“disallowance u/s 14A”

DisallowancesSection 14ASection 14A2,938 judgments

The decision most relied on for disallowance u/s 14A is CIT v. Corrtech Energy (P.) Ltd. (223 Taxmann 130), cited in 579 judgments on BharatTax.

Leading authorities on disallowance u/s 14A

CIT v. Corrtech Energy (P.) Ltd.

223 Taxmann 130 · 2014 · High Court

579

citing judgments

Disallowance under Section 14A read with Rule 8D is not warranted if the assessee has not earned any exempt income in the relevant assessment year.

CIT v. Gem Plus Jewellery India Ltd.

330 ITR 175 · 2011 · High Court

207

citing judgments

Disallowances made under various sections, such as for PF/ESIC contributions, result in an increase in business profits, and these enhanced profits are eligible for deduction under Sections 10A and 10AA. Similarly, gains from foreign exchange fluctuations directly linked to export sales are also eligible for deduction under Section 10A.

Cargo Motors (P.) Ltd. v. DCIT

145 Taxmann.com 641 · 2022 · High Court

citing judgments

The disallowance under Section 14A read with Rule 8D, particularly Rule 8D(iii) for administrative expenses, should only consider investments that have actually yielded exempt income during the relevant assessment year. Section 14A empowers the Assessing Officer to determine expenditure related to income not forming part of total income.

Sobha Developers Ltd. v. DCIT

125 Taxmann.com 72 · 2021 · High Court

citing judgments

Disallowance under section 14A is a notional disallowance and cannot be added back while computing Book Profits under section 115JB for Minimum Alternate Tax purposes.

Tata Industries Ltd. v. ITO

181 TTJ 600 · 2016 · ITAT

citing judgments

Disallowance under Section 14A cannot exceed the exempt income earned by the assessee. Even if interest expenditure is considered, it cannot be solely attributed to earning exempt dividend income as investors also consider potential capital gains.

PCIT v. J.J. Glastronics (P.) Ltd.

139 Taxmann.com 375 · 2022 · High Court

citing judgments

Additions made under Section 14A of the Income-tax Act, read with Rule 8D, cannot be considered for computing book profit under Section 115JB of the Act.

M/s.Bajaj Allianz General Insurance Co. Ltd. v. ACIT

38 DTR 282 · 2010 · Reported

citing judgments

Section 14A of the Income-tax Act is not applicable to insurance businesses governed by specific provisions of Section 44 and Schedule 1. Profit on sale of investments by insurance companies is not taxable, especially after the deletion of sub-rule (b) of Rule 5 of the First Schedule.

PCIT v. Dipesh Lalchand Shah

143 Taxmann.com 419 · 2022 · High Court

citing judgments

Disallowance under section 14A cannot be made if the assessee has not earned any exempt income in the relevant assessment year. This applies even if the assessee has made investments in shares or has income from a partnership that is negative.

Judgments citing disallowance u/s 14A

DCIT, Bangalore vs. M/S Robert Bosch Engineering & Business Solutions Private Limited, Bangalore

In the result, the appeal filed by assessee stands allowed as indicated above and the appeal filed by revenue stands dismissed

ITA 445/BANG/2016[2011-12]Status: DisposedITAT Bangalore02 Feb 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 608/Bang/2016 Assessment Year : 2011-12 M/S. Robert Bosch The Deputy Engineering & Business Commissioner Of Solutions Pvt. Ltd., Income Tax, #123, Industrial Layout, Large Tax Payers Unit, Hosur Road, Koramangala, Circle 1, Bangalore – 560095. Vs. Bangalore. Pan: Aaacr7108R Appellant Respondent & It(Tp)A No. 445/Bang/2016 Assessment Year : 2011-12 (By Revenue) : Shri Percy Padiwala, Sr. Assessee By Advocate : Shri Sumer Singh Meena, Cit Revenue By Dr (Osd) Date Of Hearing : 20-12-2021 Date Of Pronouncement : 02-02-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By Assessee As Well As Revenue Against The Final Assessment Order Dated 28.01.2016 By The Ld.Dcit, Ltu, Circle -1, Bangalore U/S. 143(3) R.W.S. 144C Of The Act For Assessment Year 2011-12. In Revenue’S Appeal, The Following Grounds Are Raised. “1. The Directions Of Drp Is Opposed To Law & Facts Of The Case.

