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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

Nahar Colours and Coatinhgs Private Limited, Udaipur vs. Principal Commissioner Ofincometax, Udaipur

In the result, appeal of the assessee is allowed

ITA 140/JODH/2023[2018-19]Status: DisposedITAT Jodhpur09 Aug 2023AY 2018-19
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 263Section 801ASection 80I

section (2) of section 14A can be applied. The legislature in its own wisdom, to remove the subjectivity involved in the calculation of disallowance under section 14A has standardized the amount of disallowance to be made under section 14A. This amendment was necessary as the Assessing Officers were making disallowances ... does not use the word "income of the year but income under the Act". This also indicates that for invoking disallowance under section 14A, it is not material that have earned such exempt income during the financial year under consideration, should have earned such exempt income during the financial year

DCIT, Circle-21(1), New Delhi vs. Religare Arts Initiative Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 7554/DEL/2018[2013-14]Status: DisposedITAT Delhi09 Aug 2023AY 2013-14

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2013-14

For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Shri Rohit Garg, CIT- DR
Section 143(3)Section 37Section 40A(2)(b)

disallowed Rs.60,16,402 on ad- hoc basis being 50% of the interest cost of Rs 1,20,32,804/- (not of disallowance under section 14A of the Act) based on the following incorrect assumptions.  The Appellant failed to justify the purpose for which the interest costs

Kotak Mahindra Investments Ltd, Mumbai vs. ACIT, OSD, Range 3(2), Mumbai

In the result, appeal of assessee is partly allowed

ITA 1712/MUM/2023[2011-12]Status: DisposedITAT Mumbai04 Aug 2023AY 2011-12

Bench: Shri Vikas Awasthy & Ms. Padmavathy Sआअसं. 1712/मुं/2023 (िन.व. 2011-12) Kotak Mahindra Bank Ltd. 27 Bkc, Bandra Kurla Complex, Bandra East, Mumbai-400051. Pan: Aaach1075K ...... अपीलाथ" /Appellant बनाम Vs. Acit (Osd)-3(2), Room No. 555, Aayakar Bhavan, M.K. Road, Mumbai-400020. ..... "ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Sh. Madhur Agrawal, Advocate "ितवादी "ारा/Respondent By : Sh. Prakash Kishinchandani, Sr. Dr सुनवाई की ितिथ/ Date Of Hearing : 03/08/2023 घोषणा की ितिथ/ Date Of Pronouncement : 04/08/2023

For Appellant: Sh. Madhur Agrawal, AdvocateFor Respondent: Sh. Prakash Kishinchandani, Sr. DR
Section 14ASection 234BSection 234C

Violation of Principle of Natural Justice. 2 आअसं. 1712/मुं/2023(िन.व. 2011-12) ITA Nos. 1712/M/2023 (AY 2011-12) Ground No.2: Disallowance under section 14A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) r.w.r. 8D. Ground No.3: Levy of interest under section 234B ... assessee submitted at the outset that he is not pressing Ground No.1 of appeal. 2.1 In respect of Ground No.2 assailing disallowance under section 14A r.w.r. 8D, the ld. counsel submits that during the period relevant to AY under appeal, the assessee has earned dividend income

R.R.Paints Pvt Ltd, Mumbai vs. DCIT, Circle-15(3)(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1682/MUM/2023[2013-2014]Status: DisposedITAT Mumbai01 Aug 2023AY 2013-2014

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 14ASection 154

that the assessee had earned exempt income of Rs.2,327/- only during the year under consideration and hence, it did not make any disallowance under section 14A of the Act. However, the Assessing Officer computed the disallowance at Rs. 28,22,691/- by applying provisions of rule ... disposed of the said rectification petition till date. The Learned AR further submitted that it is well settled law that the disallowance under section 14A cannot exceed exempt income. Accordingly he submitted that the disallowance under section 14A in the instant case cannot exceed the amount

