“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, Central Circle-30, New Delhi vs. Krishak Bharati Cooperative Ltd., Delhi

In the result, assessee’s appeals for A

ITA 1042/DEL/2023[2017-18]Status: DisposedITAT Delhi12 Feb 2024AY 2017-18

Bench: Shri Narendra Kumar Billaiya & Shri Kul Bharata.Y. 2017-18 & A.Y. 2018-19

Section 143(3)Section 14A

scrutiny and the assessments u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) were completed by making disallowance u/s 14A of the Act; and disallowance on account of amortization of lease rentals. Aggrieved against this the assessee preferred appeals before the learned ... excepting difference in quantum. Admittedly, facts are also identical. 10. Ground nos. 1 & 2 in both the assessment years relate to deletion of disallowance u/s 14A read with rule 8D. 11. Learned counsel for the assessee submitted that admittedly for the assessment years under consideration the assessee has not earned

DCIT, Circle-6(1), Kolkata vs. M/S. Ifb Agro Industries Ltd., Kolkata

In the result, both the appeals filed by the revenue in ITA No

ITA 491/KOL/2019[2014-15]Status: DisposedITAT Kolkata09 Feb 2024AY 2014-15

Bench: Dr. Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 14ASection 250Section 80ISection 92C

incurred. In view of above, Rule 8D of the IT Rules have been applied for computation of disallowance. 4.3. The calculation of disallowance u/s 14A : a) Rule 8D(2)(i) Direct expenses : Nil b) Rule 8D(2)(ii) : Nil c) Rule 8D(2)(iii): 0.5% of average investments ... lakhs equals to Rs 1,48,085/- Avg Investments- Rs 296.171akhs+ Rs296.17 lakhs = Rs 296.17 lakhs Hence total disallowance u/s 14A is of Rs 1,48,085/- is added back to the total income of the assessee.” 11. The Ld. Sr. Advocate, Mr. Khaitan further argued and placed that

DCIT, Circle-6(1), Kolkata vs. M/S. Ifb Agro Industries Ltd., Kolkata

In the result, both the appeals filed by the revenue in ITA No

ITA 490/KOL/2019[2013-14]Status: DisposedITAT Kolkata09 Feb 2024AY 2013-14

Bench: Dr. Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 14ASection 250Section 80ISection 92C

Dalmia (Bros) Pvt. Ltd., New Delhi vs. ITO, Ward-7(2), New Delhi

In the result, the Appeal filed by the assessee is dismissed

ITA 380/DEL/2019[2014-15]Status: DisposedITAT Delhi09 Feb 2024AY 2014-15

Bench: Her As Additional Ground Of Appeal Reading As Under :-

Section 143(3)Section 14ASection 154

Trust at Rs. 6,20,026/-, club expenses at Rs. 3,00,162/- , vehicle running expenses at Rs. 3,45,620/- and disallowance u/s 14A at Rs. 5,910/-. Total income assessed at Rs. 12,71,718/-. As against the assessment order, the assessee preferred an appeal before ... During the course of appellate proceedings, appellant has filed written submission which is reproduced as under:- 7. Ground No.5 appellant objects to disallowance u/s 14A of the Income Tax Act, 1961 amounting to Rs.5,910/-. Assessing Officer disallowed the aforesaid expenditure vide para 7 of the assessment order. Before making