Section 10ASection 143(3)Section 144CSection 14ASection 80J

Disallowance of other Expenses= One half percent of average value of investments =0.5 % x Rs 103,45,40,304 = Rs 51,72,702 Disallowance u/s 14A = Rs 51,72,702 This amount, Rs 51,72,702 is telescoped into the amount of Rs 15,70,919 already admitted as allocation ... view that the disallowance may be estimated to meet the requirements of sec.14A of the Act. Accordingly, we estimate the disallowance u/s 14A at Rs.2.00 lakhs and in our view, the same would meet the requirements of the provisions of sec.14A of the Act. Accordingly, we set aside the order

J.M. Baxi &Co., Mumbai vs. The Dy CIT -CC-6(4), Mumbai

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

ITA 755/MUM/2021[2017-18]Status: DisposedITAT Mumbai31 Jan 2022AY 2017-18

Bench: Us:

For Appellant: Y.P. TrivediFor Respondent: S.N. Kabra

Section 143(2)Section 143(3)Section 37Section 37(1)

motto disallowed an amount of Rs.40,000/- u/s 14A being expenditure attributable to exempt income. However, the assessing officer has computed the disallowance u/s 14A r.w.rule 8D of the I.T. Rules 1962 to the amount of Rs.15,83,888/- and after reducing Rs.40,000/- suo motto disallowance, balance disallowance

Hathway Investment Pvt Ltd., Mumbai vs. Asst CIT Circle-12 (2)(2), Mumbai

In the result, appeal of the assessee is partly allowed, in terms aforesaid

ITA 7106/MUM/2019[2012-13]Status: DisposedITAT Mumbai31 Jan 2022AY 2012-13

For Appellant: Sh. Vijay MehtaFor Respondent: Ms. Smitha Nair

Section 143(3)Section 14A

assessee at Rs. 28,96,745/-. 11. We are of considered view that if by virtue of law expounded by Courts the disallowance u/s 14A is reduced below suo-moto disallowance made by the assessee, there would not be any impediment in assessee getting the benefit. 12. Similar issue ... issue in favour of assessee by observing as under: “The last grievance under these appeal is of the assessee as to whether the disallowance u/s 14A can fall below disallowance suo motu voluntarily made by the assessee in the return of income filed with the Revenue. The assessee has claimed

Tanglin Developments Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(3), Bangalore

In the result, assessee’s appeals are allowed

ITA 146/BANG/2021[2017-18]Status: DisposedITAT Bangalore31 Jan 2022AY 2017-18

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri C Ramesh, C.AFor Respondent: Shri Jairam Raipura, CIT(DR OSD)

Section 43A

funds far exceed the value of investments, it should be considered that investments have been made out of interest free funds and no disallowance u/s. 14A towards any interest expenditure can be made. This view was again confirmed by the Hon’ble Bombay High Court in CITv. HDFC Bank ... allowed. 59. Next ground in ITA No.144/Bang/2021 to 146/Bang/2021 in AY 2014-15, 2015-16 and 2017-18 is with regard to disallowance u/s 14A of the Income-tax Act r.w. Rule 8D(2)(ii) of the Rules 1963. 59.1 We consider the facts in AY 2014-15. DISALLOWANCE U/S.14A

Tanglin Developments Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(3), Bangalore

In the result, assessee’s appeals are allowed

ITA 145/BANG/2021[2015-16]Status: DisposedITAT Bangalore31 Jan 2022AY 2015-16

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri C Ramesh, C.AFor Respondent: Shri Jairam Raipura, CIT(DR OSD)

Section 43A

Tanglin Developments Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(3), Bangalore

In the result, assessee’s appeals are allowed

ITA 144/BANG/2021[2014-15]Status: DisposedITAT Bangalore31 Jan 2022AY 2014-15

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri C Ramesh, C.AFor Respondent: Shri Jairam Raipura, CIT(DR OSD)

Section 43A

Tanglin Developments Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(3), Bangalore

In the result, assessee’s appeals are allowed

ITA 143/BANG/2021[2013-14]Status: DisposedITAT Bangalore31 Jan 2022AY 2013-14

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri C Ramesh, C.AFor Respondent: Shri Jairam Raipura, CIT(DR OSD)

Section 43A

Universal Stock Brokers P.Ltd, Ghaziabad vs. DCIT, Circle-27(1), New Delhi

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

ITA 2495/DEL/2018[2013-14]Status: DisposedITAT Delhi31 Jan 2022AY 2013-14

Bench: Shri N. K. Billaiyaa N D Shri Amit Shukla(Through Video Conferencing)

For Appellant: Shri Tarun Rohatgi, C. AFor Respondent: Shri Kumar Pranav, Sr. DR

Section 143(3)Section 14A

Expenses being made 2,70,24,275 subjected to 14A. Proportion in which disallowance is to be 4.54% Made (as per Assessee) Further Disallowance u/s 14A. 12,26,902 (Addition / Disallowance : Rs.12,26,902/-) 5. The ld. CIT (Appeals) has confirmed such disallowance. 6. Before us, the ld. Counsel submitted

