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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

ACIT, Circle, Panipat vs. Paliwal Overseas Pvt. Ltd., Panipat

In the result, Revenue’s appeal being ITA No

ITA 2082/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Sept 2023AY 2010-11

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

that the investment in shares was made out of interest free funds. Rejecting the claim of the assessee the AO made the impugned disallowance u/s 14A of the Act for expenses relating to investment in shares as per the method prescribed in Rule 8D. Aggrieved against this the assessee preferred ... Therefore, in the light of decision of Co-ordinate Bench rendered in the case of DCM Ltd. Vs. DCIT ITA No. 4567/Del/2022, the disallowance u/s 14A cannot exceed the exempt income. This view has been approved by the Hon’ble Madras High Court and followed by other Hon’ble High

ACIT, Circle, Panipat vs. Paliwal Overseas P.Ltd, Panipat

In the result, Revenue’s appeal being ITA No

ITA 1263/DEL/2018[2013-14]Status: DisposedITAT Delhi27 Sept 2023AY 2013-14

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

that the investment in shares was made out of interest free funds. Rejecting the claim of the assessee the AO made the impugned disallowance u/s 14A of the Act for expenses relating to investment in shares as per the method prescribed in Rule 8D. Aggrieved against this the assessee preferred ... Therefore, in the light of decision of Co-ordinate Bench rendered in the case of DCM Ltd. Vs. DCIT ITA No. 4567/Del/2022, the disallowance u/s 14A cannot exceed the exempt income. This view has been approved by the Hon’ble Madras High Court and followed by other Hon’ble High

Paliwal Overseas Pvt. Ltd., Panipat vs. DCIT, Circle, Panipat

In the result, Revenue’s appeal being ITA No

ITA 5878/DEL/2017[2011-12]Status: DisposedITAT Delhi27 Sept 2023AY 2011-12

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

that the investment in shares was made out of interest free funds. Rejecting the claim of the assessee the AO made the impugned disallowance u/s 14A of the Act for expenses relating to investment in shares as per the method prescribed in Rule 8D. Aggrieved against this the assessee preferred ... Therefore, in the light of decision of Co-ordinate Bench rendered in the case of DCM Ltd. Vs. DCIT ITA No. 4567/Del/2022, the disallowance u/s 14A cannot exceed the exempt income. This view has been approved by the Hon’ble Madras High Court and followed by other Hon’ble High

DCIT (Ltu), New Delhi vs. M/S. the Oriental Insurance Co. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6281/DEL/2016[2012-13]Status: DisposedITAT Delhi26 Sept 2023AY 2012-13

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Trandeep Singh, AdvFor Respondent: Sh. H. K. Choudhary, CIT-DR
Section 10(38)Section 14ASection 44

absence of any change in the factual matrix and legal proposition, we decline to interfere with the order of the ld. CIT(A). Disallowance u/s 14A: 5. It is now well settled proposition that the income of the assessee is to be computed as per the provisions of Section

M/S the Oriental Insurance Co. Ltd., New Delhi vs. DCIT (Ltu), New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6134/DEL/2016[2012-13]Status: DisposedITAT Delhi26 Sept 2023AY 2012-13

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Trandeep Singh, AdvFor Respondent: Sh. H. K. Choudhary, CIT-DR
Section 10(38)Section 14ASection 44

absence of any change in the factual matrix and legal proposition, we decline to interfere with the order of the ld. CIT(A). Disallowance u/s 14A: 5. It is now well settled proposition that the income of the assessee is to be computed as per the provisions of Section

Morgan Credits Pvt Ltd, Mumbai vs. CIT (A)-54, Mumbai

In the result both the appeals filed by the assessee are treated as allowed for statistical purposes

ITA 1245/MUM/2023[2018-19]Status: DisposedITAT Mumbai20 Sept 2023AY 2018-19

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 14A

average value of investment was not accepted by the Assessing Officer. Accordingly, the AO increased the 2 Morgan Credits Pvt. Ltd. amount of disallowance u/s 14A of the Act that that voluntarily disallowed by the assessee. The appeals filed by the assessee before the learned CIT(A) for both

