“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

Uniliver Industries P. Ltd, Mumbai vs. DCIT RG 1(3)(2), Mumbai

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

ITA 1755/MUM/2017[2012-13]Status: DisposedITAT Mumbai09 Jan 2024AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T (Tp) A. No.1755/Mum/2017 (निर्धारण वर्ा / Assessment Year: 2012-13) Unilever Industries Pvt. Ltd. बिधम/ Dcit, Range-1(3)(2) Unilever House, B. D. Mumbai. Vs. Sawant Marg, Chakala, Andheri (E), Mumbai- 400099. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacu0791P (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Nishant Thakkar/Ms Jasmin Amalsadwala Revenue By: Shri Manoj Kumar (Dr) सुनवाई की तारीख / Date Of Hearing: 21/12/2023 घोषणा की तारीख /Date Of Pronouncement: 09/01/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Company Against The Order Of The Assessing Officer (Ao) Dated 10.01.2017 Passed U/S 143(3) R.W.S 144C(13) Of The Income Tax Act, 1961 (Hereinafter “The Act”).

For Appellant: Shri Nishant Thakkar/Ms JasminFor Respondent: Shri Manoj Kumar (DR)

Section 143(3)Section 14A

stands dismissed. 6. Coming to ground nos. 7 to 12 which is against the action of the AO making disallowance u/s 14A of the Income Tax Act, 1961 (hereinafter “the Act”) read with Rule 8D of the Rules. 7. Brief facts are that the assessee ... Cheminvest Ltd. Vs. Commissioner of Income Tax (378 ITR 33) wherein it was held by Hon’ble Delhi High Court that the disallowance u/s 14A of the Act read with Rule 8D of the Rules would not be permissible when the assessee has not earned any income which was exempt

Indowind Energy Limited, Chennai vs. DCIT, Chennai

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

ITA 3453/CHNY/2018[2012-13]Status: DisposedITAT Chennai05 Jan 2024AY 2012-13

Bench: Shri Manjunatha. G & Shri Manomohan Dasआयकर अपील सं./Ita No.3453/Chny/2018 िनधा(रण वष( /Assessment Year: 2012-13 M/S. Indowind Energy Ltd., The Dy. Commissioner Of Kothari Building, 4Th Floor, Vs. Income Tax, No.14, Mahatma Gandhiroad, Corporate Circle-2(2), Nungambakkam, Chennai. Chennai – 600 034. [Pan: Aaaci-1806-M] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ* की ओर से/ Appellant By : Shri S. Sridhar, Advocate ,-थ* की ओर से /Respondent By : Shri P. Sajit Kumar, Jcit सुनवाई क" तारीख/Date Of Hearing : 13.12.2023 घोषणा क" तारीख /Date Of Pronouncement : 05.01.2024

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri P. Sajit Kumar, JCIT

Section 14ASection 40Section 9

Heard the representatives of both the parties and perused the materials on record. We adjudicate the appeals of the assessee as under: 5. Disallowance u/s 14A r.w.r. 8D- Rs. 7,46,393/-: The ld. AO during the assessment proceedings noticed that the assessee had shown

Atul Projects India Private Limited, Andheri(E), Mumbai vs. DCIT -9(1)(2), (Now Jurisdiction With Dc CC (2) (4), Mumbai

In the result, the ground no

ITA 3295/MUM/2023[2013-14]Status: DisposedITAT Mumbai05 Jan 2024AY 2013-14

Bench: Shri Aby T Varkey & Shri Amarjit Singhm/S Atul Projects India Vs. Dcit-9(1)(2) Private Limited, 5Th Floor, (Now Jurisdiction With Dc Cc(2)(4)) Room No. 802, 8 Th Floor, Trade Avenue Andheri Pratishtha Bhavan, Old East, Suren Road Chakala Cgo, Annexe, M.K. Road Mumbai – 400 093 Mumbai - 400020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aagca5921P Appellant .. Respondent Appellant By : Mahaveer Jain Respondent By : Harmesh Lal Date Of Hearing 01.01.2024 Date Of Pronouncement 05.01.2024