Elara Capital (India) Private Limited, Mumbai vs. ACIT- Circle 6(2)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1569/MUM/2023[2017-18]Status: DisposedITAT Mumbai31 Jul 2023AY 2017-18

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2017-18 Elara Capital (India) Pvt. Ltd., The Acit-Circle 6(2)(2), Tower 3, 21St Floor, One Room No. 506, 5Th Floor, Vs. International Center, Senapati Aayakar Bhavan, Maharshi Bapat Marg, Elphinstone Karve Road, Mumbai- Road (West), Mumbai-400013. 400020. Pan No. Aabce 6487 B Appellant Respondent

For Appellant: Mr. Milind DattaniFor Respondent: Mr. P.D. Chogule (Addl. CIT)
Section 14A

learned Commissioner (Appeals)/ NFAC erred in The learned Commissioner (Appeals)/ NFAC erred in The learned Commissioner (Appeals)/ NFAC erred in making disallowance under section 14A in relation to the making disallowance under section 14A in relation to the making disallowance under section 14A in relation to the investments made ... ceeded the total expenditure claimed by the assessee.....During the AY 2017 assessee.....During the AY 2017-18 the disallowance under 18 the disallowance under section 14A r.w.r. 8D was worked out with new methodology r.w.r. 8D was worked out with new methodology prescribed for working of expenses attributable

Sunil Kumar Doshi, Barmer vs. DCIT, CPC / ITO, Ward-1, Bangalore / Barmer

In the result, appeal of the assessee is allowed

ITA 124/JODH/2022[2018-19]Status: DisposedITAT Jodhpur31 Jul 2023AY 2018-19

Bench: Making Assessment, Which Is Beyond Jurisdiction Of The Present Proceedings. 2. A. The Ld. Ao Has Erred In Not Deleting The Addition Of Rs. 62,641/- Made By The Ld. Ao In 143(1) Order On Account Of Depreciation Claimed. B. The Ld. Cit(A) Has Erred In Not Following The Decision Of Hon’Ble

Section 143(1)Section 154Section 56

firm, as the share of profits is exempt from tax under section 10(2A) of the Act in the hands of the partner, disallowance under section 14A of the Act is attracted in respect of such income. The relevant portion of the judgement is reproduced below for ready reference ... from which he received share of profit not taxable in his hands, interest relatable to borrowed funds utilized in firm was to be disallowed under section 14A of the Act. 4) Hoshang D. Nanavati Vs ACIT [2012] 16 ITR(T) 614 (Mumbai - Trib.): In this case, it has been held

M/S. Dosch Pharmaceuticals Pvt Ltd, Mumbai vs. ACIT-9(3)(1), Mumbai

In the result, the appeal by the assessee is partly allowed

ITA 1480/MUM/2023[2015-16]Status: DisposedITAT Mumbai27 Jul 2023AY 2015-16

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Jose PulikkodanFor Respondent: Smt. Mahita Nair
Section 115JSection 142(1)Section 143(2)Section 14ASection 154Section 250Section 36

circumstances of the case and in law, the Ld CIT(A) has erred in upholding the decision of the Assessing Officer that disallowance under Section 14A of the IT, Act 1961 read with Rule 8D of the IT Rules 1962, amounting to Rs.9,02,01,185/- is to be considered ... income under section 36 of the Act of Rs. 3,11,19,218. In response thereto, the above disallowance was shown as disallowance under section 14A of the Act as the amount of expenditure directly related to exempt income being interest on loans taken for investment in mutual funds. However

DCIT, Circle-7(1)(1), Mumbai vs. M/S. Mahan Synthetic Textile Pvt Ltd, Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 1376/MUM/2023[2013-14]Status: DisposedITAT Mumbai27 Jul 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vipul JainFor Respondent: Smt. Mahita Nair
Section 115JSection 142(1)Section 143(2)Section 143(3)Section 14ASection 250

ground that may be necessary at the time of hearing.” 3. The only dispute raised by the Revenue is against the deletion of disallowance under section 14A of the Act. 4. The brief facts of the case as emanating from the record are: The assessee is engaged in the business ... disallowed any sum under section 14A of the Act. Accordingly, the assessee was asked to show cause as to why the disallowance under section 14A read with Rule 8D be not made and M/s. Mahan Synthetics Textiles Pvt. Ltd. ITA no.1376/Mum./2023 added to the total income of the assessee

