“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

M/S Ganeshay Overseas Industries Ltd., Chandigarh vs. DCIT, CC-1, Chandigarh

In the result the appeal of the Revenue is dismissed

ITA 200/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh22 Apr 2024AY 2012-13

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Amanpreet Kaur, Sr.DR

Section 14ASection 36(1)(iii)

assessee during the year is of Rs.9,26,400/-. Therefore, in keeping with the above, we hereby direct the AO to restrict the disallowance u/s 14A of the Act to Rs.9,26,400/-. Ground Nos. 1 and 2 are, accordingly, partly accepted. 13. Ground Nos. 3 and 4 deal with

Khurana Engineering Ltd., Ahmedabad vs. The ACIT.(OSD), Circle-1, Ahmedabad

ITA 2357/AHD/2011[2008-09]Status: DisposedITAT Ahmedabad19 Apr 2024AY 2008-09

Bench: Shri Ramit Kochar & Ms. Madhumita Roya.Y. 2007-08

For Appellant: Sh. S.N. Soparkar, Sr. Advocate & Sh. ParinFor Respondent: Sh. Chetram Meena, Sr. DR

Section 143(2)Section 143(3)Section 80I

Thus, presumption will apply that the assessee has invested own interest free funds in the securities/JV which yield exempt income. Thus, no disallowance u/s 14A read with Rule 8D(2)(b) is warranted, as available owned interest free funds with the assessee are much higher than the investments made ... from Hon’ble Gujarat High Court judgment and order in CIT v. Sintex Industries Limited (2017) 82 taxmann.com 171(Guj.HC). So far as disallowance u/s 14A read with Rule 8D(2)(c) to the tune of Rs. 8,97,050/- as was made by AO and later confirmed

The ACIT.(OSD), Circle-1, Ahmedabad vs. Khurana Engineering Ltd., Ahmedabad

ITA 2352/AHD/2011[2008-09]Status: DisposedITAT Ahmedabad19 Apr 2024AY 2008-09

Bench: Shri Ramit Kochar & Ms. Madhumita Roya.Y. 2007-08

For Appellant: Sh. S.N. Soparkar, Sr. Advocate & Sh. ParinFor Respondent: Sh. Chetram Meena, Sr. DR

Section 143(2)Section 143(3)Section 80I

The ACIT.(OSD), Circle-1, Ahmedabad vs. Khurana Engineering Ltd., Ahmedabad

ITA 2308/AHD/2011[2007-08]Status: DisposedITAT Ahmedabad19 Apr 2024AY 2007-08

Bench: Shri Ramit Kochar & Ms. Madhumita Roya.Y. 2007-08

For Appellant: Sh. S.N. Soparkar, Sr. Advocate & Sh. ParinFor Respondent: Sh. Chetram Meena, Sr. DR

Section 143(2)Section 143(3)Section 80I

Hbs Realtors Private Limited, Mumbai vs. DCIT 7(1)(2), Mumbai

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

ITA 3949/MUM/2023[2013-14]Status: DisposedITAT Mumbai18 Apr 2024AY 2013-14

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailhbs Realtors Pvt. Ltd. Vs. Dy. Commissioner Of 505 Ceejay House, Dr. Income Tax- 7(1)(2) Annie Besant Road, Worli Aaykar Bhavan Mumbai – 400018 Mumbai – 400020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaacc1641C Appellant .. Respondent Appellant By : Mandar Vaidya Respondent By : P.D. Chougule Date Of Hearing 16.04.2024 Date Of Pronouncement 18.04.2024 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assessee Is Directed Against The Order Passed By The Ld. Cit(A) Nfac For A.Y. 2013-14. The Assessee Has Raised The Following Grounds Before Us: “1. The Ld. Cit(A) Erred In Treating The Appellant'S Appeal As 'Delayed Solely Because The Appeal, In The First Instance, Was Filed Manually & Not Electronically. 2. The Ld. Cit(A) Misdirected Himself In Not Appreciating That Failure To File The Appeal Electronically, In The First Instance Is, At Best, A Procedural Defect & The Difference Between 'Manual' & 'Electronic' Is, Merely Of Form. 3. The Ld. Cit(A) Was Not, In The Given Circumstances, Justified In Declining To Condone The Delay In Filing The Appeal 4. The Ld. Cit(A) Fell In Error In Not Appreciating That Plurality Of Objects Was Not Precluded In The Purposes Contemplated U/S.11(2) Of The Act.