ITO, Ward-5(1), Kolkata vs. M/S Express Tradelink Pvt. Ltd, Kolkata

ITA 43/KOL/2021[2009-10]Status: DisposedITAT Kolkata08 Feb 2024AY 2009-10

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 43/Kol/2021 Assessment Year: 2009-10 Income Tax Officer, Ward -5(1), M/S. Express Tradelink Pvt. Ltd. Kolkata Vs 64, Bentinck Street 3Rd Floor Kolkata - 700001 [Pan: Aacce0887C] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Somnath Ghosh, Advocate & Shri Asim Panda, A/R Revenue By : Shri Abhijit Kundu, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 28/11/2023 घोषणा क" तारीख /Date Of Pronouncement: 08/02/2024 आदेश/O R D E R Per Dr. Manish Borad: The Above Captioned Appeal Is Directed At The Instance Of The Revenue Against The Order Of The Commissioner Of Income Tax (Appeals), Kolkata – 7, (Hereinafter The “Ld. Cit(A)”) Dt. 23/09/2023, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2009-10. 2. The Registry Has Pointed Out That There Is A Delay Of 36 Days In Filing The Present Appeal By The Revenue. Petition For Condonation Of Delay Is Placed On Record Explaining The Reasons. On Perusing The Same, We Are Convinced That The Revenue Was Prevented By Sufficient Cause From Filing This Appeal In Time. Accordingly, We Condone The Delay & Proceed To Admit The Appeal For Hearing. 3. The Revenue Has Raised The Following Grounds Of Appeal:-

For Appellant: Shri Somnath Ghosh, Advocate and ShriFor Respondent: Shri Abhijit Kundu, CIT, D/R

Section 250Section 68

said sum u/s 68 of the Act. The Assessing Officer made further addition of Rs.42,450/- on account of undisclosed income and disallowance u/s 14A of the Act of Rs.20,434/-. The assessment was completed u/s 144/263/143(3)/147 of the Act vide order dt. 02/03/2015, assessing the total income

Bharat Electronics Limited, Bangalore vs. Assistant Commissioner of Income Tax, Large Payers Tax Unit, Circle-1, Bangalore

ITA 1067/BANG/2023[2018-19]Status: DisposedITAT Bangalore08 Feb 2024AY 2018-19

Bench: Shri George K. George & Shri Chandra Poojari

Section 10(34)Section 143(2)Section 14ASection 250Section 35Section 37

Nos.1, 2, 14 & 15 are general in nature, which do not require any adjudication. 3. Ground Nos.3 to 10 are with regard to disallowance u/s 14A r.w. Rule 8D of the I.T. Rules. 4. Facts of the case are that the Assessee made investments with two Subsidiaries BEL Optronic Devices

ACIT Circle-26(2), New Delhi vs. Vihaan Networks Pvt Ltd, New Delhi

In the result, appeal of the Revenue is dismissed and Cross Objection of the assessee is allowed

ITA 4064/DEL/2019[2011-12]Status: DisposedITAT Delhi08 Feb 2024AY 2011-12

Bench: Shri M Balaganesh & Ms. Astha Chandraasstt. Year: 2011-12 Acit,Circle-26(2) Vs. Vihaan Networks Pvt. Ltd. New Delhi. A-60, Naraina Industrial Area, Phase-01, New Delhi – 110 028 Pan Aaccr2460C (Appellant) (Respondent)

For Appellant: Shri Ritesh Bajaj, AdvocateFor Respondent: Ms Harpreet Kaur, Sr. DR

Section 143(1)Section 143(3)Section 14ASection 43B

earlier assessment years making the order perverse. iii. On the facts and circumstances of the case the Ld. CIT(A) erred in deleting disallowance u/s 14A amounting to Rs. 58.84,990/- on the ground that no exempt income has been claimed by the assessee relying on various judgements ... Jalandhar. ITA No. 218(Asr) 2017 wherein it has held after considering the above judgements of the Hon'ble Delhi High Court that disallowance u/s 14A can be made even when there is no exempt income. iv. On the facts and circumstances of the case the Ld. CIT(A) erred

Teamlease Digital Pvt Ltd., South Bangalore vs. National E-Assessment Center, Delhi

In the result, appeal filed by the assessee is allowed

ITA 2101/MUM/2023[2018-19]Status: DisposedITAT Mumbai07 Feb 2024AY 2018-19

Bench: Shri B.R. Baskaran (Am) & Shri Aby T. Varkey (Jm)

Section 14A

shall be made when the assessee has not received any exempt dividend income. Hence, in the facts of the present case, no disallowance u/s 14A is called for. Accordingly we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to delete the disallowance under

DCIT, New Delhi vs. Carissa Investment Pvt. Ltd., Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1648/DEL/2021[2013-14]Status: DisposedITAT Delhi07 Feb 2024AY 2013-14

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Mayank Patwari, CAFor Respondent: Ms. Sapna Bhatia, CIT-DR

