“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

ACIT, Circle- 17(2), New Delhi vs. National Fertilizers Ltd., New Delhi

Appeal are dismissed

ITA 3698/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Sept 2021AY 2014-15

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 145Section 14ASection 32Section 37(1)Section 40

decision of the Hon’ble High Court. In the present assessee’s case also, no exempt income was earned during the year, thus, disallowance u/s 14A of the Act will not be applicable. Hence, Ground No. 5 and 6 of the Revenue’s appeal are dismissed. 23. As regards Ground

ACIT, Circle- 17(2), New Delhi vs. National Fertilizers Ltd., New Delhi

Appeal are dismissed

ITA 3697/DEL/2018[2013-14]Status: DisposedITAT Delhi30 Sept 2021AY 2013-14

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 145Section 14ASection 32Section 37(1)Section 40

National Fertilizers Ltd., New Delhi vs. DCIT, Circle- 17(2), New Delhi

Appeal are dismissed

ITA 3438/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Sept 2021AY 2014-15

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 145Section 14ASection 32Section 37(1)Section 40

National Fertilizers Ltd., New Delhi vs. DCIT, Circle- 17(2), New Delhi

Appeal are dismissed

ITA 3437/DEL/2018[2013-14]Status: DisposedITAT Delhi30 Sept 2021AY 2013-14

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 145Section 14ASection 32Section 37(1)Section 40

DCIT, Circle- 12(1), New Delhi vs. Ifci Ltd., New Delhi

The appeal of the Department stands dismissed

ITA 2895/DEL/2018[2012-13]Status: DisposedITAT Delhi30 Sept 2021AY 2012-13

Section 115JSection 14A

completed at an income of Rs.1,52,19,72,150/- after making disallowance of deprecation amounting to Rs.1,09,18,928/- and disallowance U/s 14A of the DCIT vs. IFCI Ltd. Act amounting to Rs.8,12,64,498/-. The book-profit was computed at Rs.5,58,38,84,160/- after ... making disallowance u/s 14A amounting to Rs.8,12,64,498/-. 2.1 Aggrieved, the assessee approached the Ld. First Appellate Authority challenging the action of the Assessing Officer in making an addition to book-profits of the assessee by the amount disallowed U/s 14A of the Act. The Ld. First Appellate

Addl.CIT, Special Range-4, New Delhi vs. Infres Methodex Pvt. Ltd., New Delhi

The appeal of the Department stands partly allowed for statistical purpose

ITA 1126/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Sept 2021AY 2014-15

Section 14ASection 14A(1)

Officer also made certain other additions pertaining to (i) claim of depreciation ACIT vs. Infres Methodex Pvt. Ltd., amounting to Rs.60,557/- (ii) disallowance U/s 14A of the Income Tax Act, 1961 (hereinafter called ‘the Act’) amounting to Rs.2,73,665/- (iii) disallowance of Club expenses amounting to Rs.55 ... direct and proximate nexus between “expenditure incurred” and “earning of exempt income” 6. Whether the CIT(A) is legally justified in not upholding disallowance u/s 14A of the Income Tax Act, 1961 without considering legislative intent of introducing section 14A by the Finance Act, 2001 as clarified by CBDT Circular

DCIT, Circle-11(1), New Delhi vs. Hero Corporate Services Pvt. Ltd., New Delhi

The appeal of the Department stands allowed for statistical purposes

ITA 4341/DEL/2017[2011-12]Status: DisposedITAT Delhi30 Sept 2021AY 2011-12

Section 143(3)Section 14A

Department are as under:- “1. Whether on the facts & Circumstances of case, the Id. CIT(A) was correct in deleting the disallowance u/s 14A r.w.r. 8D ignoring the fact that the assessee company didn't produce the specific documents in the shape of scripts of the mutual funds/shares ... invest which may yield exempt income. 2. Whether on the facts & Circumstances of case, the Ld. CIT(A) was correct in deleting the disallowance u/s 14A r.w.r 8D even without indentifying the investment which is not related to exempt income. 3. Whether on the facts & Circumstances of case