For Appellant: Mahaveer JainFor Respondent: Harmesh Lal

Section 115JSection 143(2)Section 143(3)Section 14ASection 80I

from tax. The assessing officer after applying provisions of Sec. 14A r.w.Rule 8D computed an amount of Rs.8,27,330/- and same was disallowed u/s 14A of the Act and was also added to the book profit of the assessee computed u/s 115JB of the Act. 13. The assessee filed ... assessee. 14. During the course of appellate proceedings before the ld. Counsel submitted that assessee has only earned exempt income of Rs.375/ therefore, disallowance u/s 14A could not exceed the amount of exempt income. He further submitted that no addition should also be made to the book profit

DCIT-6(1)(1), Mumbai vs. Aasan Corporate Solutions Pvt. Ltd., Mumbai

In the result, the appeal of the assessee is partly allowed and appeal of the revenue is dismissed

ITA 2710/MUM/2023[2017-18]Status: DisposedITAT Mumbai05 Jan 2024AY 2017-18

Bench: Shri Vikas Awasthy & Shri Amarjit Singhaasan Corporate Vs. Dcit, Circle 6(1)(1) Solutions Private Limited 563B, 5Th Floor, 4Th Floor, Piramal Tower Aayakar Bhavan, Annexe, Ganpatrao Kadam Maharishi Karve Road, Marg Lower, Parel Mumbai - 400020 Mumbai – 400013 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aajca7980P Appellant .. Respondent Dcit, Circle 6(1)(1) Vs. M/S Aasan Corporate Room No. 504, 5 Th Floor, Solutions Private Limited Araykar Bhavan 4Th Floor, Piramal Tower M.K. Road, Annexe, Ganpatrao Mumbai – 400 020 Kadam Marg Lower, Parel Mumbai – 400013 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aajca7980P Appellant .. Respondent Appellant By : Ronak Doshi A/W Priyank Gandhi Respondent By : Ajay Chandra Date Of Hearing 21.12.2023 Date Of Pronouncement 05.01.2024

For Appellant: Ronak doshi a/wFor Respondent: Ajay Chandra

Section 14ASection 23(1)(a)Section 40

principles of natural justice be held as bad in law and the additions/disallowances made be deleted WITHOUT PREJUDICE TO GROUND I GROUND II: DISALLOWANCE U/S, 14A OF THE ACT AMOUNTING TO RS.82,36,70,816/-: 1. On the facts and circumstances of the case ... amounting to Rs. 82,36,70,816/-in absence of any exempt income earned during the year. 2. The Appellant prays that the disallowance u/s 14A of the Act of Rs. 82,36,70,816/- be deleted. WITHOUT PREJUDICE TO GROUND I GROUND III: DISALLOWANCE AMOUNTING

Aasan Corporate Solutions Private Limited, Mumbai vs. DCIT Circle 6(1)(1), Mumbai

Appeal of the assessee is allowed for statistical purpose

ITA 1968/MUM/2023[2017-2018]Status: DisposedITAT Mumbai05 Jan 2024AY 2017-2018

Bench: Shri Vikas Awasthy & Shri Amarjit Singhaasan Corporate

For Appellant: Ronak doshi a/wFor Respondent: Ajay Chandra

Section 14ASection 23(1)(a)Section 40

M/S. Prime Property Development Corporation Ltd, Mumbai vs. ACIT C 10 (3) (2), Mumbai

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

ITA 3291/MUM/2023[2016-17]Status: DisposedITAT Mumbai03 Jan 2024AY 2016-17

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 115JSection 14Section 14A

under section 14A of the Act while computing total income under normal provisions of the Act and (b) addition of the amount of disallowance u/s 14A of the Act while computing book profit under section 115JB of the Act. 2. We heard the parties and perused the record. The fact ... that the assessee did not earn any exempt income during the year under consideration. Hence the assessee did not make any disallowance u/s 14A of the Act. The Assessing Officer noticed that the assessee has held investment in shares to the tune of Rs. 30.75 crores. Accordingly, he took