Morgan Credits Pvt Ltd, Mumbai vs. CIT (A)-54, Mumbai

In the result both the appeals filed by the assessee are treated as allowed for statistical purposes

ITA 1244/MUM/2023[2017-18]Status: DisposedITAT Mumbai20 Sept 2023AY 2017-18

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 14A

average value of investment was not accepted by the Assessing Officer. Accordingly, the AO increased the 2 Morgan Credits Pvt. Ltd. amount of disallowance u/s 14A of the Act that that voluntarily disallowed by the assessee. The appeals filed by the assessee before the learned CIT(A) for both

Aarti Sponge and Power Ltd., Raipur vs. Assistant Commissioner of Income Tax, -1(1), Raipur

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

ITA 70/RPR/2023[2013-14]Status: DisposedITAT Raipur20 Sept 2023AY 2013-14

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita No.70/Rpr/2023 िनधा"रण वष" /Assessment Year: 2013-14 V. Aarti Sponge & Power Ltd. Acit -1 (1) Aarti House, Ashoka Ratna Shankar Raipur Nagar, Raipur, Chhattisgarh – 492 001

For Respondent: Sr. D.R
Section 143(3)Section 14ASection 250

Documents and accounts were checked on test check basis, deliberations were made, finally assessment was culminated on 04/11/2015 with following additions: :: 3 :: i. Disallowance u/s 14A : 19,10,513/- ii. 5% Estimated Disallowance of Admn. Exp : 1,29,650/- iii. Disallowance Social Welfare Expenses : 2,00,000/- 4. With aforesaid ... issue, submissions/arguments of the assessee, rebuttal / argument by the department and our decision on the same, as follows: Ground No 1: Disallowance u/s 14A : Rs. 19,10,513/- 8. Pertaining to disallowance u/s 14A of the Act, Learned AR of the assessee come-up with multi-fold contentions. First, that

DCIT-3(2)(1), Mumbai vs. Millennium Appliances, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1389/MUM/2023[2016-2017]Status: DisposedITAT Mumbai15 Sept 2023AY 2016-2017

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – 3(2)(1) V. M/S. Millennium Appliances India Ltd., 17Th Floor, C Wing Mittal Court Room No. 608, 6Th Floor Nariman Point, Mumbai - 400021 Aayakar Bhavan, M.K. Road Mumbai - 400020 Pan: Aaccm7838D (Appellant) (Respondent)

Section 14A

expenses was incurred by the company except administrative expenses pertaining to investment activity of Rs. 5,20,670/- which was suo moto disallowed u/s 14A rwr8D of ITA in its computation of Income for AY 2016-17. Page No. | 2 M/s. Millennium Appliances India Ltd., In this regards we draw ... assessee, the Assessing Officer rejected the same and by relying on the CBDT Circular 5/2014 and decisions of various courts he calculated the disallowance u/s. 14A of the Act of ₹.6,57,73,036/- after adjusting the suomoto disallowance made by the assessee. He also made adjustment of disallowance u/s

Hira Infra-Tek Ltd., Raipur vs. Assistant Commissioner of Income Tax, Circle-1(1), Raipur

In the result, appeal of the assessee is partly allowed for statical purposes, in terms of our aforesaid observations

ITA 77/RPR/2023[2012-13]Status: DisposedITAT Raipur15 Sept 2023AY 2012-13

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita No.77/Rpr/2023 िनधा"रण वष" /Assessment Year: 2012-13 V. Hira Infra-Tek Limited Acit Hira Arcade Near New Bus Stand, Circle – 1(1) Pandri, Raipur Raipur

