“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 1, Kumbakonam vs. City Union Bank Ltd., Kumbakonam

In the result, appeal filed by the revenue for assessment year 2017-18 is partly allowed for statistical purposes

ITA 1418/CHNY/2019[2015-16]Status: DisposedITAT Chennai11 Mar 2024AY 2015-16

Bench: Shri V. Durga Rao, Hon’Ble & Shri Manjunatha. G, Hon’Bleआयकर अपील सं./Ita Nos.: 1120 & 1121/Chny/2019 िनधा"रण वष" / Assessment Years: 2015-16, 2016-17 M/S. City Union Bank Ltd., Asst. Commissioner Of Income- Administrative Office V. Tax, “Narayana” Circle -1, 24-B, Gandhi Nagar, Kumbakonam. Kumbakonam- 612 001. [Pan: Aaacc-1287-E] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं./Ita No.: 672/Chny/2020 िनधा"रण वष" / Assessment Year: 2017-18 M/S. City Union Bank Ltd., Deputy Commissioner Of Administrative Office V. Income-Tax, “Narayana” Circle -2(1), 24-B, Gandhi Nagar, Trichy. Kumbakonam- 612 001. [Pan: Aaacc-1287-E] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं./Ita Nos.: 1418 & 1419/Chny/2019 िनधा"रण वष" / Assessment Years: 2015-16, 2016-17 Asst. Commissioner Of M/S. City Union Bank Ltd., Income-Tax, V. Administrative Office “Narayana” Circle -1, 24-B, Gandhi Nagar, Kumbakonam. Kumbakonam- 612 001. [Pan: Aaacc-1287-E] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं./Ita No.: 636/Chny/2020 िनधा"रण वष" / Assessment Year: 2017-18 Deputy Commissioner Of M/S. City Union Bank Ltd., Income-Tax, V. Administrative Office “Narayana” Circle -2(1), 24-B, Gandhi Nagar

For Respondent: Shri. Nilay Baran Som, CIT

stated in their appellate order dated 18.02.2018, partly allowed appeal filed by the assessee, where the ld. CIT(A) deleted additions made towards disallowance u/s. 14A r.w.r. 8D of I.T. Rules, 1962, excess depreciation on ATMs, accrued interest on NPA, accrued interest on government securities and additions towards income assessed

City Union Bank Limited, Kumbakonam vs. ACIT Circle 1, Kumbakonam

In the result, appeal filed by the revenue for assessment year 2017-18 is partly allowed for statistical purposes

ITA 1121/CHNY/2019[2016-17]Status: DisposedITAT Chennai11 Mar 2024AY 2016-17

For Respondent: Shri. Nilay Baran Som, CIT

City Union Bank Limited, Kumbakonam vs. ACIT Circle 1, Kumbakonam

In the result, appeal filed by the revenue for assessment year 2017-18 is partly allowed for statistical purposes

ITA 1120/CHNY/2019[2015-16]Status: DisposedITAT Chennai11 Mar 2024AY 2015-16

For Respondent: Shri. Nilay Baran Som, CIT

The West Coast Paper Mills Ltd, Mumbai vs. Addl CIT RG 1(3), Mumbai

In the result, application for corrigendum is allowed accordingly

ITA 3746/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Mar 2024AY 2008-09

Section 115JSection 14ASection 80I

sale of fixed asset and investments in computing book profit u/s 115JB 1 to 6 Deduction u/s 80IA of the Dismissed Act 7 Disallowance u/s 14A Dismissed 8 Addition of unutilized Dismissed Modvat Credit to the value of closing stock of raw material M/s. West Coast Paper Mills ... Disallowance u/s 14A Decided in favour while computing Book of the revenue profit u/s 115JB 3. Accordingly, the aforesaid grounds when there were no dispute and were mutually agreed upon, are decided according to the earlier order. 4. In the result, application for corrigendum is allowed accordingly. (B.R. BASKARAN) JUDICIAL

DCIT 1(3), Mumbai vs. The West Coast Paper Mills Ltd, Mumbai

In the result, application for corrigendum is allowed accordingly

ITA 3564/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Mar 2024AY 2008-09

Bench: SHRI B R BASKARAN (Accountant Member), SHRI AMIT SHUKLA (Judicial Member)

