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“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
46
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
44
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
29
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
28
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
26
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
18
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

Coal India Limited, Kolkata vs. DCIT, Circle - 5(1), Kolkata

ITA 467/KOL/2018[2012-13]Status: DisposedITAT Kolkata20 Jan 2026AY 2012-13

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 250

which has been claimed to be exempt as income u/s. 10(34) of the Income Tax Act. The assessee has not offered any disallowance u/s. 14A in respect of earning of exempt income. During the assessment proceedings, the assessee company was asked why disallowance u/s. 14A would not be made ... Page 28 ITA Nos.: 466, 622, 467, 623/KOL/2018 & 1406, 1696, 1407, 1697/KOL/2019 AYs: 2011-12 to 2014-15 M/s. Coal India Ltd. 2. “Disallowance u/s 14A - Under normal provisions and under 115BJ (Department's Ground, AY 2011-12, 2012-13, 2013-14 and 2014-15) 2.1 This ground of appeal

Balkrishna Rathi Finance Private Limited, Pune vs. ITO, Pune

In the result, appeal of the assessee is allowed

ITA 2328/PUN/2025[2016-17]Status: DisposedITAT Pune19 Jan 2026AY 2016-17

Bench: SHRI VINAY BHAMORE (Judicial Member)

Section 143(3)Section 14ASection 250

disallowance made u/s.14A read with Rule 8D for A.Y.2016-17. The relevant paragraph 6 of the assessment order is reproduced here as under : “6. Disallowance u/s 14A RWR AD of the IT Rule 1962- 6.1 On verification of balance sheet, it is seen that there has made investments in unquoted/quoted equties ... No.2328/PUN/2025 [A] and thus, disallowance of proportionate interest as per the working given in the Rule 8D gets attracted. Hence, the disallowance u/s 14A RWR 8D is being made as per the working below: Computation of Disallowance u/s 14A RWR 8D : 1 Disallowance as per clause clause

Datamatics Global Services Ltd, Mumbai vs. DCIT-1(3)(1), Mumbai

In the result, the appeal is allowed for statistical

ITA 5945/MUM/2025[2020-21]Status: DisposedITAT Mumbai19 Jan 2026AY 2020-21

Bench: Shri Anikesh Banerjee

For Appellant: Ms. Pallavi Talavlikar,ARFor Respondent: Shri Umashankar Prasad, (CIT DR)
Section 143(3)Section 14A

investment, income from which does not or shall not form part of total income.Thus, the AO was directed to recalculate the total disallowance u/s 14A read with rule 8D by taking 1% of the annual average of the monthly averages of the opening and closing balances of the value ... orders of the authorities below. 7. We have carefully considered the facts of the case.It is evident that the issue of disallowance u/s 14A r.w Rule 8D has already been set aside before the AO by the ld.CIT(A) giving specific directions.The AO is accordingly required to reexamine the claim

Deputy Commissioner of Income Tax, Central Circle-20, Jhandewalan vs. Sterling Agro Industries Limited, Delhi

In the result Appeal of the Revenue for Assessment Year 2018-

ITA 4716/DEL/2025[2020-21]Status: DisposedITAT Delhi16 Jan 2026AY 2020-21

Bench: Yogesh Kumar U.S. & Shrimanish Agarwal

Section 115BSection 143(3)Section 144BSection 14ASection 80Section 80I

deduction u/s 80-1A of the Act under normal provisions of the Income Tax Act of Rs. 26,22,32,988/-, disallowed u/s 14A of the Act under normal provisions of the Income Tax Act 6,56,442/-, disallowed on account ofICDS application ... Limited Vs CIT (372 ITR 694) and CIT Vs. Holcim India (P) Ltd (2014) 272 CTR 282(Delhi), wherein it was held that disallowance U/s 14A of the Act cannot be more than the exempt income. Thus, sought for dismissal of the Appeal. 9. We have heard both the parties

Deputy Commissioner of Income Tax, Central Circle-20, Jhandewalan vs. Sterling Agro Industries Limited, Delhi