For Appellant: Mandar VaidyaFor Respondent: P.D. Chougule

Section 11(2)Section 143(2)Section 143(3)Section 14A

issued on 04.09.2014. The assessing officer has finalised the assessment u/s 143(3) of the Act on 21.03.2016 after making disallowance u/s 14A r.w.Rule 8D of the I.T. Rule to the amount of Rs.8,78,278/-. 3. The assessee filed the appeal before

Abhudaya Co-Op Bank Ltd, Mumbai vs. DCIT- 1(1)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 3747/MUM/2023[2018-19]Status: DisposedITAT Mumbai18 Apr 2024AY 2018-19

Section 143(3)Section 14A

31/03/2018 in its accounts. The assessee company has earned Rs.22.97 Crore as exempt Income. The assessee company has suo-moto offered disallowance u/s 14A of Rs.62,590 on basis of certain calculation of man hours put by treasury department for sale of securities during the year and added back ... However, ld. Assessing Officer rejected the assessee’s explanation on the following reasons:- “1. The assessee's suo-moto offering of disallowance u/s 14A itself suggests that the provisions of section 14A are applicable its case 2. The disallowance u/s 14A computed by the assessee is computed without any sound

Teamlease Digital Private Limited, Mumbai vs. Circle 14(1)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2100/MUM/2023[2017-18]Status: DisposedITAT Mumbai18 Apr 2024AY 2017-18

Bench: SHRI AMARJIT SINGH (Accountant Member), SHRI SANDEEP SINGH KARHAIL (Judicial Member)

For Appellant: Dinkle HariyaFor Respondent: P.D. Chougule

Section 143(2)Section 14A

Amarjit Singh (AM): The solitary ground of appeal of the assessee is related to the issue that no disallowance u/s 14A is called for since the assessee has not earned any exempt income. 2. The fact in brief is that return of income declaring total loss at Rs.167 ... made huge investment which may generate exempt income. Therefore, the assessing officer has issued show cause notice to the assessee to explain why disallowance u/s 14A should not be made in its case. The assessee explained that it has not earned any P a g e | 2 Teamlease Degital Private

The Dy.Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad vs. M/S. Cadila Pharmaceuticals Ltd., Ahmedabad

In the result, appeals of the Revenue are dismissed and that of the assessee are allowed for statistical purposes

ITA 76/AHD/2020[2009-10]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2009-10

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, and Shri Parin Shah, Ars

Section 250(6)Section 40Section 9(1)(vii)

facts in deleting the adjustment of Rs.2,71,00,172/- made u/s 115JB of the Act in respect of disallowance u/s 14A of the Act. 76. The issue relates to the adjustment made to the book profits of the assessee on account of expenses disallowed under section 14A

The Dy.Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad vs. M/S. Cadila Pharmaceuticals Ltd., Ahmedabad

In the result, appeals of the Revenue are dismissed and that of the assessee are allowed for statistical purposes

ITA 73/AHD/2020[2008-09]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2008-09

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, and Shri Parin Shah, Ars

Section 250(6)Section 40Section 9(1)(vii)

Cadila Pharmaceuticals Ltd., Ahmedabad vs. The Asst. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

In the result, appeals of the Revenue are dismissed and that of the assessee are allowed for statistical purposes

ITA 52/AHD/2020[2009-10]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2009-10

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, and Shri Parin Shah, Ars

Section 250(6)Section 40Section 9(1)(vii)

Cadila Pharmaceuticals Ltd., Ahmedabad vs. The Asst. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

In the result, appeals of the Revenue are dismissed and that of the assessee are allowed for statistical purposes

ITA 51/AHD/2020[2008-09]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2008-09

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, and Shri Parin Shah, Ars

Section 250(6)Section 40Section 9(1)(vii)

Deputy Commissioner of Income Tax, Chandigarh vs. Essix Biosciences Limited, Chandigarh

In the result, the appeal filed by the Department is

ITA 534/CHANDI/2023[2014-15]Status: DisposedITAT Chandigarh12 Apr 2024AY 2014-15

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Ved Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT-DR

Section 14ASection 201Section 40

over and above the said disallowance of Rs.48,48,048/- made suo-moto by the assessee. While doing so, the AO observed that disallowance u/s 14A of the Act read with Rule 8D of the Rules was being made; that the assessee had made disallowance of Rs.48 ... being considered in computing the disallowance as per Rule 8D. 14.1 The ld. CIT(A) agreed with the assessee's contention that the disallowance u/s 14A of the Act cannot exceed the amount of exempt income earned by the assessee. The Department is aggrieved of this action

Pragya Traders (P)Ltd, Kolkata vs. ITO, Kolkata

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

ITA 521/KOL/2023[2012-13]Status: DisposedITAT Kolkata12 Apr 2024AY 2012-13

Bench: Shri Sonjoy Sarma & Shri Girish Agrawal]