Section 115JSection 14ASection 80I

Mansarover Tradex Limited, New Delhi vs. ITO, Ward-16(3), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1654/DEL/2021[2017-18]Status: DisposedITAT Delhi11 Mar 2024AY 2017-18

Bench: Shri M. Balaganesh & Shri Yogesh Kumar Usmansarover Tradex Ltd, Vs. Ito, 28, Najafgarh Road, Ward-16(3), New Delhi New Delhi (Appellant) (Respondent) Pan: Aaacm0211C Assessee By : Shri Rohit Jain, Adv Ms. Tejasvi Jain, Ca Revenue By: Shri Kanv Bali, Sr. Dr Date Of Hearing 12/12/2023 Date Of Pronouncement 11/03/2024

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Kanv Bali, Sr. DR

Section 143(3)Section 14A

That in the facts and circumstances of the case and in law the Id. CIT(A) has grossly erred in confirming the disallowance u/s 14A of Rs 39,61,865/-. 3.1. The lower authorities have erred in enhancing/confirming the disallowance u/s 14A without pointing out as to how the disallowance ... made by the appellant was incorrect. 3.2 Without prejudice, the lower authorities have erred in disregarding the settled law that the disallowance u/s 14A cannot exceed the exempt income.” 3. We have heard the rival submissions and perused the material available on record. The assessee is a Non-Banking Finance

DCIT (Ltu) 2, Mumbai vs. Asian Paints Ltd, Mumbai

In the result, the appeal by the Revenue is partly allowed for statistical purposes

ITA 2959/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Mar 2024AY 2015-16

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Fenil Bhatt a/wFor Respondent: Shri Vachashpati Tripathi

Section 10Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 37(1)

cost in respect of the time spent by its employees on carrying out the investment-related activity, which has been computed as under: Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Employee Designation Percentage Cost to Value of Company disallowance Chief Financial Officer 5% Senior Manager

Asian Paints Limited, Mumbai vs. Dy. CIT Ltu, Mumbai

In the result, the appeal by the Revenue is partly allowed for statistical purposes

ITA 1673/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Mar 2024AY 2015-16

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Fenil Bhatt a/wFor Respondent: Shri Vachashpati Tripathi

Section 10Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 37(1)

The Dy CIT, Central Cir.-6(4), Mumbai vs. Arshiya Ltd., Mumbai

In the result, the Ground no

ITA 1925/MUM/2020[2017-18]Status: DisposedITAT Mumbai06 Mar 2024AY 2017-18

Bench: Justice (Rtd.) C.V. Bhadang () & Shri B.R. Baskaran (Am)

Section 14A

rendered by Hon'ble Delhi High Court in the case of Chem invest Ltd. (supra) and other case laws to hold that no disallowance u/s 14A is warranted, when the assessee has not earned any exempt income. We notice that the Hon’ble jurisdictional Bombay High Court has also held ... case of M/s. Nirved Traders Pvt. Ltd. Vs. DCIT (ITA. No.149 of 2017) that the disallowance u/s 14A of the Act is to be restricted to the extent of exempt income earned by assessee. In holding so, the Hon’ble Bombay High Court has followed the decisions 3 Arshiya Limited

DCIT (Ltu) 2, Mumbai vs. Asian Paints Ltd, Mumbai

Appeal is dismissed

ITA 840/MUM/2018[2014-15]Status: DisposedITAT Mumbai06 Mar 2024AY 2014-15

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10(34)Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

directly attributable to any 357,668 particular income or receipt. 3. Expenditure indirectly attributable 2,198,435 to the investment activity. Total Amount disallowable u/s 14A of the Act 2,556,103 9. We find that while deciding a similar issue in favour of the assessee, the coordinate bench ... investment-related activity, which has been computed as under: Employee Designation Chief Financial Officer Senior Manager- Finance Finance Executive Total Proportionate salary Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Percentage Cost to Value of Company disallowance

Asian Paints Ltd, Mumbai vs. Asst CIT (Ltu) 2, Mumbai

The appeal is dismissed holding that the learned CIT appeal is correct in allowing

ITA 269/MUM/2018[2014-15]Status: DisposedITAT Mumbai06 Mar 2024AY 2014-15

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10(34)Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

directly attributable to any particular income or receipt. 357,668 3. Expenditure indirectly attributable to the investment activity. 2,198,435 Total Amount disallowable u/s 14A of the Act 2,556,103 9. We find that while deciding a similar issue in favour of the assessee, the coordinate bench ... cost in respect of the time spent by its employees on carrying out the investment-related activity, which has been computed as under: Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Employee Designation Percentage Cost to Company Value of disallowance Chief Financial Officer Senior Manager- Finance Finance Executive

