The Tax Publishers2019 TaxPub(DT) 0389 (Mum-Trib)

INCOME TAX ACT, 1961

Section 14A Rule 8D

In view of smallness of the expenses claimed vis-a-vis scale of operations of assessee, no disallowance under section 14A read with rule 8D(2)(iii) was warranted.

Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D(2)(iii) - Quantum of expenses claimed vis-a-vis scale of operations of assessee

Assessee received tax free dividend income. AO invoked section 14A and worked out disallowance of Rs. 1,50,000 in terms of rule 8D(2)(iii).Held: As evident, assessee had effectively claimed deduction of expenses to the tune of Rs. 8,000 from its income, then, how disallowance under section 14A read with rule 8D(2)(iii) could be worked out at Rs. 1, 50, 000. Keeping in view smallness of the expenses claimed vis-a-vis scale of operations of assessee, no disallowance under section 14A read with rule 8D(2)(iii) was warranted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11


INCOME TAX ACT, 1961

Section 36(1)(iii)

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