DCIT 3(2), Mumbai vs. Idea Cellular Ltd, Mumbai

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

ITA 3674/MUM/2014[2009-10]Status: DisposedITAT Mumbai27 Jul 2023AY 2009-10

Bench: Shri Vikas Awasthy & Shri Gagan Goyal

For Appellant: Shri J. D. Mistry /Manish PadhiarFor Respondent: Shri T. Shankar, CIT-DR
Section 194Section 250Section 40

Energy Development Company Ltd. [2017] 84 taxmann.com 186/250 Taxman 174/399 ITR 483 (wherein it has been held that no disallowance under section 14A of the Act can be made if the assessee had not earned any exempt income), as the revenue has not been accepted the said decision

Idea Cellular Limited, Mumbai vs. Dy. Comm of Income Tax-Circle 3(2), Mumbai

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

ITA 3424/MUM/2014[2009-10]Status: DisposedITAT Mumbai27 Jul 2023AY 2009-10

Bench: Shri Vikas Awasthy & Shri Gagan Goyal

For Appellant: Shri J. D. Mistry /Manish PadhiarFor Respondent: Shri T. Shankar, CIT-DR
Section 194Section 250Section 40

Energy Development Company Ltd. [2017] 84 taxmann.com 186/250 Taxman 174/399 ITR 483 (wherein it has been held that no disallowance under section 14A of the Act can be made if the assessee had not earned any exempt income), as the revenue has not been accepted the said decision

Income Tax Officer Ward - 1(1)(1), Surat vs. V R Surat Pvt. Ltd. Formerly Known As M/S Dhanlaxmi Infrastructure Pvt. Ltd., Surat

In the result, cross objection filed by the assessee (in CO

ITA 329/SRT/2022[2015-16]Status: DisposedITAT Surat27 Jul 2023AY 2015-16

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.329/Srt/2022 Assessment Year: (2015-16) (Physical Hearing) Income Tax Officer, Ward- Vs. V R Surat Pvt. Ltd. 1(1)(1), Surat, Room No.111, 1St (Formerly Known As M/S. Floor, Aayakar Bhawan, Majura Dhanlaxmi Infrastructure Pvt. Gate, Surat-395001 Ltd.,).F. No.29, Virtuous Retail, Surat Dumas, Nr. Dumas Resort, Magdalla, Surat– 395007 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaccd5578R (Assessee) (Respondent) ""या"ेप. सं./Co No.16/Srt/2022 [Arising Out Of Ita No.329/Srt/2022] Assessment Year: (2015-16)

Section 14Section 143(3)

interest funds were available with the company to meet the amount of investment. Further, as per the decision of jurisdictional High Court no disallowance under section 14A of the Act is warranted if the assessee had surplus fund for making investment: “It is not in dispute that the amount ... established that the interest free funds were utilized by the assessee for making investment, income from which is exempt from tax. Accordingly, the disallowance under section 14A of the Act is warranted in the case of the assessee for the Assessment Year under consideration.” [Emphasis Supplied]” 23. We note that

DCIT, Circle-14(1)(1), Mumbai vs. M/S Priviege Industries Ltd, Mumbai

ITA 1292/MUM/2023[2012-2013]Status: DisposedITAT Mumbai26 Jul 2023AY 2012-2013

Bench: Shri Prashant Maharishi & Shri Kuldip Singhassessment Year: 2012-13

For Appellant: Shri Nimesh Thar, A.RFor Respondent: Shri H.M. Bhatt, Sr. A.R
Section 143(3)Section 14A

scrutiny proceedings the Assessing Officer(AO) noticed that the assessee has shown investment of Rs.5,53,34,993/-. The assessee worked out its disallowance under section 14A read with 8D to the tune of Rs.2,76,675/-. However the AO disagreed with the disallowance made by the assessee and computed