In the result Appeal of the Revenue for Assessment Year 2018-

ITA 4714/DEL/2025[2018-19]Status: DisposedITAT Delhi16 Jan 2026AY 2018-19

Bench: Yogesh Kumar U.S. & Shrimanish Agarwal

Section 115BSection 143(3)Section 144BSection 14ASection 80Section 80I

deduction u/s 80-1A of the Act under normal provisions of the Income Tax Act of Rs. 26,22,32,988/-, disallowed u/s 14A of the Act under normal provisions of the Income Tax Act 6,56,442/-, disallowed on account ofICDS application ... Limited Vs CIT (372 ITR 694) and CIT Vs. Holcim India (P) Ltd (2014) 272 CTR 282(Delhi), wherein it was held that disallowance U/s 14A of the Act cannot be more than the exempt income. Thus, sought for dismissal of the Appeal. 9. We have heard both the parties

Deputy Commissioner of Income Tax, Central Circle-20, Jhandewalan vs. Sterling Agro Industries Limited, Delhi

In the result Appeal of the Revenue for Assessment Year 2018-

ITA 4713/DEL/2025[2017-18]Status: DisposedITAT Delhi16 Jan 2026AY 2017-18

Bench: Yogesh Kumar U.S. & Shrimanish Agarwal

Section 115BSection 143(3)Section 144BSection 14ASection 80Section 80I

deduction u/s 80-1A of the Act under normal provisions of the Income Tax Act of Rs. 26,22,32,988/-, disallowed u/s 14A of the Act under normal provisions of the Income Tax Act 6,56,442/-, disallowed on account ofICDS application ... Limited Vs CIT (372 ITR 694) and CIT Vs. Holcim India (P) Ltd (2014) 272 CTR 282(Delhi), wherein it was held that disallowance U/s 14A of the Act cannot be more than the exempt income. Thus, sought for dismissal of the Appeal. 9. We have heard both the parties

Outsourcepartners International Private Limited, New Delhi vs. DCIT Circle- 19(1), Delhi

ITA 5975/DEL/2024[2018-19]Status: DisposedITAT Delhi16 Jan 2026AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmanassessment Year: 2018-19 Dcit, Vs. Outsourcepartners Circle-19(1), International Pvt. Ltd., Delhi 414, 4Th Foor, Dlf Jasola Tower-B, Plot No. 10 & 11, Dda District Centre Jasola, New Delhi Pan: Aaaco5734C (Appellant) (Respondent) With Assessment Year: 2018-19 Outsourcepartners Vs. The Assessment Unit, International Pvt. Ltd., Income Tax Department 414, 4Th Foor, Dlf Jasola [Jao-Dcit, Circle-19(1), Tower-B, Plot No. 10 & 11, Delhi] Dda District Centre Jasola, New Delhi Pan: Aaaco5734C (Appellant) (Respondent)

Section 143(3)Section 14A

Nos.5808/Del/2024 & 5975/Del/2024 appreciating that it was disregarded by various Courts. Without prejudice, it is stated that the AO erred in making disallowance u/s 14A that exceeded actual exempt income earned by the appellant. 7.1 The appellant has filed detailed submission explaining the legal position. Reference is made to decision ... past several years. No direct or indirect expenses have been incurred on salaries of employees or borrowings. Without prejudice, it is submitted that disallowance u/s 14A cannot exceed exempt income. 7.2 I have considered the submission and oral arguments carefully. The AO noted that the assessee had made investment

DCIT, Circle- 19(1), Delhi vs. Outsourcepartners International Pvt. Ltd., Delhi

ITA 5808/DEL/2024[2018-19]Status: DisposedITAT Delhi16 Jan 2026AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmanassessment Year: 2018-19 Dcit, Vs. Outsourcepartners Circle-19(1), International Pvt. Ltd., Delhi 414, 4Th Foor, Dlf Jasola Tower-B, Plot No. 10 & 11, Dda District Centre Jasola, New Delhi Pan: Aaaco5734C (Appellant) (Respondent) With Assessment Year: 2018-19 Outsourcepartners Vs. The Assessment Unit, International Pvt. Ltd., Income Tax Department 414, 4Th Foor, Dlf Jasola [Jao-Dcit, Circle-19(1), Tower-B, Plot No. 10 & 11, Delhi] Dda District Centre Jasola, New Delhi Pan: Aaaco5734C (Appellant) (Respondent)