Section 131Section 143(1)Section 143(2)Section 14ASection 68

heard to the party on merits of the case. 9. Ground no. 2 is in relation with passing the impugned order confirmed the disallowance u/s 14A for an amount of Rs. 2,51,750/-. In this connection, the ld. AR submitted that assessee did not earn any exempt income during

Techno Electric & Engineering Company Limited., Noida vs. A.O, C.C-2(1), Kolkata

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

ITA 1124/KOL/2023[2015-16]Status: DisposedITAT Kolkata12 Apr 2024AY 2015-16

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 14A

explained that the investment excluding the investments in subsidiary, from which the company has earned exempt dividend should only be considered for making disallowance u/s 14A. During the course of assessment proceedings assessee company filed its working according to which the amount which could have been disallowed u/s 14A ... ACIT, circle 1(1), Delhi (ITAT Delhi SMC Bench) in ITA No. 2570/Del/2022 3.1. Therefore the ld.A/R requested to reduce the amount of disallowance u/s 14A after considering the amount of investment which had exempt income during the year. 3.2. On the other hand, ld. D/R has relied

Modi Entertainment Ltd vs. DCIT Circle 5 (1)

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

ITA 3051/DEL/2007[2001-2002]Status: DisposedITAT Delhi12 Apr 2024AY 2001-2002

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Rohit Garg, AdvFor Respondent: Sh. Sanjay Kumar, Sr. DR

Section 10(33)Section 115JSection 143(3)Section 14ASection 2Section 4

shares had been purchased out of own funds and there was no nexus between the borrowed funds and investment made in shares. The disallowance u/s 14A has been challenged on this basis and detailed arguments and case laws have been given in this regard. However, in the facts ... appeal on concession. The substantial question of law framed by Hon'ble Delhi High Court clearly shows that the specific issue was whether disallowance u/s 14A was required to be made while computing book profit u/s 115JA/115JB. The Hon'ble Delhi High Court has not only recorded assessee's plea

Axis Bank Limited, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

The appeal of the assessee is partly allowed for statistical purposes

ITA 365/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2018-19

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2018-19 Axis Bank Limited, Vs. Assistant Commissioner Of “Trishul”, 3Rd Floor, Opp. Income-Tax, Samartheshwar Temple, Nr. Law Circle 1(1)(1), Garden, Ellisbridge, Ahmedabad Ahmedabad-380006 Pan : Aaacu 2414 K अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Dr. Darsi Suman Ratnam, Cit-Dr सुनवाई क" तारीख/Date Of Hearing : 29.11.2023/03.04.2024 घोषणा क" तारीख /Date Of Pronouncement: 10.04.2024 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: By Way Of This Appeal, The Assessee-Appellant Has Challenged Correctness Of The Order Dated 28Th July, 2022 Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act” For Short], For The Assessment Year (Ay) 2018-19. 2. Ground No.1 Raised By The Assessee Reads As Under:- “1. Disallowance In Respect Of Annual Technical Fees (Tax Effect - Rs. 16,84,276) 1.1 The Learned Drp Has Erred In Upholding Addition Made By Ao In Respect Of Treating Annual Technical Services (Ats) Fees Paid To Infosys Limited To The Extent Of Rs. 48.66 Lacs As Prior Period Expense. 1.2. It Is Submitted That The Expenditure Relates To Amount Payable To Infosys & No Part Of The Amount Was Claimed As Expenditure At Any Time In The 2 Axis Bank Limited Vs. Acit Ay : 2018-19

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Section 143(3)Section 144C

tune of Rs.48,66,726/-. Ground of appeal No.1 (1.1 to 1.3) is, therefore, allowed. 7. Ground No. 2 reads as under:- “2. Disallowance u/s 14A read with Rule 8D of the Income-tax Act, 1961 (Tax effect Rs.15,08,58,427) 5 Axis Bank Limited Vs. ACIT ... Counsel for the assessee before us was that the law with regards to the invocation of Rule 8D for the purpose of computing disallowance u/s 14A of the Act is settled, that the same can be resorted to only if the Assessing Officer is not satisfied with the correctness

Ajay Alloys (P) Ltd., New Delhi vs. DCIT, Circle- 2(1), New Delhi

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

ITA 5174/DEL/2018[2013-14]Status: DisposedITAT Delhi09 Apr 2024AY 2013-14

Bench: Shri Challa Nagendra Prasad & Shri M Balaganeshआ.अ.सं/.I.T.A No.5174/Del/2018 िनधा"रणवष"/Assessment Year:2013-14 बनाम Ajay Alloy(S) (P) Ltd., Dcit C/O Babubhai & Co., 152, Vs. Circle-2(1), Office Complex, New Delhi. Jhandewalan Extn., Phase-1, New Delhi. Pan No.Aaeca9815E अपीलाथ" Appellant ""यथ"/Respondent

