“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

Asit C. Mehta Investment Intermediates Limited, Mumbai vs. DCIT 4(1)(1), Mumbai

In the result, the appeal filed by the Appellant for the Assessment Year 2012-13 (ITA No

ITA 3550/MUM/2016[2012-13]Status: DisposedITAT Mumbai26 Sept 2022AY 2012-13

For Appellant: Shri Yogesh Thar/For Respondent: Shri Achal Sharma

Section 143(3)Section 14ASection 154Section 37

that the Appellant has earned exempt dividend income of INR 6,20,419/- during the relevant previous year and therefore, the amount of disallowance under Section 14A of the Act cannot exceed the same in view of the judgment of Hon‟ble Supreme Court in the case of DCIT ... merit in the contention advanced by the Learned Authorised Representative for Appellant that investment made in foreign subsidiary should be excluded while computing disallowance under Section 14A read with Rule 8D of the Rules since the dividend income of foreign subsidiaries is taxable in India and therefore, the Assessing Officer

Asst CIT Cir 2(2)(1), Mumbai vs. The Indian Hotels Companies Ltd, Mumbai

In the result, appeal of the Assessee is partly allowed whereas the appeal of the Revenue is dismissed

ITA 2408/MUM/2015[2010-11]Status: DisposedITAT Mumbai26 Sept 2022AY 2010-11

For Appellant: Sh. Kanchan Kaushal, Sh. PratikFor Respondent: Dr. Yogesh Kamat

Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 14ASection 36(1)(iii)Section 40Section 92C

under Section 14A of the Income-tax Act, 1961 ('the Act'). It is prayed that the learned AO be directed to compute the disallowance under Section 14A of the Act as per law.” 10. The Ground No. 7 raised by the Assessee is directed against disallowance of INR.7 ... Assessee. Accordingly, we direct the Assessing Officer to verify the investment which yielded exempt income during the year and re-compute disallowance under Section 14A read with Rule 8D(2)(iii) of the Rules by taking into consideration only the investments which yielded exempt income during the previous year

The Indian Hotels Company Ltd, Mumbai vs. Asst CIT Cir 2(2)(1), Mumbai

In the result, appeal of the Assessee is partly allowed whereas the appeal of the Revenue is dismissed

ITA 2348/MUM/2015[2010-11]Status: DisposedITAT Mumbai26 Sept 2022AY 2010-11

For Appellant: Sh. Kanchan Kaushal, Sh. PratikFor Respondent: Dr. Yogesh Kamat

Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 14ASection 36(1)(iii)Section 40Section 92C

M/S. Awas Developers & Constructions P. Ltd., Mumbai vs. Dy CIT, CC-5(4), Mumbai

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

ITA 342/MUM/2021[2012-13]Status: DisposedITAT Mumbai23 Sept 2022AY 2012-13

Bench: Shri Baskaran B R& Shri Pavan Kumar Gadalem/S. Awas Developers Vs. Deputy Commissioner & Constructions Pvt. Of Income Tax, Central Ltd. Circle 5(4) Room No. 6, 3Rd Floor, Mumbai-400021 Capri, Anant Kanekar Marg, Bandra East, Mumbai-400051 Pan No. Aadca0702D Appellant .. Respondent

Section 143(2)Section 143(3)Section 147Section 148Section 14A

respect of the notices, the CIT(A) has confirmed the validity of reassessment proceedings and the action of the Assessing Officer in making disallowance under Section 14A of the Act and dismissed the assessee’s appeal. Aggrieved by the order CIT(A), the assessee has filed an appeal with

Assistant Commissioner of Income Tax, Central Circle-3(1), Chennai vs. M/S. Bgr Energy Systems, Chennai