Section 143(3)Section 14A

Nos.5808/Del/2024 & 5975/Del/2024 appreciating that it was disregarded by various Courts. Without prejudice, it is stated that the AO erred in making disallowance u/s 14A that exceeded actual exempt income earned by the appellant. 7.1 The appellant has filed detailed submission explaining the legal position. Reference is made to decision ... past several years. No direct or indirect expenses have been incurred on salaries of employees or borrowings. Without prejudice, it is submitted that disallowance u/s 14A cannot exceed exempt income. 7.2 I have considered the submission and oral arguments carefully. The AO noted that the assessee had made investment

Apex Urban Infrastructure Private Limited, Hyderabad vs. DCIT, Central Circle-2(3), Hyderabad

Accordingly, we herein direct the AO to vacate the disallowance of Rs. 13,200/- made by him. The Grounds of appeal Nos. 2 and 3 are allowed in terms of our aforesaid observations

ITA 1778/HYD/2025[2017-18]Status: DisposedITAT Hyderabad13 Jan 2026AY 2017-18

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.1778/Hyd/2025 (िनधा"रण वष"/Assessment Year:2017-18) Apex Urban Infrastructure Vs. Dcit, Private Limited, Central Circle-2(3), Hyderabad. Hyderabad. Pan: Aafcp1027Q (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri P. Murali Mohan Rao, Ca राज" व "ारा/Revenue By: Shri K. Vinoth Kannan, Sr. Ar सुनवाई की तारीख/Date Of Hearing: 06/01/2026 घोषणा की तारीख/Date Of 13/01/2026 Pronouncement: आदेश / Order Per. Ravish Sood, J.M: The Present Appeal Filed By The Assessee Company Is Directed Against The Order Passed By The Commissioner Of Income Tax (Appeals)- 12, Hyderabad, Which In Turn Arises From The Order Passed By The Assessing Officer (For Short, “Ao”) Under Section 143(3) Of The Income Tax Act, 1961 (For Short, “The Act”), Dated 31/10/2019 For The Assessment Year (Ay) 2017-18. The Assessee Company Has Assailed The Impugned Order Of The Cit(A) On The Following Grounds Of Appeal Before Us:

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri K. Vinoth Kannan, Sr
Section 143(3)Section 14ASection 14A(2)Section 250Section 37Section 37(1)

interest is allowable as a deduction u/s 37(1) of the Act. 5. The Ld. CIT(A) had grossly erred in confirming the disallowance u/s 14A r.w. Rule 8D of Rs. 30,05,833/- without appreciating the fundamental precondition (existence of exempt income during the year) for invoking section 14A

Veedol Corporation Limited, Kolkata vs. DCIT, Circle 4(1), Kolkata

The appeal of the assessee is partly allowed

ITA 1945/KOL/2025[2017-2018]Status: DisposedITAT Kolkata13 Jan 2026AY 2017-2018

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm Dcit, Circle 4(1) Veedol Corporation Limited Aaykar Bhawan Poorva, Yule House, 8, Dr. Rajendra 8Th Floor, P-7, Chowringhee Prasad Sarani, Kolkata-700001, Vs. Square, Kolkata-700069, West Bengal West Bengal (Appellant) (Respondent) Pan No. Aabct1122C Assessee By : Shri Anup Sinha, Ar Revenue By : Shri Bonnie Debbarma, Dr Date Of Hearing: 29.10.2025 Date Of Pronouncement: 13.01.2026

For Appellant: Shri Anup Sinha, ARFor Respondent: Shri Bonnie Debbarma, DR
Section 10(34)Section 14A

Corporation Limited; A.Y. 2017-18 during the year. Therefore, we find merit in the plea of the assessee that if at all the disallowance u/s 14A is to be made that has to be restricted to an amount calculated on the basis of these investments which yielded exempt income only ... Apex Court has held that the explanation to Section 115JB (2) of the Act has not provided any provision for addition of disallowance u/s 14A read with Rule 8D of the rules and the ld. AO is not empowered to add back the disallowance under the provision while calculating

