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| The Tax Publishers2019 TaxPub(DT) 0136 (Mum-Trib) INCOME TAX ACT, 1961
Section 14A
Where AO had made addition under section 14A without recording satisfaction having regard to expenditure incurred by assessee in relation to exempted income, assessee had rightly submitted that disallowance was also against the principle of consistency in the absence of any facts.
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Disallowance under section 14A— - Expenditure incurred against earning of exempted income— - Applicability of rule 8D. -
Assessee-company had made investment for the purpose of earning dividend income which was exempt and incurred expenditure in relation to earning of exempted income. AO disallowed the expenses incurred under section 14A by invoking rule 8D of Income Tax Rules, 1962.Held:AO did not even identify any specific item of expense and he merely says that explanation of assessee was not correct as huge investment was made. There was no satisfaction of AO in terms of section 14A read with rule 8D. Assessee had rightly submitted that disallowance was also against the principle of consistency in the absence of any facts.
FollowediGodrej & Boyce Manufacturing Company Ltd. v. Dy. CIT & Anr. (2017) 394 ITR 449 (SC) : 2017 TaxPub(DT) 0968 (SC), HDFC Bank Ltd. v. Dy. CIT & Ors. (2016) 67 taxmann.com 42 (Bom) : 2016 TaxPub(DT) 1316 (Bom-HC), Joint Investments (P) Ltd. v. CIT (2015) 59 taxmann.com 295 (Delhi) : 2015 TaxPub(DT) 1375 (Del-HC), CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom) : TaxPub(DT) 3351 (Bom-HC),and CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) : 2009 TaxPub(DT) 1275 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 143
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