For Respondent: Shri Satya Prakash Sharma
Section 143(3)Section 14A

Demeurer Developers Pvt. Ltd. Therefore the investment made by the assessee during year were out of the non-interest bearing funds, therefor the disallowance u/s 14A r.w.r. 8D is uncalled for. This contention was further substantiated by showing the notes to financial statement placed at page 19 of the paper ... judgment Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) has held that if there is no exempt income, there cannot be any disallowance u/s 14A. Similar view has been taken by the Hon’ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-DelHC

Chowdry Associates, New Delhi vs. ACIT, Circle-6(1), New Delhi

The appeal is allowed and impugned addition is deleted

ITA 6526/DEL/2019[2014-15]Status: DisposedITAT Delhi14 Sept 2023AY 2014-15

Bench: Sh. N.K.Billaiya & Sh. Anubhav Sharmash. Chowdry Associates Vs. Acit, 4Th Floor, Punjabi Circle-6(1), Bhawan, 10, Rouse New Delhi Avenue, New Delhi Pan : Aaacc0387R (Appellant) (Respondent)

Section 143(3)Section 14A

assessee company filed return declaring loss which was selected for scrutiny and Ld. AO has made a disallowance u/s 14A r.w.r 8D observing that the assessee has made a disallowance and its computation under clause (iii) of the rule 8D which is for expenses other than direct expenses and interest ... interest, the amount has been shown at Nil. The Appellant has simply given a figure of Rs. 11,45,364/- against the column disallowance u/s 14A. Total disallowance @ 0.5% of average investments works out to Rs.59,93,500/-. Since 81% dividend was received from Dabur India Limited, the expenditure related

ACIT, Circle-2, Faridabad vs. Nhpc Ltd., Faridabad

Appeal of the assessee is allowed

ITA 5299/DEL/2019[2016-17]Status: DisposedITAT Delhi14 Sept 2023AY 2016-17

Bench: SHRI SHAMIM YAHYA (Accountant Member), MS. ASTHA CHANDRA (Judicial Member)

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Shri Sanjay Pandey, CIT DR
Section 115JSection 14ASection 80

have heard rival submissions and perused the materials available on record. The issue in the present ground is with respect to the disallowance u/s 14A. We find that identical issue arose for A.Y. 2012-13 and the Co-ordinate Bench of Tribunal held that AO was not justified in disallowing

Nhpc Ltd, Faridabad vs. ACIT, Circle-II, Faridabad

Appeal of the assessee is allowed

ITA 4915/DEL/2019[2016-17]Status: DisposedITAT Delhi14 Sept 2023AY 2016-17

Bench: SHRI SHAMIM YAHYA (Accountant Member), MS. ASTHA CHANDRA (Judicial Member)

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Shri Sanjay Pandey, CIT DR
Section 115JSection 14ASection 80

have heard rival submissions and perused the materials available on record. The issue in the present ground is with respect to the disallowance u/s 14A. We find that identical issue arose for A.Y. 2012-13 and the Co-ordinate Bench of Tribunal held that AO was not justified in disallowing

DCIT 5(3)(2), Mumbai vs. The Great Eastern Shipping Co.Ltd, Mumbai

In the result, appeal filed by the learned assessing officer is dismissed

ITA 3272/MUM/2015[2009-10]Status: DisposedITAT Mumbai13 Sept 2023AY 2009-10

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm The Great Eastern Shipping Co. The Dy. Commissioner Of Ltd. Income-Tax, Kalyaniwalla & Mistry Llp Range-5(3), Esplanade House, 2 Nd Floor, Vs. Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Fort, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaact1565C The Dy. Commissioner Of The Great Eastern Shipping Income-Tax, Co. Ltd. Range-5(3), Kalyaniwalla & Mistry Llp Vs. Esplanade House, 2 Nd Floor, Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Mumbai-400 020 Fort, Mumbai-400 001 (Appellant) (Respondent)