Roshan Agarwal, Sikkim vs. DCIT, Central Circle 3(2), Gangtok

ITA 1743/KOL/2025[2021-2022]Status: DisposedITAT Kolkata13 Jan 2026AY 2021-2022

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 10Section 143(2)Section 250

apply to ITA Nos. 1740, 1741 & 1742/Kol/2025. The issues raised in ITA No. 1741 & 1742/Kol/2025 in respect of short-term capital gain and disallowance u/s 14A of the Act are also covered in favour of the assessee as the income from all sources in the State of Sikkim is exempt

Roshan Agarwal, Sikkim vs. DCIT, Central Circle 3(2), Gangtok

ITA 1742/KOL/2025[2017-2018]Status: DisposedITAT Kolkata13 Jan 2026AY 2017-2018

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 10Section 143(2)Section 250

apply to ITA Nos. 1740, 1741 & 1742/Kol/2025. The issues raised in ITA No. 1741 & 1742/Kol/2025 in respect of short-term capital gain and disallowance u/s 14A of the Act are also covered in favour of the assessee as the income from all sources in the State of Sikkim is exempt

Roshan Agarwal, Sikkim vs. DCIT, Central Circle 3(2), Gangtok

ITA 1741/KOL/2025[2015-2016]Status: DisposedITAT Kolkata13 Jan 2026AY 2015-2016

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 10Section 143(2)Section 250

apply to ITA Nos. 1740, 1741 & 1742/Kol/2025. The issues raised in ITA No. 1741 & 1742/Kol/2025 in respect of short-term capital gain and disallowance u/s 14A of the Act are also covered in favour of the assessee as the income from all sources in the State of Sikkim is exempt

Roshan Agarwal, Sikkim vs. DCIT, Central Circle 3(2), Gangtok

ITA 1740/KOL/2025[2014-2015]Status: DisposedITAT Kolkata13 Jan 2026AY 2014-2015

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 10Section 143(2)Section 250

apply to ITA Nos. 1740, 1741 & 1742/Kol/2025. The issues raised in ITA No. 1741 & 1742/Kol/2025 in respect of short-term capital gain and disallowance u/s 14A of the Act are also covered in favour of the assessee as the income from all sources in the State of Sikkim is exempt

Roshan Agarwal, Sikkim vs. DCIT, Central Circle 3(2), Gangtok

ITA 1739/KOL/2025[2013-2014]Status: DisposedITAT Kolkata13 Jan 2026AY 2013-2014

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 10Section 143(2)Section 250

apply to ITA Nos. 1740, 1741 & 1742/Kol/2025. The issues raised in ITA No. 1741 & 1742/Kol/2025 in respect of short-term capital gain and disallowance u/s 14A of the Act are also covered in favour of the assessee as the income from all sources in the State of Sikkim is exempt

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 2037/KOL/2019[2015-16]Status: DisposedITAT Kolkata12 Jan 2026AY 2015-16

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition ... restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1248/KOL/2019[2014-15]Status: DisposedITAT Kolkata12 Jan 2026AY 2014-15

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition ... restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1247/KOL/2019[2013-14]Status: DisposedITAT Kolkata12 Jan 2026AY 2013-14

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition ... restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1246/KOL/2019[2012-13]Status: DisposedITAT Kolkata12 Jan 2026AY 2012-13

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition ... restrict expenses for the investments which actually yielded dividend income to the assessee company during the year for determination of actual disallowance u/s. 14A of the Act. 6. That on the facts and the circumstances of the case, the Ld. CIT(A) erred in correct in restricting the Addition

Narendra Sevantilal Parikh (HUF), Mumbai vs. Income Tax Officer Ward, 25(3)(1), Mumbai

In the result, Assessee’s appeal is allowed

ITA 5233/MUM/2025[2014-15]Status: DisposedITAT Mumbai12 Jan 2026AY 2014-15

Bench: Shri Narender Kumar Choudhryassessment Year: 2014-15

For Appellant: Shri Dharan Gandhi a/w Ms. VinitaFor Respondent: Shri Praveen K. Srivastav, Sr. D.R
Section 142Section 143Section 147Section 148Section 17Section 250

during the year. 14. Details of income claimed exempt in computation of total income, if any, and working of disallowance u/s 14A r. w. s Rule 8D, if any as to income claimed exempt. 15. Details of Expenses covered u/s 43B of the IT Act relevant to Asstt. Year