Lt Foods Ltd, New Delhi vs. Addi. CIT Special Range-5, New Delhi

In the result, the appeal of the assessee is allowed

ITA 140/DEL/2020[2016-17]Status: HeardITAT Delhi03 Jan 2024AY 2016-17

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

For Appellant: Sh. Rohit Jain, Adv. &For Respondent: Sh. Jeetender K. Kale, Sr. DR

Section 10Section 14A

Foods Ltd. assessee filed appeal before us. The facts are not in dispute. By this time, it is settled position that the disallowance u/s 14A of the Act cannot exceed exempt income claimed. Since, in the instant case, the exempt income claimed by the assessee was Rs.66

ACIT, Central Circle- 1, New Delhi vs. Sahara India Financial Corporation Ltd., Lucknow

ITA 7805/DEL/2019[2016-17]Status: DisposedITAT Delhi02 Jan 2024AY 2016-17

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Aditya Vohra, AdvFor Respondent: Shri Kanv Bali, Sr. DR

Section 35A

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘Aʼ BENCH, NEW DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI N.K

Reliance Power Limited, Mumbai vs. Deputy Commissioner of Income Tax Circle 15(3)(1), Mumbai

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

ITA 3042/MUM/2023[2012-13]Status: DisposedITAT Mumbai29 Dec 2023AY 2012-13

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra Sanghvi a/wFor Respondent: Smt. Somogyan Pal

Section 115JSection 14ASection 250

appeal, the assessee has raised the following grounds:– “COMPUTATION OF INCOME UNDER THE NORMAL PROVISIONS OF THE INCOME-TAX ACT, 1961 ("the Act"): DISALLOWANCE U/S. 14A OF THE ACT 1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals ... income was not received during the year, as against Rs. 52,54,151 suo-moto disallowed by the appellant, thereby making a net disallowance u/s 14A of Rs. 18,82,15,764 Your Appellant submits that the disallowance worked out by the Learned Assessing Officer is erroneous and incorrect

Reliance Power Limited, Mumbai vs. Deputy Commissioner of Income Tax .Circle 15(3)(1), Mumbai

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

ITA 3041/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Dec 2023AY 2011-12

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra Sanghvi a/wFor Respondent: Smt. Somogyan Pal

Section 115JSection 14ASection 250

Asst CIT (Ltu) 1, Mumbai vs. Grasim Industries Limited (As A Successor to Aditya Birla Nuvo Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1248/MUM/2017[2011-12]Status: DisposedITAT Mumbai28 Dec 2023AY 2011-12

Bench: Shri Vikas Awasthy, Jm & Ms Padmavathy S, Am

For Appellant: Shri Yogesh Thar, ARFor Respondent: Ms. A. Alankrutha, Sr. DR

Section 10BSection 115JSection 14ASection 234BSection 271(1)(c)Section 32(1)(iia)Section 37Section 40Section 43BSection 80I

assessee and the Revenue raised various grounds pertaining to the following issues as tabulated below: Assessee Ground No. Issues 1 Disallowance u/s 14A of the Act 2 Upholding the action of AO in adding the disallowance u/s 14A of the Act to book profits u/s 115JB ... Interest under section 234B, 234C & 234D. 10 Penalty proceedings u/s. 271(1)(c) Revenue Ground No. Issues 1 to 4 Disallowance u/s 14A of the Act 5 Disallowance u/s 40(a)9ia) on year end provisions 6 Deleting the addition on account of CENVAT Credit ignoring the fact that

Grasim Industries Limited (As A Successor to Aditya Birla Nuvo Ltd), Mumbai vs. Addl CIT Ltu, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1065/MUM/2017[2011-12]Status: DisposedITAT Mumbai28 Dec 2023AY 2011-12

Bench: Shri Vikas Awasthy, Jm & Ms Padmavathy S, Am

For Appellant: Shri Yogesh Thar, ARFor Respondent: Ms. A. Alankrutha, Sr. DR

Section 10BSection 115JSection 14ASection 234BSection 271(1)(c)Section 32(1)(iia)Section 37Section 40Section 43BSection 80I

