Dismissing the appeal of the revenue the Court held that the assessee has not incurred any expenditure. The estimated expenditure in respect of administrative or financial cost at five per cent. of dividend income earned by the Assessing Officer in accordance with S. 14A of the Act could not be disallowed. Rule 8D cannot be applied to any assessment year prior to assessment year 2008 -09 ( AY. 2000-01)
CIT v. Syndicate Bank (2020)422 ITR 298 /186 DTR 200/ 313 CTR 76 / 270 Taxman 237(Karn)(HC)
S. 14A : Disallowance of expenditure – Exempt income – Notional expenditure on earning dividends cannot be disallowed when there is no expenditure is incurred – Rule 8D cannot be applied to any assessment year prior to assessment year 2008 -09 [ R.8D ]