Cesc Ltd., Kolkata vs. DCIT, Cir-6(1), Kolkata

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

ITA 2168/KOL/2019[2007-08]Status: DisposedITAT Kolkata05 Mar 2024AY 2007-08

Bench: Shri Sanjay Garg & Shri Rajesh Kumari.T.A. No.2168/Kol/2019 Assessment Year: 2007-08 Cesc Ltd……………………………...........................…………………….……Appellant Cesc House, Chowringhee Square, W.B-700001. [Pan: Aabcc2903N] Vs. Dcit, Circle-6(1), Kolkata………..…..…….…..….........…........……...…..…..Respondent Appearances By: Shri J. P. Khaitan, Sr. Counsel & P. Jhunjhunwala, Advocate, Appeared On Behalf Of The Appellant. Shri S. Datta, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 29, 2024 Date Of Pronouncing The Order : March 05, 2024 Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 14.08.2019 Of The Commissioner Of Income Tax Appeals)-20, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Mentioned As Many As Nine Grounds Of Appeal. However, The Ld. Counsel For The Assessee Has Submitted That As Per The Instructions Of His Client, He Presses For Ground Nos.4, 5 & 6 Only, Which Are Relating To Disallowance U/S 14A Of The Act R.W.R. 8D Of The Income Tax Rules In Respect Of Disallowance Of Expenditure Incurred In Relation To Earning Of Tax Exempt Income I.E. For Proportional Disallowance Of Expenditure Incurred For Earning Of Tax Exempt Income Out Of Total Expenditure Claimed. 3. The Brief Facts Of The Case Are That The Assessing Officer During The Assessment Proceedings Noted That The Assessee Had Claimed Tax Exempt Dividend Income Of Rs.30,00,000/- But No Amount Was Offered For

Section 115JSection 14ASection 250

assessee has submitted that as per the instructions of his client, he presses for Ground Nos.4, 5 & 6 only, which are relating to disallowance u/s 14A of the Act r.w.r. 8D of the Income Tax Rules in respect of disallowance of expenditure incurred in relation to earning of tax exempt ... claimed tax exempt dividend income of Rs.30,00,000/- but no amount was offered for I.T.A. No.2168/Kol/2019 Assessment Year: 2007-08 CESC Ltd disallowance u/s 14A on account of expenditure incurred for earning of tax exempt income. He, therefore, computed the disallowance u/s 14A in accordance with the formula

DCIT (Ltu) 2, Mumbai vs. Asian Paints Ltd, Mumbai

Appeal is allowed

ITA 841/MUM/2018[2013-14]Status: DisposedITAT Mumbai05 Mar 2024AY 2013-14

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhailasian Paints Ltd. Asian Paints House 6A, Shanti Nagar, Santacruz (East) Mumbai 400 055 Pan – Aaaca3622K Appellant Asstt. Commissioner Of Income Tax Large Taxpayer Unit-2, Mumbai V/S

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10(34)Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

Asian Paints Ltd, Mumbai vs. Asst CIT (Ltu) 2, Mumbai

Appeal is allowed

ITA 268/MUM/2018[2013-14]Status: DisposedITAT Mumbai05 Mar 2024AY 2013-14

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhailasian Paints Ltd. Asian Paints House

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10(34)Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

particular income or receipt 5,25,265 3. Expenditure indirectly attributable to the investment activity 18,61,266 4. Total Amount disallowable u/s 14A of the Act 23,86,531 9. We find that while deciding a similar issue in favour of the assessee, the coordinate bench of the Tribunal ... cost in respect of the time spent by its employees on carrying out the investment-related activity, which has been computed as under: Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Employee Designation Percentage Cost to Company Value of disallowance Chief Financial Officer

Associated Soapstone Distributing Co Private Limited, Jaipur vs. Principal Commissioner of Income Tax -2, Jaipur

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

ITA 243/JPR/2023[2018-19]Status: DisposedITAT Jaipur04 Mar 2024AY 2018-19

For Appellant: Shri Rohan Sogani, CAFor Respondent: Shri Arvind Kumar, CIT-DR

Section 139(1)Section 143(2)Section 143(3)Section 14ASection 263Section 36(1)(ii)Section 37Section 43B