Section 143(3)Section 14ASection 194ASection 234ASection 40

decision of the Hon’ble Jurisdictional High Court in the case of Joint Investments Pvt. Ltd. Vs. CIT [372 ITR 694] submits that disallowance u/s 14A read with Rule 8D cannot exceed exempt income. 4. On the other hand, the Ld. DR submits that an amendment was made ... authorities below. 7. In the case of Joint Investment Pvt. Ltd. Vs. CIT the Hon’ble Jurisdictional High Court held that the disallowance u/s 14A read with Rule 8D cannot exceed more than the exempt income. In so far as the contention of the Ld. DR that the amendment brought

Syama Prasad Mookerjee Port, Kolkata vs. DCIT, Cir. 34, Kolkata

In the result, appeal of the assessee in ITA No

ITA 1412/KOL/2023[2020-21]Status: DisposedITAT Kolkata08 Apr 2024AY 2020-21

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 1411 & 1412/Kol/2023 Assessment Year: 2018-19 & 2020-21 Syama Prasad Mookerjee Port Deputy Commissioner Of Vs Income Tax, Circle -34, 15, Strand Road Kolkata - 700001 Kolkata [Pan : Aaajk0361L] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri K. M. Sundaram, C.A. Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 08/04/2024 आदेश/O R D E R Per Bench : Both These Appeals Are Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre - Delhi (Hereinafter The “Ld. Cit(A)”) Dt. 27/10/2023 For The Assessment Year 2018-19 & Dt. 06/11/2023 For The Assessment Year 2020-21 Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”). 2. The Assessee Has Raised The Following Grounds Of Appeal For Assessment Year 2018-19:- “1. Disallowance Of Rs.68,13,600 U/S 14A R.W.R. 8D(2)(Ii) Is Liable To Be Deleted For The Following Reasons Since The Undisputedly The Appellant Had Nil Exempt Income & That The Entire Investments Are Made In Port Related Strategic Entities Out Of Its Own Funds. A) As Duly Mentioned In Paragraph No.8.7 Of The Impugned Order, The Issue Of Whether The Explanation To Section 14A Inserted W.E.F. 01.04.2022 Is Prospective Or Retrospective Is Not Settled & Hon'Ble High Court Of Delhi Has Held It To Be Applicable Prospectively, Namely W.E.F. Ay 2022-23, Which Subsequent To The Subject Ay 2018-19. 2

For Appellant: Shri K. M. Sundaram, C.AFor Respondent: Shri Rakesh Kumar Das, CIT, D/R

Section 14ASection 250Section 41(1)

furnish additional evidences during the course of appellate proceedings.” 3. The first common issue involved in both these appeals is against the disallowance u/s 14A r.w.r. 8D(2) of the Act. Undisputedly, the assessee had not earned any exempt income during the year. We find that the ratio laid down ... held that the amendment made in Section 14A of the Act by Finance Act, 2022, will be applicable prospectively and also held that disallowance u/s 14A of the Act should not exceed the exempt income earned by the assessee during the year, is squarely applicable and no disallowance is called

Syama Prasad Mookerjee Port, Kolkata vs. DCIT, Cir. 34, Kolkata

In the result, appeal of the assessee in ITA No

ITA 1411/KOL/2023[2018-19]Status: DisposedITAT Kolkata08 Apr 2024AY 2018-19

For Appellant: Shri K. M. Sundaram, C.AFor Respondent: Shri Rakesh Kumar Das, CIT, D/R

Section 14ASection 250Section 41(1)

Il&Fs Maritime Infrastructure Company Limited, Mumbai vs. The Deputy Commissioner of Income Tax-14(1)(1), Mumbai

ITA 3558/MUM/2023[2013-14]Status: DisposedITAT Mumbai08 Apr 2024AY 2013-14

Bench: Shri Vikas Awasthy & Shri Amarjit Singh

For Appellant: Ms. Hetal Vora &For Respondent: H.M. Bhatt

Section 143(2)Section 14A

consideration, Page 2 ITA No.3558/Mum/2023 IL & FS Maritime Infrastructure Company Ltd. Vs. The DCIT, 14(1)(1) 1.2. The appellant states that the disallowance u/s 14A of the Act can fall below suo-moto disallowance made in the return of income under a wrong belief. 1.3. The Appellant prays before ... notice u/s 143(2) of the Act was issued on 03.09.2014. During the course of assessment in response to query for making disallowance u/s 14A r.w.rule 8D of the I.T. Rule the assessee submitted that no disallowance should be made u/s 14A of the Act as the assessee