Section 14A

written off ignoring the fact that the amount written off is non- business, prior period and capital expenditure.” 2 Carissa Investment Pvt. Ltd. Disallowance u/s 14A: 3. During the assessment proceedings, the Assessing Officer has worked out the disallowance u/s 14A of the Income Tax Act, 1961 in the following

ACIT, Special Range-7, New Delhi vs. Punjab and Sind Bank, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 8688/DEL/2019[2016-17]Status: DisposedITAT Delhi07 Feb 2024AY 2016-17

Bench: Shri Saktijit Dey & Shri M. Balaganeshacit, Vs. Punjab & Sind Bank, Special Range-7, Accounts & Audit New Delhi Department, Bank House 1St Floor, 21, Rajendra Place, New Delhi (Appellant) (Respondent) Pan: Aaacp1206G Assessee By : Shri Vivek Gupta, Adv Revenue By: Ms. Sarita Kumari, Cit Dr Date Of Hearing 14/11/2023 Date Of Pronouncement 07/02/2024

For Appellant: Shri Vivek Gupta, AdvFor Respondent: Ms. Sarita Kumari, CIT DR

Section 143(3)

relevant portion of the order of this Tribunal is reproduced hereunder:- “18. Ground No.3 & 5 are interconnected and with respect to the disallowance u/s 14A of the Act. 19. During the course of assessment proceedings, AO noticed that assessee had earned exempt income amounting to Rs.6 ... applicable to the assessee. AO therefore asked the assessee to explain as to why expenses attributable to exempt income may not be disallowed u/s 14A of the Act. On the query of the Punjab and Sind Bank AO, assessee made the detailed submissions which are reproduced

Deputy Commissioner of Income Tax, Corporate Circle -5(1), Chennai vs. H.Noor Mohammed, Chennai

In the result, the appeal filed by the Revenue is partly-allowed

ITA 2324/CHNY/2017[2008-09]Status: DisposedITAT Chennai06 Feb 2024AY 2008-09

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri R. Clement Ramesh Kumar, CITFor Respondent: None

Section 143(3)Section 14A

have carefully considered the submission of the appellant in support of the grounds and I have gone through the facts and records. The disallowance u/s 14A arises in respect of his business income in proprietary concern M/s. Olympia Papers & Stationery Stores. From the proprietary concern it is seen that ... Based on the workings submitted before me in the written submission and on facts and circumstances, I direct the AO to restrict the disallowance u/s 14A Rule 8D Rs.62,193/-. The Appellant gets relief of Rs.8,53,373/-. The grounds taken on this issue are partly allowed. Aggrieved, Revenue

Soyuz Trading Co. Ltd., Kolkata vs. DCIT, Cir-7(1), Kolkata.

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

ITA 1130/KOL/2023[2012-13]Status: DisposedITAT Kolkata05 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.1130/Kol/2023 Assessment Year : 2012-13 Soyuz Trading Co. Ltd (Now Merged With Concenate Advest Advisory (P) Ltd).…………....Appellant C/O Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata – 700069. [Pan: Aagcs3371K] Vs. Dcit, Circle-7(1), Kolkata……..........................................…..…..... Respondent Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Appellant. Shri S. Datta, Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 01, 2024 Date Of Pronouncing The Order : February 05, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 22.09.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As The ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. For That The Ld. Cit(A) Was Not Justified In Confirming The Disallowance Of Rs.68,65,91 7/- Made By The A.O. By Invoking The Provisions Of Sec. 14A R.W. Rule 8D Which Is Over & Above The Suo-Moto Disallowance Of Rs.9,39,667/- Made By The Assessee Itself.

Section 14ASection 250

that the Ld. CIT(A) ought to have considered that Amendment brought in by the Finance Act, 2022 in relation to disallowance u/s. 14A r.w. Rule 8D is applicable prospectively w.e.f. AY 2022-23. 4. Without prejudice to the above grounds, the Ld. CIT(A) ought to have considered that ... disallowance u/s. 14A r.w. Rule 8D should not exceed the administrative expenditures debited in the Profit & Loss Account. 5. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” 3. At the time of hearing, the ld. Counsel for the assessee

Yes Bank Ltd., Mumbai vs. DCIT(2)(2)(2), Mumbai

ITA 4278/MUM/2019[2015-16]Status: DisposedITAT Mumbai05 Feb 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