For Appellant: Shri Jitendra Jain, AdvocateFor Respondent: Shri Manoj Mishra, CIT DR
Section 115Section 143Section 143(3)Section 144CSection 14A

issue in all these grounds is when the income of assessee is taxed under the Tonnage tax Scheme whether there can be any disallowance u/s 14A of the Act despite assessee earning exempt income such as Dividend. We find that identical issue arose in case of varun Shipping Limited ... purpose of the said business has been allowed and consequently no addition to income so computed can be made by way of disallowance u/s 14A on account of expenditure incurred by the assessee in relation to earning of exempt dividend income. We, therefore, find merit in the contention

The Great Eastern Shipping Co. Ltd, Mumbai vs. DCIT RG 5(3), Mumbai

In the result, appeal filed by the learned assessing officer is dismissed

ITA 1656/MUM/2014[2009-10]Status: DisposedITAT Mumbai13 Sept 2023AY 2009-10

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm The Great Eastern Shipping Co. The Dy. Commissioner Of Ltd. Income-Tax, Kalyaniwalla & Mistry Llp Range-5(3), Esplanade House, 2 Nd Floor, Vs. Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Fort, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaact1565C The Dy. Commissioner Of The Great Eastern Shipping Income-Tax, Co. Ltd. Range-5(3), Kalyaniwalla & Mistry Llp Vs. Esplanade House, 2 Nd Floor, Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Mumbai-400 020 Fort, Mumbai-400 001 (Appellant) (Respondent)

For Appellant: Shri Jitendra Jain, AdvocateFor Respondent: Shri Manoj Mishra, CIT DR
Section 115Section 143Section 143(3)Section 144CSection 14A

issue in all these grounds is when the income of assessee is taxed under the Tonnage tax Scheme whether there can be any disallowance u/s 14A of the Act despite assessee earning exempt income such as Dividend. We find that identical issue arose in case of varun Shipping Limited ... purpose of the said business has been allowed and consequently no addition to income so computed can be made by way of disallowance u/s 14A on account of expenditure incurred by the assessee in relation to earning of exempt dividend income. We, therefore, find merit in the contention

DCIT-CC-27, New Delhi vs. Anshika Consultants Pvt Ltd., New Delhi

In the result, Appeal of the Revenue is partly allowed for

ITA 35/DEL/2022[2015-16]Status: DisposedITAT Delhi13 Sept 2023AY 2015-16

Bench: Or At The Time Of Hearing Of The Appeal.” Cross Objection

Section 115JSection 136(6)Section 143(3)Section 14ASection 68

facts and in the circumstances of the case the Ld. CIT(A) has erred in law and on facts on restrict the disallowance u/s 14A r.w.r 8D(2)(ii) & (iii) under normal provision of the Act and u/s115JB of the Act. 3. That the order ... vide order dated 27/10/2021, deleted the addition made u/section 68 of the Act at Rs.9,90,00,000/- and restricted the disallowance u/s 14A of the Act read with Rule 8D(2)(ii) & (iii) in normal provision of the Act and u/s 115JB

The ACIT, 5(1), Indore vs. M/S. Swastik Coal Corporation Pvt. Ltd., Indore

ITA 229/IND/2017[2012-13]Status: DisposedITAT Indore12 Sept 2023AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniacit 5(1) M/S Swastic Coal Corporation Indore Pvt. Ltd. 21/3 Swastik House, Ratlam Vs. Kothi, Indore (Appellant / Revenue) (Respondent/ Assessee) Pan:Aabcj3196N Revenue By Shri P.K. Mishra, Cit-Dr Respondent By Shri Vijay Bansal & Ms. Nisha Lahoti, Ars Date Of Hearing 08.08.2023 Date Of Pronouncement 12.09.2023