DCIT, Circle- 1(1), Gurgaon vs. Dlf Universal Ltd., Gurgaon

In the result, the appeal of the Revenue is dismissed

ITA 2180/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Sept 2021AY 2014-15

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Satyajeet Goel, CAFor Respondent: Shri J.K. Mishra, CIT-DR

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

exempt income after observing and holding as under: “3.3 I have carefully considered the appellant’s submissions. The appellant has contended that the disallowance u/s 14A if any cannot exceed the exempt income in terms of the various judicial decisions submitted by the appellant. I agree with this contention ... read with section 14A of the IT Act. The appellant contended during the course of appellate proceedings before the CIT (A) that the disallowance u/s 14A over and above the amount of tax free income earned is legally not tenable. The CIT (A) observed that the legislation has provided rule

Addlcit, New Delhi vs. M/S Mmtc Ltd., New Delhi

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

ITA 5166/DEL/2016[2010-11]Status: DisposedITAT Delhi29 Sept 2021AY 2010-11

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing) M/S. Mmtc Limited, Vs. Addl. Cit, Core: 1, Scope Complex – 7, Special Range : 6, Industrial Area, Lodhi Road, New Delhi. New Delhi – 110 003. Pan: Aaacm1433E & Addl. Cit, Vs. M/S. Mmtc Limited, Special Range : 6, Core: 1, Scope Complex – New Delhi. 7, Industrial Area, Lodhi Road, New Delhi – 110 003. Pan: Aaacm1433E (Appellants) (Respondents)

For Appellant: Shri Rohit Jain, Advocate; &For Respondent: Ms. Paramita M. Biswas

Section 14ASection 250Section 37(1)Section 43BSection 80G

disallowance of Rs. 10,88,07,784/- u/s 14A of the Act 3. Without prejudice to Ground No. 2, the disallowance u/s 14A has been confirmed by CIT(A) in the absence of any exempt income earned by the appellant ignoring the judgments of Jurisdictional High Court of Delhi ... case and in law, the Learned CIT(A) erred in not deleting a sum of Rs.2,00,000/-, initially offered as disallowable u/s 14A of the Act in the return of income which was withdrawn before CIT(A) in the absence of any exempt income. 5. That on facts

Mmtc Ltd., New Delhi vs. Addl. CIT, New Delhi

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

ITA 5147/DEL/2016[2010-11]Status: DisposedITAT Delhi29 Sept 2021AY 2010-11

For Appellant: Shri Rohit Jain, Advocate; &For Respondent: Ms. Paramita M. Biswas

Section 14ASection 250Section 37(1)Section 43BSection 80G

Hind Industries Ltd., New Delhi vs. DCIT, Circle- 11(2), New Delhi

The appeal of the assessee is dismissed

ITA 2755/DEL/2018[2012-13]Status: DisposedITAT Delhi28 Sept 2021AY 2012-13

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 133(6)Section 14ASection 40Section 40A(3)

Director amounting to Rs.3,45,629/-, disallowance on account of cash purchases u/s 40A(3) amounting to Rs. 60,26,73,064/- and disallowance u/s 14A amounting to Rs. 2,57,35,700/-. 4. Being aggrieved by the penalty order, the assessee filed appeal before