Bestech India P.Ltd, New Delhi vs. DCIT, Central Circle-1, Faridabad

In the result, the appeals of the assessee in ITA Nos

ITA 2059/DEL/2022[2017-18]Status: DisposedITAT Delhi27 Dec 2023AY 2017-18

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri R.S. Ahuja, CAFor Respondent: Shri Kanv Bali, Sr. DR

Section 14ASection 32(1)

earned any exempt income. 6. Explanation of the assessee was dismissed by the Assessing Officer who was of the firm belief that disallowance u/s 14A r.w.r 8D is mandatory in light of CBDT Circular No. 5/2014 dated 11.02.2014. Accordingly, the Assessing Officer made addition ... Before us, the ld. counsel for the assessee vehemently stated that since no exempt income was earned, there was no question of any disallowance u/s 14A of the Act r.w.r 8D. 9. In so far as the claim of depreciation on good will is concerned

Bestech India P.Ltd, New Delhi vs. DCIT, Central Circle 1, Faridabad

In the result, the appeals of the assessee in ITA Nos

ITA 2058/DEL/2022[2016-17]Status: DisposedITAT Delhi27 Dec 2023AY 2016-17

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri R.S. Ahuja, CAFor Respondent: Shri Kanv Bali, Sr. DR

Section 14ASection 32(1)

Ansal Buildwell Limited, New Delhi vs. ACIT, Circle-2(2), New Delhi

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

ITA 1148/DEL/2023[2017-18]Status: DisposedITAT Delhi22 Dec 2023AY 2017-18

Bench: Sh. Saktijit Dey & Sh. N. K. Billaiyaassessment Year: 2017-18 Ansal Buildwell Limited Vs. Acit 118, Uff, Prakash, Deep Circle-2 (2) Building, 7, Tolstoy Marg, New Delhi Connaught Place, New Delhi-110001 Pan No.Aaaca2845E (Appellant) (Respondent) Appellant By Sh. Satyajeet Goel, Advocate Respondent By Sh. Kanv Bali, Sr. Dr Date Of Hearing: 20/12/2023 Date Of Pronouncement: 22/12/2023 Order

Section 10Section 14Section 14A

JCIT (2018) 95 taxman.com 41 (Kar.)]. In the case considered by the Hon'ble Madras High Court, the assessee therein had made voluntarily disallowance u/s 14A of the I.T.Act more than the dividend income earned and the Tribunal confirmed the disallowance made u/s 14A of the I.T.Act. However ... Madras High Court held that the disallowance u/s 14A of the I.T.Act cannot exceed the exempt income earned during the relevant assessment year. The relevant finding of the Hon'ble Madras High Court reads as follow:- "20. Before parting, we may also note with reference to the Table of disallowance

ACIT, Cir-2(1)(1), Mumbai vs. M/S. Bank of India, Mumbai

The appeal is dismissed and appeal of assessee is allowed

ITA 1228/MUM/2023[2011-12]Status: DisposedITAT Mumbai21 Dec 2023AY 2011-12

Bench: Shri Prashant Maharishi, Am & Shri Narender Kumar Choudhry, Jm M/S Bank Of India Acit, Circle 2(1)(1) Room No.575, 5Th Floor, C5 Block Star House, Bandra Kurla Complex, Aaykar Bhavan, Vs. M.K. Road, Bandra East, Mumbai-400 020 Mumbai-400 051 (Appellant) (Respondent) Pan No. Aaacb0472C M/S Bank Of India Acit, Circle 2(1)(1) C5 Block Star House, Room No.575, 5Th Floor, Bandra Kurla Complex, Aaykar Bhavan, Vs. Bandra East, M.K. Road, Mumbai-400 020 Mumbai-400 051 (Appellant) (Respondent) Assessee By : Mr . C Naresh Ca Revenue By : Shri Sanjay Deshmukh Cit Dr & Shri P D Chougule, Addl. Cit Date Of Hearing: 3/7/2023 & 08.12.2023 Date Of Pronouncement : 21.12.2023

