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The Tax PublishersITA No. 1759/Kol/2018
2019 TaxPub(DT) 4085 (Kol-Trib)INCOME TAX ACT, 1961
Section 14A
Where the interest free funds were sufficient to meet the investments, no disallowance would be made under rule 8D(2)(ii) and the investments which had not yielded any exempt dividend income would be excluded while working out the average value of investments for the purpose of applying rule 8D(2)(iii).
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Disallowance under section 14A - Expenditure against exempt income - Disallowance of interest expenses -
Issue arose for consideration as to whether CIT(A) erred in confirming the disallowance made by AO under section 14A read with rule 8D. Held: In the instant case AO was directed to examine the assessee's own funds and reserves and if AO finds that the interest free funds were sufficient to meet the investments, no disallowance would be made under rule 8D(2)(ii). Further, AO was also directed to exclude investments which had not yielded any exempt dividend income while working out the average value of investments for the purpose of applying rule 8D(2)(iii).
Relied:Pr. CIT v. Rasoi Ltd. [ITAT No. 109 of 2016 in GA No. 633 of 2016 Judgment, dated 15-2-2017] : 2018 TaxPub(DT) 5953 (Cal-HC),CIT v. HDFC Bank Ltd. (2014) 49 taxmann.com 335 (Bom) : 2014 TaxPub(DT) 3351 (Bom-HC),CIT v. M/s. R.E.I. Agro Ltd. [G.A. No. 3022 of 2013 Judgment, dated 23-12-2013] : 2014 TaxPub(DT) 0836 (Cal-HC),CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC),Dy. CIT v. REI Agro Ltd. [ITA No. 1811/Kol/2012, dated 14-5-2013] : 2014 TaxPub(DT) 0999 (Kol-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 68
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