DCIT, Circle- 1, Ltu, New Delhi vs. The Oriental Insurance Co. Ltd., New Delhi

In the result, the order passed by the tribunal dated 09

ITA 5834/DEL/2018[2015-16]Status: DisposedITAT Delhi24 Sept 2021AY 2015-16

Bench: Shri R.K. Panda & Shri Vijay Pal Raoassessment Year: 2015-16 Dcit, Vs The Oriental Insurance Co. Ltd., Circle-1, Ltu, A-25/27, Asaf Ali Road, New Delhi. New Delhi. Pan: Aaact0627R (Appellant) (Respondent) Assessee By : Shri Tarandeep Singh, Ca & Shri Pulkit Verma, Advocate Revenue By : Shri H.K. Chaudhary, Cit, Dr Date Of Hearing : 20.09.2021 Date Of Pronouncement : 24.09.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Revenue Is Directed Against The Order Dated 29Th June, 2018 Of The Cit(A)-22, New Delhi Relating To Assessment Year 2015-16. 2. Ground Of Appeal No.1 Raised By The Revenue Reads As Under:- “1. On The Facts & The Circumstances Of The Case & In Law, Ld. Cit (A) Has Erred In Deleting The Addition Of Rs.25,85,81,755/- Made By The Ao U/S 14A Of The I.T. Act.” 3. Facts Of The Case, In Brief, Are That The Assessee Is A Public Sector Undertaking Of Government Of India & Is In The Business Of Non-Life Insurance. It Filed Its Return Of Income Declaring Total Income Under Normal Provisions Of The Income-Tax Act At A Loss Of Rs.186,97,30,289/- & Book Profit U/S 115Jb I.E., Mat Scheme Of Rs.565,63,58,876/-. During The Course Of Assessment Proceedings, The Ao Noted That The Assessee Has Claimed The Following Income As Exempt:- S. No. Particulars Amount ( □) 1. Interest On Tax Free Public Sector Bonds Exempt Under 4,59,58,525/- Section 10 (15) (Iv) (H) Of The Act 2,04,22,38,227/- 2. Dividend Exempt U/S 10(34) Of The Income Tax Act, 1961 Total 2,08,81,96,752/-

For Appellant: Shri Tarandeep Singh, CA &For Respondent: Shri H.K. Chaudhary, CIT, DR

Section 10Section 10(34)Section 115JSection 14ASection 44

u/s 10(34) of the income tax Act, 1961 Total 2,08,81,96,752/- 4. Since the assessee has not added back disallowance u/s 14A in the computation of total income, the AO asked the assessee to explain as to why disallowance under section 14A r.w. Rule 8D should ... made. Rejecting the various explanations given by the assessee and relying on various decisions, the AO worked out the disallowance u/s 14A r.w.r. 8D of the IT Act at Rs.25,85,81,755/- which was added to the total income of the assessee. 5. In appeal

ACIT, Circle- 4(1), New Delhi vs. Bajaj Resource Ltd., Jaipur

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

ITA 4018/DEL/2018[2014-15]Status: DisposedITAT Delhi24 Sept 2021AY 2014-15

Bench: Shri N.K. Billaiya & Shri Sudhanshu Srivastava

For Appellant: Shri Sandeep Jhanwar, C.AFor Respondent: Shri Bhopal Singh, Sr. DR

Section 14A

circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition made on account of disallowance u/s 14A in accordance with Rule 8D of the I.T. Rules amounting to Rs. 6,85,74,900/-. 2. Whether on the facts and in the circumstances ... appearing in the balance sheet of the assessee on the first day and the last day of the previous year : Rs. 58171.195 lakhs Disallowance u/s 14A r.w.r. 8D (ii) : A*B/C = Rs. 6,06,28.900 11. In addition to the above, the Assessing Officer proceeded to make further addition

Moonrock Hospitality (P) Ltd., New Delhi vs. ACIT Circle-17(1), New Delhi

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

ITA 5895/DEL/2019[2016-17]Status: DisposedITAT Delhi22 Sept 2021AY 2016-17

Bench: Shri R.K. Pandaassessment Year: 2016-17 Moonrock Hospitality (P) Ltd., Vs. Acit, C-561, Defence Colony, Circle-17(1), New Delhi. New Delhi. Pan: Aafcm7112H (Appellant) (Respondent) Assessee By : Dr. Shaswat Bajpai, Advocate & Shri Vishal Aggarwal, Advocate Revenue By : Shri Ramesh Kumar, Sr. Dr Date Of Hearing : 24.08.2021 Date Of Pronouncement : 22.09.2021 Order

For Appellant: Dr. Shaswat Bajpai, Advocate &For Respondent: Shri Ramesh Kumar, Sr. DR

Section 14ASection 36Section 36(1)(iii)

made disallowance of Rs.41,49,856/- u/s 14A and since the assessee company had already offered a sum of Rs.2 lakhs as 2 disallowance u/s 14A in its computation of total income, the AO made addition of the remaining amount of interest expenses of Rs.10,88,438/- u/s

