCOME TAX APPELLATE

Dy. Commissioner of Income Tax, Central Circle-3(3), Mumbai vs. Avaada Ventures Private Limited, Mumbai

In the result, all the appeals of the Revenue are dismissed as well as Cross Objections of the assessee are dismissed as infructuous

ITA 4342/MUM/2023[2017]Status: DisposedITAT Mumbai05 Apr 2024

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 132Section 132(4)Section 139(1)Section 143(3)Section 153A

following additions to the income declared in the return of income filed against notice issued under section 153A of the Act: a. Disallowance under section 14A- Rs. 8,49,459/- b. Difference in 26AS- unreconciled amount Rs. 4,01,299 c. Unexplained cash credit

Assistant Commissioner of Income Tax- 4(1)(1), Mumbai vs. Aczet Private Limited, Mumbai

In the result, appeal filed by the revenue is partly allowed as indicated above

ITA 3869/MUM/2023[2014-15]Status: DisposedITAT Mumbai05 Apr 2024AY 2014-15

Bench: Shri Amit Shukla, Hon’Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 14A

dividend or tax free income received during the year hence no expenses can be attributed to earning tax free income hence no disallowance under section 14A of the Act. Further, Ld.AR of the assessee submitted that own capital and free reserve is ₹.9.20 Crores which is much more than