Wns Global Services Private Limited, Mumbai vs. Assistant Comm. of Income Tax -14(1)(2), Mumbai

ITA 2451/MUM/2022[2017-18]Status: DisposedITAT Mumbai26 Jul 2023AY 2017-18

Bench: Vikas Awasthy () & Ms. Padmavathy S. ()

Section 143(1)Section 143(3)Section 14ASection 234CSection 43BSection 92C

account of purchase of shares of the AE Disallowance of depreciation on Ground No.11 Ground No.7 intangibles representing acquisition of business contract Disallowance under section 14A Ground No.12 Ground No.8 Disallowance under section Ground No.13 Ground No.9 36(1)(va) Disallowance under section 43B Ground No.14 Ground No.10 Short credit ... Assessing Officer passed the draft assessment order incorporating the transfer pricing adjustment. Besides the transfer pricing adjustment, the Assessing Officer also made a disallowance under section 14A to the tune of Rs.5,47,14,762/- and also made an addition on account of disallowance depreciation on intangible assets amounting

Wns Global Services Private Limited, Mumbai vs. Assistant Comm. of Income Tax-14(1)(2), Mumbai

ITA 2450/MUM/2022[208-2019]Status: DisposedITAT Mumbai26 Jul 2023

Bench: Vikas Awasthy () & Ms. Padmavathy S. ()

Section 143(1)Section 143(3)Section 14ASection 234CSection 43BSection 92C

account of purchase of shares of the AE Disallowance of depreciation on Ground No.11 Ground No.7 intangibles representing acquisition of business contract Disallowance under section 14A Ground No.12 Ground No.8 Disallowance under section Ground No.13 Ground No.9 36(1)(va) Disallowance under section 43B Ground No.14 Ground No.10 Short credit ... Assessing Officer passed the draft assessment order incorporating the transfer pricing adjustment. Besides the transfer pricing adjustment, the Assessing Officer also made a disallowance under section 14A to the tune of Rs.5,47,14,762/- and also made an addition on account of disallowance depreciation on intangible assets amounting

ITO, Ward- 16(4), New Delhi vs. Mission Holding Pvt. Ltd. (Formerly Known As Feedback Holding), New Delhi

In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed

ITA 6242/DEL/2018[2013-14]Status: DisposedITAT Delhi26 Jul 2023AY 2013-14

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaasstt. Year: 2013-14

For Appellant: NoneFor Respondent: Dr. Maninder Kaur, Sr. DR
Section 14A

been filed by the assessee against & ITA No. 1113/Del/2018 the order dated 30.11.2017. Since in both the years the issue pertains to disallowance under section 14A therefore the same were heard together and are being disposed of by way of consolidated order. 2. Brief facts qua the issue raised ... interest paid is purely revenue expenditure. He accordingly treated the entire interest expenses of Rs. 35,86,47,745/- and he computed the disallowance under section 14A at Rs. 37,29,54,271/-. 3. The Ld. CIT (A) has deleted the addition after observing and holding as under

ACIT, Circle- 17(1), New Delhi vs. Modi Rubber Ltd., New Delhi

In the result the appeal of the Revenue is dismissed

ITA 4864/DEL/2018[2011-12]Status: DisposedITAT Delhi26 Jul 2023AY 2011-12

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaasstt. Year: 2011-12

For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Dr. Maninder Kaur, Sr. Dr
Section 143(3)Section 14ASection 37(1)

automotive tyres, tubes and flaps. The Assessing Officer has made ad-hoc disallowance of business expenditure of Rs. 6,91,20,350/- and disallowance under section 14A of Rs. 79,39,020/-. The Assessing Officer has made ad-hoc disallowance on the following expenses in the following manner:- Particulars Expense ... deleting the addition is upheld. Consequently ground No. 1 raised by the Revenue is dismissed. 6. In so far as disallowance under section 14A, the brief facts are that assessee has earned divided income of Rs. 3,35,50,000/- and profit on sale of shares