However, neither the company has offered any such disallowance suo moto nor the FAO has made any disallowance u/s 14A r.w. Rule 8D of the IT Rules. 2.2 As per note 25 to balance sheet, total interest expenses of Rs.9,64,52,690/- have been claimed of which ... gist of the reply is as under: (i) In regard para no.3.1 of show cause notice dated 15.02.2023 in respect of disallowance u/s 14A the assessee contented that to earn interest on tax free bonds, no expense has been incurred by the assessee during the year under consideration. The assessee

ACIT, Circle- 24(1), New Delhi vs. Span India Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6451/DEL/2017[2014-15]Status: DisposedITAT Delhi04 Mar 2024AY 2014-15

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: Sh. Pradeep Dinodia, CA &For Respondent: Ms. Deepti Chandola, Sr. DR

Section 14Section 14(2)Section 14ASection 14A(2)

case of U.K. Paints India Ltd. Vs. ACIT in ITA No. 7604/Del/2017, order dated 27.11.2020. The said order is reproduced as under: “Disallowance u/s 14A: 3. The main grievance of the assessee is that the ld. CIT (A) erred in holding that the AO had recorded satisfaction u/s 14A

Aczet Private Limited, Mumbai vs. DCIT Circle 4(1)(1), Mumbai

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

ITA 3706/MUM/2023[2015-2016]Status: DisposedITAT Mumbai01 Mar 2024AY 2015-2016

Section 143(3)Section 14A

scrutiny assessment completed u/s 143(3) of the Act on 19.12.2017, the Assessing Officer disallowed commission expenses amounting to Rs.6,50,000/-; disallowance u/s 14A amounting to Rs.1,65,560/- along with other additions in respect of late payment of PF, ESI etc. 3. On further appeal ... upheld the disallowance in respect of commission expenses and disallowance u/s 14A of the Act. 4. Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. 5. Before us, the Ld. Counsel for the assessee has filed a Paper Book containing pages

DCIT (Ltu) 2, Mumbai vs. Asian Paints Ltd, Mumbai

Appeal is partly allowed

ITA 5934/MUM/2017[2012-13]Status: DisposedITAT Mumbai01 Mar 2024AY 2012-13

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

cost in respect of the time spent by its employees on carrying out the investment-related activity, which has been computed as under: Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Employee Designation Percentage Cost to Company Value of disallowance Chief Financial Officer Senior Manager- Finance Finance Executive

Asian Paints Ltd, Mumbai vs. Asst CIT Ltu, Mumbai

Appeal is partly allowed

ITA 5363/MUM/2017[2012-13]Status: DisposedITAT Mumbai01 Mar 2024AY 2012-13

Bench: Us.

Section 10Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14A

cost in respect of the time spent by its employees on carrying out the investment-related activity, which has been computed as under: Disallowance u/s 14A of Income Tax Act (Estimated allocable expenses) Employee Designation Percentage Cost to Company Value of disallowance Chief Financial Officer Senior Manager- Finance Finance Executive

Gujarat Urja Vikas Nigam Ltd, Vadodara vs. The ACIT, Cirecle-1(1)(1), Vadodara

In the result, the appeal of the assessee is allowed for statistical purposes and the appeal filed by the Revenue is partly allowed for statistical purposes

ITA 318/AHD/2020[2016-17]Status: DisposedITAT Ahmedabad29 Feb 2024AY 2016-17

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri M. J. Shah, A.R. & Shri Jimi Patel , A.RFor Respondent: Shri Sudhendu Das, CIT DR

Section 143(3)Section 14ASection 234ASection 271(1)(c)

file of the Ld. AO to adjudicate de novo with the following observation: “4.1. Regarding grounds no. 1.0 to 1.2 namely disallowance u/s. 14A. Both the parties submitted that this issue is squarely covered in assessee’s own case by Co- ordinate Bench of this Tribunal ... raised the ground against the sustained addition of Rs.61.46 crores whereas Revenue has challenged the deletion of Rs.91 crores out of the disallowance u/s 14A of the Act. ITA Nos.318&414/Ahd/2020 Gujarat Urja Vikas Nigam Ltd. vs. ACIT/DCIT Asst.Year– 2016-17 10. In ITA No.1874/Ahd/2010 vide its order dated