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| The Tax Publishers2019 TaxPub(DT) 3735 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A Rule 8D
For making disallowance under section 14A read with rule 8D(iii) being administrative expenses, only those investments which actually yielded tax free income would be considered.
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Disallowance under section 14A - Expenditure against exempt income - Administrative expenses under rule 8D(iii) -
As per AO, rule 8D(2) was applicable and expenditure incurred relatable to earning of an exempt income was to be disallowed under section 14A. The AO invoked provisions of section 14A read with rule 8D(2) of the 1962 Rules and disallowance were made by the AO to the tune of Rs. 34,93,693, vide assessment order, dt. 5-3-2013 passed by the AO under section 143(3). CIT(A) upheld disallowance. Held: It was only those investments which actually yielded dividend income which can only be considered for making disallowance under section 14A read with rule 8D. The contention of the assessee that it had made investments in subsidiary companies/strategic investments and hence section 14A will not be applicable, lacks merit.
Followed:ACIT v. Vireet Investments (P) Ltd. ((2017) 165 ITD 27 (Del. SB-Trib.) : 2017 TaxPub(DT) 1760 (Del-Trib)), Assessee's own case for assessment year 2009-10 in ITA No. 1441/Mum/2013, Orders, dt. 16-12-2015, decision of Mumbai-tribunal in assessee's own case in ITA No. 520/Mum/2017 vide Orders, dt. 29-6-2018 for assessment year 2012-13, Allana Cold Storage (P) Ltd. v. Addl. CIT in ITA 2366 & 2367/Mum/2015 for assessment year 2011-12 and 2010-11 and Maxopp Investments Ltd. v. CIT (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC).
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2010-11
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