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 276/DEL/2017[2014-15]Status: DisposedITAT Delhi31 Jan 2022AY 2014-15

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT

Section 115JSection 14A

upheld the stand of the assessee in this regard. Since the major part of the income is derived from shipping business, any disallowance u/s 14A would automatically be allowable while computing income under the tonnage scheme. I find that the CIT(A) for the A.Y. 2007-08 in appeal ... appellant, has not challenged this particular finding of the CIT(A) before ITAT. For the A.Y. 2008-09 also, the disallowance u/s 14A has been upheld. On the other hand the Ld. CIT(A) for the A.Y. 2009-10 to 2011-12 has taken the view that since the appellant

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 1002/DEL/2016[2013-14]Status: DisposedITAT Delhi31 Jan 2022AY 2013-14

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT

Section 115JSection 14A

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 1001/DEL/2016[2012-13]Status: DisposedITAT Delhi31 Jan 2022AY 2012-13

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT

Section 115JSection 14A

Dy CIT - CC-2(3), Mumbai vs. Avinash Nivrutti Bhosale, Pune

In the result, appeal of the assessee is allowed and appeal of the revenue is dismissed for A

ITA 634/MUM/2021[2011-12]Status: DisposedITAT Mumbai28 Jan 2022AY 2011-12

Section 10(38)Section 132Section 153ASection 48

also find that assessee has raised the following additional grounds of appeal:- 1. The learned CIT (A) ought to have held that disallowance u/s 14A of the Act and denial of set off of brought forward long term capital loss against long term capital gain by the Assessing Officer

Tata Realty and Infrastructure Ltd, Mumbai vs. Ast CIT 2(3)(1), Mumbai

ITA 763/MUM/2020[2015-16]Status: DisposedITAT Mumbai28 Jan 2022AY 2015-16

For Appellant: Aarti VissanjiFor Respondent: Sanjeev Kashyap

Section 115JSection 143(2)Section 143(3)

supra. Therefore, this ground of appeal of the assessee is allowed for statistical purposes. ITA No.730/Mum/2020 A.Y. 2015-16 Ground No. 1 & 2: Disallowance u/s 14A of the Income Tax Act, 1961: “On the Ld. CIT(A) has erred in deleting disallowance u/s 14A of the Act without appreciating ... fact that as per CBDT Circular No. 5 of 2014, it was directed that disallowance u/s 14A should be made even if the assesses did not earn am ^exempt income during the previous year. On the facts and in the. circumstances of the case

Jt CIT(OSD) 2(3)(1), Mumbai vs. M/S Tata Realty and Infrastructure Ltd., Mumbai

ITA 730/MUM/2020[2015-16]Status: DisposedITAT Mumbai28 Jan 2022AY 2015-16

For Appellant: Aarti VissanjiFor Respondent: Sanjeev Kashyap

Section 115JSection 143(2)Section 143(3)

Future Enterprises, Mumbai vs. ACIT, Ward-9(3)(2), Mumbai

Appeal of the asessee are dismissed as not pressed

ITA 4342/MUM/2019[2014-15]Status: DisposedITAT Mumbai28 Jan 2022AY 2014-15

For Appellant: Dinkle HariyaFor Respondent: Achal Sharma

Section 115JSection 143(2)Section 14A

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in restricting the disallowance u/s. 14A to the extent or exempt income earned by the assessee which was computed as per Rule 8D of I.T. Rules 1961 on the basis ... made? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in restricting the disallowance u/s. 14A to the extent of exempt income earned by the assessee which is contrary to CBDT Circular No. 5/2014 which clarifies that the Rule

DCIT-9(3)(2), Mumbai vs. Future Corporate Resources Ltd, Mumbai

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

ITA 4145/MUM/2019[2015-16]Status: DisposedITAT Mumbai28 Jan 2022AY 2015-16

For Appellant: Dinkle HariyaFor Respondent: Achal Sharma

Section 115JSection 143(2)Section 14A

Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was right in restricting the disallowance u/s 14A to the extent of exempt income earned by the assessee which is contrary to CBDT Circular No. 5/2014 which clarifies that the Rule ... tune of Rs.6,58,95,608/- and paid huge interest approximately to the amount of Rs.99.63 crores. Consequently, the A.O has worked out disallowance u/s 14A as per Rule 8D of the I.T. Rule to the amount of Rs.10,64,57,609/- and added to the total income

