INCOME TAX ACT, 1961

Section 14A Rule 8D

Disallowance under section 14A - Expenditure against exempt income - Whether the investments on which no exempt income was earned, would also be considered while computing disallowance under section 14A -

AO invoked the provisions of rule 8D and computed disallowance under section 14A. Assessee contended that while computing disallowance under rule 8D, AO had considered all investments, irrespective of the fact that whether the assessee had earned dividend income on the said investments or not. Held: While computing disallowance under section 14A only those investments should be taken into consideration on which the assessee has earned dividend income exempt from tax. But, as in the instant case, AO had considered all investments, therefore, the issue was restored back to AO for recalculation of disallowance under section 14A read with rule 8D after excluding those investments on which the assessee had not earned any exempt income.

Relied:Asstt. CIT v. Vireet Investment (P) Ltd. (2017) 165 ITD 27 (Del-SB) : 2017 TaxPub(DT) 1760 (Del-Trib)

REFERRED : M/s. Quick Heal Technologies Ltd. v. DCIT, in [ITA Nos. 1500 & 1710/PUN/2017 for assessment years 2012-13 and 2013-14 decided on 12-3-2019] : 2019 TaxPub(DT) 2688 (Pune-Trib)

FAVOUR : In assessee's favour by way of remand

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 35(2AB)

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