In the result, both the appeals filed by the Revenue are dismissed

ITA 29/CHNY/2021[2016-17]Status: DisposedITAT Chennai21 Sept 2022AY 2016-17

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. Nos.28 & 29/Chny/2021 िनधा"रण वष"/Assessment Years: 2014-15 & 2016-17 The Assistant Commissioner Of Vs. M/S. Bgr Energy Systems Limited, Income Tax, Corporate Office, Guna Complex, Central Circle 3(1), 433, Anna Salai, Teynampet, Chennai. Chennai 600 018. [Pan:Aabcg2202J] (अपीलाथ" /Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By Shri G. Johanson, Addl. Cit : ""थ" की ओर से/Respondent By Mrs. Sandhyaarti, T., Fca : सुनवाई की तारीख/ Date Of Hearing 13.09.2022 : घोषणा की तारीख /Date Of Pronouncement : 21.09.2022 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Revenue Are Directed Against Different Orders Of The Ld. Commissioner Of Income Tax (Appeals) 18, Chennai, Both Dated 14.09.2020 Relevant To The Assessment Years 2014-15 & 2016-17. 2. Both The Appeals Filed By The Assessee Are Delayed By 55 Days In Filing The Appeal Before The Tribunal Due To Outbreak Of Covid-19

Section 115JSection 143(3)Section 14ASection 3

exempt. The income from these investments are tax free and hence the expenditure incurred in relation to earning income should have been disallowed under section 14A r.w. Rule 8D. Further, the assessee has met huge interest expenditure and the interest expenditure in relation to earning exempt income ... average investments on shares & funds worked out at ₹.1,81,83,141/- was not considered for the purpose of disallowance under section 14A of the Act in the assessment order passed under section 143(3) r.w.s. 153(B(1)(b) of the Act on 31.03.2016. Accordingly, the ld. CIT directed

Assistant Commissioner of Income Tax, Central Circle-3(1), Chennai vs. M/S. Bgr Energy Systems, Chennai

In the result, both the appeals filed by the Revenue are dismissed

ITA 28/CHNY/2021[2014-15]Status: DisposedITAT Chennai21 Sept 2022AY 2014-15

Section 115JSection 143(3)Section 14ASection 3

The Asstt Commissioner of Income Tax, Central Circle-5(4), Mumbai vs. Wadhwa Construction and Infrastructure Ltd, Mumbai

In the result, all the appeals of the assessee as well as learned Assessing Officer are dismissed

ITA 851/MUM/2022[2014-15]Status: DisposedITAT Mumbai21 Sept 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Jitendra Jain, ARFor Respondent: Shri Ajay Singh, DR

Section 132Section 153ASection 194ISection 2Section 40Section 69C

required to be deducted thereon and therefore, same was allowed to be carried forward in work-in-progress. b. With respect to the disallowance under Section 14A of the Act, it was found that assessee has only earned exempt income of ₹65,197/- whereas the disallowance of expenditure ... learned CIT (A). Accordingly, these ground nos. 1 to 5, are dismissed. 036. Ground no. 6 to 8 with respect to the disallowance under Section 14A of the Act. The Assessing Officer disallowed ₹21,08,798/- however the learned CIT (A) restricted it to the extent of exempt income earned

ACIT Central Cir 5(4), Mumbai vs. M/S. Wadhwa Construction & Infrastructure Pvt. Ltd, Mumbai

In the result, all the appeals of the assessee as well as learned Assessing Officer are dismissed

ITA 631/MUM/2022[2015-16]Status: DisposedITAT Mumbai21 Sept 2022AY 2015-16

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Jitendra Jain, ARFor Respondent: Shri Ajay Singh, DR

Section 132Section 153ASection 194ISection 2Section 40Section 69C

M/S Wadhwa Construction and Infrastructure Pvt Ltd, Mumbai vs. DCIT Central Circle 5(4), Mumbai

In the result, all the appeals of the assessee as well as learned Assessing Officer are dismissed

ITA 585/MUM/2022[2016-17]Status: DisposedITAT Mumbai21 Sept 2022AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Jitendra Jain, ARFor Respondent: Shri Ajay Singh, DR

Section 132Section 153ASection 194ISection 2Section 40Section 69C

M/S Wadhwa Construction and Infrastruction Pvt Ltd, Mumbai vs. DCIT, Central Circle 5(4), Mumbai