Rlf Ltd., New Delhi vs. ITO, Ward- 20(3), New Delhi

ITA 1523/DEL/2018[2012-13]Status: DisposedITAT Delhi22 Sept 2021AY 2012-13

Bench: Shri Kuldip Singh & Shri Prashant Maharishi

For Appellant: NoneFor Respondent: Ms. Kirti Sankratyayan, Senior DR

Section 14ASection 250Section 250(6)

allowed relief to the appellant vide order No.143/2016-17 (Old appeal no.228/2015-16) dated 06.12.2016 and appeal effect already allowed to the appellant. Therefore, the disallowance u/s 14A of the Act read with rule 8D of the I.T. Rules made by the AO has already been deleted. Therefore, this ground of appeal

Amd Industries Ltd., New Delhi vs. JCIT, Special Range- 1, New Delhi

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

ITA 5308/DEL/2018[2015-16]Status: DisposedITAT Delhi21 Sept 2021AY 2015-16

Bench: Shri N.K. Billaiya & Shri Sudhanshu Srivastava

For Appellant: Shri Suresh K. Gupta, C.AFor Respondent: Shri Bhopal Singh, Sr. DR

Section 14ASection 40Section 40A

decision of the Hon'ble Jurisdictional High Court of Delhi in the case of Caraf Builders and Constructions Pvt Ltd 414 ITR 122, disallowance u/s 14A of the Act cannot exceed exempt income. 9. The ld. DR strongly stated that the assessee itself has suo moto disallowed

ACIT, Circle- 17(1), New Delhi vs. Mlv Credits Holding & Leasing Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6668/DEL/2017[2013-14]Status: DisposedITAT Delhi21 Sept 2021AY 2013-14

Bench: Shri R.K.Panda & Shri Kul Bharatassessment Year : 2013-14 Acit, Vs M/S Modern Mvl Credits Circle-17(1), Holding & Leasing Ltd. New Delhi F-79,/18, Sainik Farm, New Delhi-110062 Pan-Aaacm9072H Appellant Respondent

Section 143(3)Section 14A

legally justified in not holding that application of Rule 8D of the income Tax Rule, 1962 (the Rule) to compute quantum of disallowance u/s 14A of the Act is mandatory? 3. Whether on facts and in circumstances of the case, the Ld.CIT(A) is legally justified in deleting disallowance ... automatic and comes into operation as soon as the dividend income is claimed as exempt. It is further held that for making disallowance u/s 14A, the pre- condition is satisfaction of assessing officer that voluntary disallowance made by assessee is unreasonable and unsatisfactory and in absence of such satisfaction, disallowance

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3559/DEL/2016[2012-13]Status: DisposedITAT Delhi21 Sept 2021AY 2012-13

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha

Section 132Section 153A

investment in shares. The dividend income earned on such shares, are incidental to the main business of the assessee. Therefore, no disallowance u/s 14A can be made and for this view, the appellant has relied upon on the judgment of Karnataka High Court in case of CCI Limited vs. JCIT

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3558/DEL/2016[2011-12]Status: DisposedITAT Delhi21 Sept 2021AY 2011-12

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha

Section 132Section 153A

Security Printing & Minting Corporation of India Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result both the appeals of the assessee are allowed

ITA 3686/DEL/2017[2013-14]Status: DisposedITAT Delhi16 Sept 2021AY 2013-14

Bench: Shri Amit Shukla & Shri N.K. Billaiya

For Appellant: Shri Y.K. Madan, CAFor Respondent: Shri Prakash Dubey, Sr. DR

Section 143(3)Section 14ASection 37

order, therefore, our aforesaid decision will apply mutatis mutandis. This expenditure of Rs. 4,36,40,497/- is allowed. 13. Coming to the disallowance u/s 14A of Rs. 49,82,319/-, we find that in assessment year 2013-14, the Ld. CIT(A) has deleted the said addition on merits ... fund. Ld. AO without examining the assessee’s explanation having regard to the nature of expenditure debited has simply proceeded to make the disallowance u/s 14A read with Rule 8D of Rs. 49,82,310/- which was worked out under rule 8D by deducting 0.5% of the average investment