For Appellant: Mr . C Naresh CAFor Respondent: Shri Sanjay Deshmukh CIT DR and Shri P D Chougule, Addl

Section 14Section 143(3)Section 14ASection 244ASection 254

relied upon the several decisions of the co-ordinate Bench which are not disputed. 014. The ld DR in rejoinder to disallowance u/s 14A of the Act submitted that if the view is taken that in case of a bank if investments are held to be stock in trade, then ... exempt income earned from that stock in trade does not invite disallowance u/s 14A of the Act is fallacious. He submits that law cannot be read in manner, which makes the ITA Nos. 1228 & 1094/Mum/2023 Bank of India; A.Y. 2011-12 section unworkable. He further submits that in case

Bank of India, Mumbai vs. DCIT-2(1)(1), Mumbai

The appeal is dismissed and appeal of assessee is allowed

ITA 1094/MUM/2023[2011-12]Status: DisposedITAT Mumbai21 Dec 2023AY 2011-12

For Appellant: Mr . C Naresh CAFor Respondent: Shri Sanjay Deshmukh CIT DR and Shri P D Chougule, Addl

Section 14Section 143(3)Section 14ASection 244ASection 254

ACIT, Circle-16(1), Delhi vs. News Nation Network Pvt. Ltd., Delhi

In the result, the appeal of the Revenue stands dismissed

ITA 1194/DEL/2022[2018-19]Status: DisposedITAT Delhi21 Dec 2023AY 2018-19

Bench: BEFORE, SHRI M. BALAGANESH (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

Section 133(6)Section 143(3)Section 68

duly considering the factum of making investment in preferential share in assessee company while adjudicating the issue of disallowance u/s 14A of the Act. Absolutely no adverse finding has been recorded by the AO of M/s Infotel Technologies Private Ltd. with regard to the fact of investment made in assessee

DCIT, Circle-12(1), New Delhi vs. Info Edge India Ltd., New Delhi

Appeal is allowed

ITA 5185/DEL/2019[2013-14]Status: DisposedITAT Delhi21 Dec 2023AY 2013-14

Bench: Shri Saktijit Dey, Hon’Ble & Dr. B. R. R. Kumar

For Appellant: Sh. S.K Aggarwal, CAFor Respondent: Sh. Amit Katoch, Sr. DR

Section 143(3)Section 14ASection 37

erred in deleting the addition of Rs. 65,99,444/- made by the AO on account of disallowance u/s 14A of the Income Tax Act, 1961 (the Act) read with the provisions of Rule 8D of the Income Tax Rules, 1962 ("the Rules). 3. ITA No. 5185/Del/2019 M/s Info Edge ... absence of any change in the factual matrix and legal preposition, we affirm the order of the Id. CIT(A) on this issue. Disallowance u/s 14A: 12. During the year under consideration, the assessee had following investments in mutual funds and made disallowance under section 14A as follows: Particulars Investment

DCIT, New Delhi vs. M/S. Alpha G. Corp. Development Ltd., New Delhi

In the result, the appeal of the Revenue being devoid of merit is dismissed

ITA 6049/DEL/2015[2008-09]Status: DisposedITAT Delhi21 Dec 2023AY 2008-09

Bench: Shri G.S. Pannu, Hon’Ble & Ms. Astha Chandraasstt. Year: 2008-09

For Appellant: Mr. Debesh Panda, AdvocateFor Respondent: S/Shri Sanjay Kumar &

Section 143(3)Section 147Section 148Section 14A

erred in law and on facts in directing the AO to exclude the investments in Subsidiary Companies for the purpose of calculating disallowance u/s 14A and allowing consequential relief thereof. 2. The Ld. CIT(A) has erred in law and on facts in directing the AO to exclude investments ... mutual funds which generate exempt income for the purpose of calculating disallowance u/s 14A holding it as temporary phenomena and allowing consequential relief thereof. 3. The Ld. CIT(A) has erred in placing reliance on the decision of the Hon’ble High Delhi Court in CIT Vs. Oriental Structural Engineering