This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, www.itatonline.org and other journals
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S. 14A : Disallowance of expenditure – Exempt income –PSU bonds of NTPC – Disallowance was restricted to 1 percent of exempt income [ R.8D ]

DCIT v. Growmore Leasing & Investment Ltd. (2018) 168 ITD 1 (Mum) (Trib.)

S. 14A : Disallowance of expenditure – Exempt income -No disallowance can be made for securities held as stock in trade- Interest free funds available with assessee , no disallowance can be made [ R.8D, 36(1)(iii) ]

Siddhesh Capital Market Services P. Ltd. v. (2018) 61 ITR 400 //53 CCH 427(Mum) (Trib)

S. 14A : Disallowance of expenditure – Exempt income – When there is no exempt income during the relevant year no disallowance can be made .[ R.8D ]

ACIT v. Progressive Constructions Ltd ( 2018) 161 DTR 289 /63 ITR 516/ 191 TTJ 549( SB) ( Hyd) (Trib)

S. 14A : Disallowance of expenditure – Exempt income – When there is no exempt income earned during the relevant period , no disallowance can be made [ R.8D ]

Moonrock Hospitality P. Ltd. v. DCIT ( 2018) 61 ITR 667 (Delhi) (Trib)

S. 14A : Disallowance of expenditure – Exempt income – AO cannot straight way make disallowance without rejecting the disallowance computed by the assessee [ R.8D ]

DCIT v. Vantage Advertising P. LTD. (2018) 61 ITR 564 (Kolk) (Trib)

S. 14A : Disallowance of expenditure – Exempt income –Satisfaction to be recorded by the Assessing Officer ,it cannot be substituted by recorded satisfaction of Commissioner of Income tax ( Appeals) [ S. 251, R.8D ]

Arnav Gruh Ltd. v. DCIT (2018) 168 ITD 518 (Mum) (Trib.)

S. 14A : Disallowance of expenditure – Exempt income –Rule 8D cannot be held to be applicable retrospectively and cannot be applicable to pending assessments [ R.8D ]

CIT v. Essar Teleholdings Ltd ( 2018) 401 ITR 445 / 162 DTR 225/ 300 CTR 561 / 253 Taxman 321 (SC) Editorial: CIT v. Firestone International P. LTD. ( 2015) 378 TR 558 ( Bom) (HC ) and CIT v. Essar Teleholdings Ltd ( Bom) (HC) is affirmed

S. 14A : Disallowance of expenditure – Exempt income – Stock in trade – Controlling interest – Principle of apportionment-Only that expenditure which is “in relation to” earning dividends can be disallowed- AO has to record proper satisfaction on why the claim of the assessee as to the quantum of suo moto disallowance is not correct . [ R.8D ]

Maxopp Investment Ltd. v. CIT ( 2018) 402 ITR 640/ 164 DTR 1 /254 Taxman 325 (SC) PCIT v. State Bank of Patiala ( 2018) 402 ITR 640/ 164 DTR 1/254 Taxman 325 (SC) Editorial: Maxopp Investment Ltd v CIT ( 2012) 347 ITR 272 ( Delhi) (HC) is affirmed , Decision of special Bench in ITO v. Daga Capital Management ( 2009) 312 ITR (AT) 1 ( Mum) (SB) is referred

S. 13 : Denial of exemption-Trust or institution-Investment restrictions -High rate of profit margin- Hefty salary to related trustees, scholarship in foreign currency , use of luxury cars without maintaining the log book , denial of exemption was held to be justified – Donation to another trust was held to be application of income [ S. (2(15) , 11, 12, 13 ]

IIM Foundation v.ADIT (E) (2018) 61 ITR 186 (Delhi) (Trib)

S. 12AA : Procedure for registration –Trust or institution-Application of income – Funds were diverted to non charitable purposes hence cancellation of registration was held to be valid [ S.11, 12A ]

Winsome Foundation v. CIT (2018) 168 ITD 575/ 192 TTJ 756/ 164 DTR 241 (Chd) (Trib.)