Section 14ASection 68

raised following grounds of appeal: “1.Whether on facts and circumstances of the case, the Ld. CIT(A) was justified in restricting the disallowance u/s 14A of I.T. Act from Rs. 40,37,121/- to Rs. 6,84,471/-. 2. Whether the Ld. CIT(A) was justified in calculating disallowance u/s ... calculate such disallowance under rule 8D. Page 1 of 19 M/s. Swastik Coal Corporation Pvt. Ltd. Page 2 of 19 3. Whether disallowance u/s 14A calculated as per Rule 8D, can further be apportioned in the ratio of exempt and taxable income to calculate disallowance u/s 14A. 4. Whether disallowance

Apm Industries Ltd, Bhiwadi, Alwar vs. Deputy Commissioner of Income Tax, Central Circle - 1, Alwar

In the result, appeal of the assessee is allowed

ITA 203/JPR/2023[2018-19]Status: DisposedITAT Jaipur12 Sept 2023AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 203/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2018-19 APM Industries Ltd. SP-147, Industrial Area Bhiwadi, Alwar cuke Vs. Deputy Commissioner of Income Tax Central Circle-01, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACCA 5114 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. S. L. Poddar jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (JCIT) a l

For Appellant: Sh. S. L. PoddarFor Respondent: Smt. Monisha Choudhary (JCIT) a
Section 142(1)Section 143(2)Section 143(3)Section 194ASection 263Section 40Section 40A(7)

details have been furnished as to how this amount was computed. In absence of computation of this expenditure the correct amount of disallowance u/s. 14A of the Act was required to be calculated in the manner as provided u/r 8D of the Income Tax Rules. She further noted that ... Rs.2,37,335/- has remained untaxed ; (iii) Sale of scrap of Rs.2,35,97,690/- have been understated by Rs.33,39,666/-. (iv) Disallowance u/s 14A on investments yielding exempt income has not been considered.A sum of Rs. 1,50,03,512/- required to be disallowed u/s 14A

Bmg Enterprises Ltd, New Delhi vs. ACIT, Circle 5(1), New Delhi

In the result, the appeal of the Assessee is allowed

ITA 51/DEL/2023[2017-18]Status: DisposedITAT Delhi11 Sept 2023AY 2017-18

Bench: Shri M. Balaganesh & Shri Anubhav Sharmabmg Enterprises Ltd, Vs. Acit, First Floor, Dcm Building, Circle-5(1), 16, Barakhamba Road, New Delhi New Delhi (Appellant) (Respondent) Pan: Aaacb4657R

For Appellant: Shri R. K. Kapoor, CAFor Respondent: Shri. Girish Kohli, Sr. DR
Section 10(35)Section 143Section 14ASection 250

assessee at (Rs. 20,54,811/-) against the returned income/(loss) at (Rs. 30.44.034/-) under normal provisions of the Act by making disallowances u/s 14A of the Act read with rule 8D of the Income Tax Rules amounting to Rs. 9,89,223/- on wholly unjust, illegal, erroneous and untenable ... Delhi)] to consider only investments that earn or generate exempt income and not the total investments of the appellans computing the disallowance u/s 14A of the Act; b. not limiting the disallowances u/s 14A to the total exempt income earned of Rs. 1,03,155/- (dividend u/s

Chhattisgarh Power & Coal Benefication Ltd., Raipur vs. Deputy Commissioner of Income Tax, Circle 1(1), Bilaspur

In the result appeal of the assessee is partly allowed in terms of our observations herein above

ITA 105/RPR/2023[2015-16]Status: DisposedITAT Raipur11 Sept 2023AY 2015-16

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.105/Rpr/2023 िनधा"रण वष" /Assessment Year: 2015-16

For Appellant: Shri G.S.Agrawal, CAFor Respondent: Shri Satya Prakash Shama, Sr
Section 143(3)Section 14ASection 250Section 37Section 40A(3)Section 56(2)(viib)

disallowance of Rs.2,16,848/-. 7. That under the facts and the law, the learned CIT (Appeals) further erred in confirming the disallowance u/s 14A at Rs.1,49,769/- which is unjustified and be deleted. 8. That under the facts and the law, the learned CIT (Appeals) further erred