Section 14ASection 251Section 35DSection 8D(2)

upholding the disallowance under Rule 8D(2)(iii) of the Rules. 2. The Appellant prays that the AO be deleted to the disallowance u/s. 14A r.w.r. 8D(2)(iii). GROUND NO. II: SETTING ASIDE THE ISSUE TO THE FILE OF THE AO: 1. On the facts and circumstances ... satisfaction for rejecting the suo-moto disallowance computed by the Appellant. 3. The Appellant prays that the AO be directed to delete the disallowance u/s. 14A r.w.r. 8D. WITHOUT PREJUDICE TO GROUNDS I & III: GROUND NO. IV: NO DISALLOWANCE UNDER SECTION 14A OF THE ACT CAN BE MADE WHEN SECURITIES

ACIT - 2(2)(2), Mumbai vs. Yes Bank Limited, Mumbai

ITA 3017/MUM/2019[2015-16]Status: DisposedITAT Mumbai05 Feb 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Acit-2(2)(2), Room No. 545, 5Th Floor, Aayakar Bhavan, Mumbai-400020. Appellant Yes Bank Ltd., 15Th Floor, Yes Bank Tower, Ifc 2, Senapati Bapat Marg, Elphistone (West), Mumbai-400013. Pan No. Aaacy 2068 D Appellant Assessee By Revenue By Date Of Hearing Date Of Pronouncement

Section 14ASection 251Section 35DSection 8D(2)

Yokogawa India Limited, Bangalore vs. Deputy Commissioner of Income Tax Large Taxpayers Unit, Bangalore

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

ITA 2088/BANG/2017[2013-14]Status: DisposedITAT Bangalore01 Feb 2024AY 2013-14

Bench: Shri George George K. & Shri Laxmi Prasad Sahu

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 14A

decision of this Tribunal, we allow grounds No.6 to 12 raised by the assessee. 48. Ground Nos.13 to 17 are with regard to disallowance u/s. 14A of the Act of Rs.22,91,614 made by the AO. The assessee had restricted expenditure to Rs.1,90,462. The AO computed ... Section 14A of the Act and the same will put this issue at rest. Accordingly, we direct the A.O. to restrict the disallowance u/s 14A of the Act to 10% of exempt dividend income. He may work out the addition accordingly.” 52. Respectfully following the above decision in assessee

M/S Glenmark Pharmaceuticals Ltd., Mumbai vs. DCIT (Ltu)-1, Mumbai

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

ITA 575/MUM/2020[2014-15]Status: DisposedITAT Mumbai01 Feb 2024AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Rahul Chaudhary (Jm)

Section 144ASection 32ASection 35Section 37(1)Section 80I

same amount for adding u/s 115JB of the Act. 5.1 Before Ld CIT(A), the assessee took an additional ground contending that the disallowance u/s 14A should not exceed exempt income. In this regard, the assessee placed its reliance on the decision rendered by Hon’ble Delhi High Court ... followed the decision rendered by Hon’ble Delhi High Court and also by the co-ordinate bench in holding that the disallowance u/s 14A cannot exceed the exempt income. We notice that the Hon’ble Madras High Court has also expressed the very same view in the case of Principal

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

Accordingly the claim of expenditure is allowed as revenue

ITA 1646/AHD/2017[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Dr. Darsi Suman Ratnam, CI

amount approved by DSIR in Form 3CL 5. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance u/s 14A of Rs 5,53,94,595/- without properly appreciating the facts of the case and the material brought on record. 6. The Ld.CIT(A) has erred

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

Accordingly the claim of expenditure is allowed as revenue

ITA 1645/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2010-11

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Dr. Darsi Suman Ratnam, CI

The Assistant Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad vs. Intas Pharmaceuticals Pvt. Ltd., Ahmedabad

Accordingly the claim of expenditure is allowed as revenue

ITA 1644/AHD/2017[2009-10]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2009-10

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Dr. Darsi Suman Ratnam, CI

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

Accordingly the claim of expenditure is allowed as revenue

ITA 1336/AHD/2017[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Dr. Darsi Suman Ratnam, CI