Mission Holdings Pvt. Ltd., New Delhi vs. ACIT, Circle- 6(2), New Delhi

In the result, the appeal of the Revenue is dismissed and the appeal of the assessee is allowed

ITA 1113/DEL/2018[2014-15]Status: DisposedITAT Delhi26 Jul 2023AY 2014-15

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaasstt. Year: 2013-14

For Appellant: NoneFor Respondent: Dr. Maninder Kaur, Sr. DR
Section 14A

been filed by the assessee against & ITA No. 1113/Del/2018 the order dated 30.11.2017. Since in both the years the issue pertains to disallowance under section 14A therefore the same were heard together and are being disposed of by way of consolidated order. 2. Brief facts qua the issue raised ... interest paid is purely revenue expenditure. He accordingly treated the entire interest expenses of Rs. 35,86,47,745/- and he computed the disallowance under section 14A at Rs. 37,29,54,271/-. 3. The Ld. CIT (A) has deleted the addition after observing and holding as under

M/S. Bhatia Global Trading Ltd., Indore vs. The DCIT 1(1), Indore

In the result, appeal of assessee is partly allowed

ITA 247/IND/2017[2012-13]Status: DisposedITAT Indore26 Jul 2023AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanibhatia Global Trading Ltd. Dcit 1(1) Through Official Liquidator Indore Old Cia Building, 1St Floor Vs. Opp. G.P.O. Residency Area, Indore (Appellant / Assessee) (Respondent/ Revenue) Pan: Aaacb6751 C Assessee By None Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 10.05.2023 Date Of Pronouncement 26 .07.2023

Section 143(3)Section 144C(13)Section 144C(5)Section 14A

this Court in PCIT vs. IL & FS Energy Development Company Ltd., 2017 SCC Online Del 9893 (wherein it has been held that no disallowance under Section 14A of the Act can be made if the assessee had not earned any exempt income), as the revenue has not been accepted

Schott Poonawalla Private Limited, Mumbai vs. CIT(Appeals) NFAC, Mumbai

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

ITA 1576/MUM/2023[2017-18]Status: DisposedITAT Mumbai25 Jul 2023AY 2017-18

Bench: Shri Pavan Kumar Gadale & Ms. Padmavathy S Schottpoonawallapvtltd, Cit(A)/Nfac, 13, 1St Floor,Plot.No.228, Aayakar Bhavan, बनाम/ Mittal Chambers, M.K.Road, Vs. Barristerrajnipatelmarg, Mumbai-400020. Nariman Point, Mumbai-400021. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaack2310G (""थ" / Respondent) (अपीलाथ" /Appellant)

For Appellant: Shri. Subhash S Shetty.ARFor Respondent: Shri. Avinash Karpe.DR
Section 115JSection 143(2)Section 14ASection 250

claimed that disallowance made under section 14A was as per books of account attributable to earning of exempt income Assessing Officer made disallowance under section 14A read with rule 8D(2)(ii) of interest expenditure - Whether provision under section 14A(2) does not empower Assessing Officer to apply 7 Schott ... exempt income nor had recorded any satisfaction that working of inadmissible expenditure under section 14A was incorrect, interest expenditure could not be disallowed under section 14A read with rule 8D(2)(ii) - Held, yes [Para 11] [In favour of assessee] We respectfully following the ratio of the decision and direct

Iwi Stationary Pvt. Ltd., Mumbai vs. ACIT, Circle- 3(2)(1), Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 1572/MUM/2023[2014-15]Status: DisposedITAT Mumbai20 Jul 2023AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 132Section 143(1)Section 148Section 14ASection 68

claimed the same as exempt. He noticed that the assessee worked out the 3 IWI Stationary Pvt. Ltd. disallowance under section 14A at Rs. 10,000/-. The Assessing Officer took the view that the disallowance should have been computed as per the provisions of rule 8D of the Income