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| The Tax Publishers2019 TaxPub(DT) 2075 (Ahd-Trib) : (2019) 176 ITD 0783 INCOME TAX ACT, 1961
Section 14A
Disallowance of expenditure in terms of section 14A read with Rule 8D could not exceed the exempt income itself. Accordingly, AO was directed to restrict disallowance under section 14A to the extent of exempt income.
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Disallowance under section 14A - Expenditure against exempt income - Invocation of rule 8D - Disallowance in excess of exempt income
Assessee earned tax free dividend income amounting to Rs. 4,000 but claimed no disallowance under section 14A. AO invoked rule 8D and worked out disallowance of Rs. 5 lakhs. Held: Disallowance of expenditure in terms of section 14A read with Rule 8D could not exceed the exempt income itself. Accordingly, AO was directed to restrict disallowance under section 14A to the extent of exempt income.
Followed:CIT v. Corrtech Energy Pvt. Ltd. (2014) 372 ITR 97 (Guj) : 2014 TaxPub(DT) 2072 (Guj-HC), Dy. CIT v. TGB Banquets Hotels Ltd. Tax Appeal No. 470 of 2012 dated 21-6-2016 (Guj), Jt. Investment Pvt. Ltd. v. CIT (2015) 372 ITR 694 (Del) : 2015 TaxPub(DT) 1375 (Del-HC) and CIT v. Vision Finstock Ltd. [T.A. No. 486 of 2017 Judgment, dated 31-7-2017 : 2018 TaxPub(DT) 4820 (Guj-HC)].
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2008-09
INCOME TAX ACT, 1961
Section 115JB Section 14A
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