The Tax Publishers2020 TaxPub(DT) 0697 (Karn-HC) : (2020) 422 ITR 0298 : (2020) 313 CTR 0076 : (2020) 270 TAXMAN 0237

INCOME TAX ACT, 1961

Section 14A

Supreme Court in case of CIT v. Essar Teleholdings Ltd (2018) 401 ITR 445 (SC) : 2018 TaxPub(DT) 0652 (SC) held that provisions of rule 8D of Income Tax Rules could not be applied retrospectively and said Rules were introduced and brought on the Statute Book with effect from 24-03-2008 and present assessment year involved in present Appeal was assessment year 2002-03, therefore appeal of Revenue was dismissed.

Disallowance under section 14A - Expenditure incurred against earning of exempted income - Applicability of rule 8D - Prospective or retrospective

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: The issue was no longer res-integra in view of decisions of Supreme Court in case of CIT v. Essar Teleholdings Ltd (2018) 401 ITR 445 (SC) : 2018 TaxPub(DT) 0652 (SC) wherein Supreme Court had laid down the provisions of rule 8D of Income Tax Rules could not be applied retrospectively. The said Rules were introduced and brought on the Statute Book with effect from 24-03-2008 and present assessment year involved in present Appeal was assessment year 2002-03. Therefore, appeal of Revenue was dismissed.

REFERRED : CIT v. Walfort Share & Stock Brokers P. Ltd. (2010) 326 ITR 1 (SC) : 2010 TaxPub(DT) 2087 (SC) Maxopp Investment Ltd. & Ors. v. CIT & Anr. (2018) 402 ITR 640 (SC) : 2018 TaxPub(DT) 1403 (SC) CIT v. Essar Teleholdings Ltd. (2018) 401 ITR 445 (SC) : 2018 TaxPub(DT) 0652 (SC) Godrej & Boyce Manufacturing Co. Ltd. v. Dy. CIT & Anr. (2017) 394 ITR 449 (SC) : 2017 TaxPub(DT) 0968 (SC)

FAVOUR : In assessee's favour

A.Y. :


INCOME TAX ACT, 1961

Section 115JA

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