In the result, all the appeals of the assessee as well as learned Assessing Officer are dismissed

ITA 584/MUM/2022[2015-16]Status: DisposedITAT Mumbai21 Sept 2022AY 2015-16

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Jitendra Jain, ARFor Respondent: Shri Ajay Singh, DR

Section 132Section 153ASection 194ISection 2Section 40Section 69C

ACIT Cent. Cir 5(4), Mumbai vs. M/S. Wadhwa Construction & Infrastructure Pvt. Ltd, Mumbai

In the result, all the appeals of the assessee as well as learned Assessing Officer are dismissed

ITA 227/MUM/2022[2016-17]Status: DisposedITAT Mumbai21 Sept 2022AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Jitendra Jain, ARFor Respondent: Shri Ajay Singh, DR

Section 132Section 153ASection 194ISection 2Section 40Section 69C

M/S. Ukn Properties Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 1739/BANG/2019[2013-14]Status: DisposedITAT Bangalore16 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 14ASection 56(2)(vii)

India) Ltd., [2022] 141 taxmann.com 289 has considered the issue of disallowance u/s.14A when there is no exempt income and held that no disallowance under section 14A of the Act could be made if no exempt income was earned by the assessee. The relevant part of the judgment

M/S Bosch Limited, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 1629/BANG/2018[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Bosch Limited, Vs. The Assistant Commissioner Hosur Road, Adugodi, Of Income Tax, Ltu, Bangalore – 560 030. Circle 1, Pan: Aaacm 9840P Bangalore. Appellant Respondent Appellant By : Shri Percy Pardiwala, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 01.09.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.2. This Appeal Is Against The Order Of The Cit(Appeals), Bangalore-9, Bangalore Dated 31.3.2018 For The Assessment Year 2013- 14. 3. The Assessee Raised Grounds Pertaining To The Following Issues:- Deduction U/S. 35(2Ab) Computed On Net Expenditure As Opposed To Gross Expenditure Disallowance Of Provision For Bad & Doubtful Debts I) Disallowance Of Provision For Long Term Service Award Disallowance Of Expenditure U/S. 14A Of The Act Ii) Page 2 Of 67

For Appellant: Shri Percy Pardiwala, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 14ASection 35Section 37Section 43BSection 80J

Rules, 1962 ("the Rules"). 5.2. That the CIT(A) ought to have appreciated that the Appellant had voluntarily computed the expenditure to be disallowed under Section 14A, and in the absence of lack of satisfaction expressed by the Respondent that the claim of the Appellant was incorrect, the same cannot ... income are made out of own funds and therefore the assessee has not incurred any financial cost. It is therefore submitted that the disallowance under section 14A is not warranted. 33. The ld. DR relied on the orders of the lower authorities 34. We have considered the rival submissions

Titan Industries Limited, Hosur vs. JCIT, Chennai

The appeal stands partly allowed in terms of our above order

ITA 2239/CHNY/2012[2008-09]Status: DisposedITAT Chennai09 Sept 2022AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri T. Suryanarayana (Sr. Advocate) for Ms. Manasa Ananthan (Advocate) - Ld. ARFor Respondent: Dr. S. Palani Kumar (CIT) –Ld. DR

Section 143(3)Section 14ASection 92A(1)

determining the royalty income and consequently making an adjustment computation of tax. B. Non-transfer pricing adjustments Ground 2: Disallowance under section 14A of the Act Rs. 263,415 a. The leaned DRP has erred in confirming the order of the AO by disallowing expenses under section 14A

M/S. Arshiya Rail Infrastucture Ltd., Mumbai vs. Dy CIT - CC-6(4), Mumbai

In the result appeal by the assessee is allowed

ITA 574/MUM/2021[2012-13]Status: DisposedITAT Mumbai09 Sept 2022AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Sandeep Singh Karhail

