COURT: |
|
CORAM: |
|
SECTION(S): |
|
GENRE: |
|
CATCH WORDS: |
|
COUNSEL: |
|
DATE: |
(Date of pronouncement) |
DATE: |
March 29, 2012 (Date of publication) |
AY: |
|
FILE: |
|
CITATION: |
|
|
S. 14A & Rule 8D Disallowance Cannot Exceed Total Expenditure
In AY 2008-09, the assessee earned tax-free dividend income. Its’ total expenditure as per the P&L A/c was Rs. 49 lakhs. The AO applied Rule 8D and made a disallowance u/s 14A of Rs. 2.37 crores which was reduced by the CIT (A) to Rs. 1.78 crores. Before the Tribunal, the assessee claimed that even assuming that the entire expenditure had been incurred to earn the dividend, the disallowance u/s 14A & Rule 8D could not exceed the expenditure incurred. HELD accepting the plea:
U/s 14A read with Rule 8D, disallowance can be made for the expenditure incurred for earning of exempt income. From the assessee’s P&L A/c, it is evident that the total expenditure incurred was Rs. 49 lakhs only which was claimed as a deduction. The disallowance u/s 14A & Rule 8D cannot exceed the expenditure actually claimed by the assessee. Accordingly, the action of the AO & CIT (A) in making disallowance in excess of total expenditure debited to P&L A/c is unjustified.
The same view has been taken in Search Enviro Ltd (ITAT Mumbai) (attached with file)
Related Posts:
- Boutique Hotels India (P) Ltd vs. ACIT (ITAT Delhi) It is not as if mistake of a legal advisor, however, gross and inexcusable, will entitle an assessee to condonation of delay in filing of appeal. The facts of the case are to be examined to ascertain if there had been negligence or gross want of skill, competence or knowledge…
- Bank Of India vs. ACIT (ITAT Mumbai) In the present case, our entire focus was on whether these foreign tax credits could be allowed even when such tax credits lead to a situation in which taxes paid abroad could be refunded in India, but that must not be construed to mean that, as a corollary to our…
- Bank of India vs. ACIT (ITAT Mumbai) The effect of Hon'ble Supreme Court's judgment in Kulandagan Chettiar (267 ITR 654) that income taxable in the source jurisdiction under the treaty provisions cannot be included in total income of the assessee is clearly overruled by the legislative developments. It is specifically legislated that the mere fact of taxability…
- Sanjay Duggal vs. ACIT (ITAT Delhi) In our considered and humble opinion, no procedure for grant of approval has been provided u/s.153D of the Act and the Income tax Rules, 1962. However, when legislature has enacted some provision to be exercised by a higher revenue authority enabling the AO to pass assessment or reassessment orders in…
- Aricent Technologies Holdings Ltd vs. ACIT (ITAT Delhi) In terms of section 205 of the Act, the assessee/deductee cannot be called upon to pay tax, to the extent to which tax had been deducted from the payments due. Consequently, it follows that credit for such tax deducted at source, which is deducted from the account of the deductee,…
- Suresh Kumar Agarwal vs. ACIT (ITAT Delhi) All these information could have been obtained by the assessing officer by issue of 133 (6) notice to the depository as well as to the stock exchange and the respective broker. However, despite having the basic information available with the assessing officer he has chosen to sit and become a…
Leave a Reply