Dy. CIT-9(3)(2), Mumbai vs. M/S Future Enterprises Ltd., Mumbai

Appeal of the asessee are dismissed as not pressed

ITA 3991/MUM/2019[2014-15]Status: DisposedITAT Mumbai28 Jan 2022AY 2014-15

For Appellant: Dinkle HariyaFor Respondent: Achal Sharma

Section 115JSection 143(2)Section 14A

Siemens Ltd, Mumbai vs. DCIT Cir 8(2)(1), Mumbai

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

ITA 1146/MUM/2018[2010-11]Status: DisposedITAT Mumbai28 Jan 2022AY 2010-11

Bench: Shri Pramod Kumar & Shri Pavan Kumar Gadalesiemens Ltd (Successor Vs. Dcit, In Interest To Siemens Corporate Circle - Building Technologies 8(2)(1), Pvt Ltd.,) Room No. 615, 6Th Birla Aurora, Level 20, Floor, Aayakar P.No. 1080, Ar. Annie Bhavan, Mk Road, Besant Road, Worli, Mumbai – 400020. Mumbai – 400030. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacs0764L Appellant .. Respondent

For Appellant: Shri. Nitesh Joshi. ARFor Respondent: Shri. Ajit Pal Singh.DR

Section 143(1)Section 143(2)Section 143(3)

respect of the corporate issues, the Assessing Officer (A.O) has dealt on the facts and law on the deduction U/sec80IB of the Act, disallowance u/s 14A of the Act and Bad Debts written off claim and finally assessed the total income of Rs.38,76,54,136/- and passed the Draft ... total income with addition of TP adjustment of Rs. 2,47,77,068/-, disallowance of bad debts of Rs. 12,99,833/- and disallowance u/s 14A of the Act Rs. 2,07,500/- and passed the order u/s 143(3) r.w.s 144C(13) r.w.s 92CA of the Act dated

Ratna Commercial Enterprises Pvt. Ltd., New Delhi vs. Addl.CIT, Range-21, New Delhi

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

ITA 2086/DEL/2018[2014-15]Status: DisposedITAT Delhi28 Jan 2022AY 2014-15

Bench: Shri R.K. Panda & Shri Amit Shuklaassessment Year: 2014-15 Ratna Commercial Enterprises Pvt. Vs Addl. Cit, Ltd., Range-21, 4Th Floor, Punjabi Bhawan, New Delhi. 10, Rouse Avenue, New Delhi. Pan: Aaacr0354B (Appellant) (Respondent) Assessee By : Shri M.P. Rastogi, Advocate Revenue By : Shri N.K. Bansal, Sr. Dr Date Of Hearing : 29.11.2021 Date Of Pronouncement : 28.01.2022 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 23Rd January, 2018 Of The Cit(A)-7, New Delhi, Relating To Assessment Year 2014-15. 2. The Grounds Of Appeal No. 1 & 2 Raised By The Assessee Are As Under:- “1. That Both The Ld. Cit(A) & Ld. Ao Erred In Law & In Facts In Disallowance Of Rs.1,08,69,547/- U/S 14A In A Mechanical Way Without Appreciating The Facts That The Assessee Himself Has Disallowed Rs 2.41 Lakhs & That There Cannot Be Any Further Disallowance U/S 14A Without A Cogent Reason. 2. That Both The Ld. Cit(A) & Ld. Ao Erred In Law & In Facts In Appreciating That Strategic Investments In Dabur India Limited As The Promoter Shareholder, Would Not Form Part Of Disallowance U/S 14A.”

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri N.K. Bansal, Sr. DR

Section 14A

mechanical way without appreciating the facts that the assessee himself has disallowed Rs 2.41 lakhs and that there cannot be any further disallowance u/s 14A without a cogent reason. 2. That both the Ld. CIT(A) and Ld. AO erred in law and in facts in appreciating that strategic investments ... Dabur India Limited as the promoter shareholder, would not form part of disallowance u/s 14A.” 3. Facts of the case, in brief, are that the assessee company is an NBFC company and engaged in trading of units of various mutual funds and conducting investment activities in shares and fixed maturity

Ircon International Ltd., New Delhi vs. Addl.CIT, Special Range- 4, New Delhi

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

ITA 7155/DEL/2017[2013-14]Status: DisposedITAT Delhi28 Jan 2022AY 2013-14

Bench: Sh. A. D. Jaindr. B. R. R. Kumar

For Appellant: Sh. Rakesh Gupta, Adv. &For Respondent: Ms. Meenakshi J. Goswami, CIT(DR)

Section 801ASection 80I

consideration, respectfully following the findings of the co-ordinate bench, we direct the Assessing Officer to allow deduction u/s 80IA of the Act. Disallowance u/s 14A: 5. During the year, the assessee had income from tax free bonds of Rs.12.39 crores and claimed the same as exempt u/s ... same ratio applies. The appeal of the revenue on this ground is dismissed. ITA No. 2401 & Ors 18 M/s. Ircon International Ltd. DTAA Disallowance u/s 14A: 25. The appeal of the revenue on this ground is dismissed in view of the ratio laid down with regard to the income through