For Appellant: Shri Piyush Chhajed a/wFor Respondent: Shri Mehul Jain

Section 115Section 139(1)Section 142(1)Section 143Section 143(2)Section 143(3)Section 147Section 148Section 14ASection 153C

assessee, in pursuant of aforesaid notices, assessment order under section 143(3) of the Act was passed by the Assessing Officer after making disallowance under section 14A read with rule 8D. Similarly, order under section 153C r/w section 143 (3) of the Act was passed. However, after the expiry

Toyota Tsusho India Private Limited, Ramanagara vs. The Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is allowed in favour of the assessee

ITA 175/BANG/2022[2017-18]Status: DisposedITAT Bangalore09 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Darpan Kriplani, CAFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

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

provide for disallowance of expenses incurred in connection with the earning of exempt income and it is clear that the precondition for disallowance under section 14A is that the assessee should have earned exempt income during the year which is not included in the total income of the assessee. Further ... submitted that the assessee had also made submissions before the lower authorities that the company had not earned any exempt income and thus disallowance under section 14A of the Act was unwarranted by pointing out that disallowance under section 14A of the Act is not attracted since the assessee

Chatwani and Shah Private Limited, Mumbai vs. Dy CIT Central Circle(1)(2), Mumbai

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

ITA 1482/MUM/2022[2014-2015]Status: DisposedITAT Mumbai07 Sept 2022AY 2014-2015

Bench: The Tribunal.

Section 14A

Assessing Officer noticed that the assessee has not disallowed any amount as required by section 14A of the Act. Accordingly he computed disallowance under section 14A of the Act read with rule 8D of the I.T. Rules at Rs. 3,33,776/-, which consisted of interest disallowance ... Accordingly, we set aside the order passed by learned CIT(A) on this issue and direct the Assessing Officer to restrict the disallowance under section 14A of the Act to Rs. 25,000/- of the Act. 7. In the result, appeal filed by the assessee is partly allowed. Order pronounced

Deputy Commissioner of Income Tax - Central Circle-1(3), Bangalore vs. M/S. Manyata Promoters Private Limited (Erstwhile Embassy Office Parks Private Limited ), Bangalore

In the result, the assessee’s appeal is allowed for statistical purposes, while the revenue’s appeal is dismissed

ITA 573/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri V S Chakrapani, CIT(DR)

Section 115JSection 143(2)Section 14ASection 154Section 232

Gokaldas Images Pvt Ltd. [2020] 122 taxmann.com 160 (Karnataka), as per which the book profits cannot be enhanced on the basis of disallowance under Section 14A of the Act. So the addition made by the AO to book profits is deleted.” ITA Nos. 548 & 573/Bang/2022 Page

M/S. Manyata Promoters Private Limited (Erstwhile Embassy Office Parks Private Limited Since Merged With Manyata Promoters Private Limited), Bangalore vs. Joint Commissioner of Income Tax (OSD)- Central Circle-1(3), Bangalore

In the result, the assessee’s appeal is allowed for statistical purposes, while the revenue’s appeal is dismissed

ITA 548/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri V S Chakrapani, CIT(DR)

Section 115JSection 143(2)Section 14ASection 154Section 232

Millennium Alcobev Pvt. Ltd., Bengaluru vs. ACIT, Co. Circle - IV (3), Chennai

In the result, all the appeals stand partly allowed

ITA 217/CHNY/2020[2007-08]Status: DisposedITAT Chennai05 Sept 2022AY 2007-08

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri D. Anand (Advocate) – Ld. ARFor Respondent: Shri AR V Sreenivasan (Addl. CIT) –Ld. DR

Section 143(3)Section 14ASection 40A(2)

your Appellant in full. 5. The Commissioner of Income tax (Appeals) erred in sustaining a portion of the administrative expenses in determining the disallowance under Section 14A of the Income tax Act, 1961 of a sum of Rs.2,10,93,548/-in the absence of any exempt income ... Commissioner of Income tax (Appeals) erred in sustaining the disallowance under Section 14A in the absence of any exempt income received by the Appellant herein for the relevant previous year. 7. The Commissioner of Income (Appeals) erred in sustaining the disallowance at 50% of administrative expenses on an estimated